WASHINGTON — The Federal Housing Finance Agency is revising the multifamily loan purchase caps for the mortgage giants Fannie Mae and Freddie Mac.
The new caps for the next five quarters will be $100 billion for each government-sponsored enterprise. At least 37.5% of the GSEs’ multifamily businesses must go toward affordable housing once the new caps take effect, the agency said.
The $100 billion cap is a significant change from previous years. Currently the caps are set at $35 billion for each GSE, but include a number of exclusions. The new cap will be an overall cap. Under the new policy, for example, green loans that finance energy and water efficiency improvements will no longer be excluded.
“Multifamily housing is a critical component of addressing our nation’s shortage of affordable housing,” FHFA Director Mark Calabria said in a press release. “These new multifamily caps eliminate loopholes, provide ample support for the market without crowding out private capital, and significantly increase affordable housing support over previous levels.”
The FHFA placed a cap on Fannie and Freddie’s multifamily businesses in 2014 to ensure liquidity in the market while allowing for more private capital.
However, the new caps will help the GSEs play more of a countercyclical role in the market, the agency said.
