Fannie Mae and Freddie Mac have announced that their multifamily loan purchase caps for 2024 have each been set at $70 billion, down from $75 billion each in 2023.
The caps, which have been set annually since 2015, are based on projections by the Federal Housing Finance Agency (FHFA) about the growth of multifamily originations next year. The FHFA has said that it anticipates that the combined $140 billion “will be appropriate given current market forecasts,” adding that it will still monitor the multifamily market and raise the caps if deemed necessary.
“We know the multifamily market faces significant headwinds, which makes Freddie Mac’s countercyclical role critically important to lenders and borrowers,” said Kevin Palmer, head of Multifamily for Freddie Mac. “We continue to maintain a laser focus on providing liquidity, stability and affordability to the market, and FHFA has again set strong requirements that create the conditions for us to deliver on our priorities.”
“A cap of $70 billion for each of the GSEs is reasonable, given the challenging market conditions and high interest rate environment expected in 2024,” said Bob Broeksmit, president and CEO of the Mortgage Bankers Association. “We appreciate FHFA’s ongoing flexibility should adjustments to the caps and mission-driven requirements be necessary and believe exempting loans supporting workforce housing from the cap levels will help to ensure GSE financing is a viable option for housing providers in the current environment.”
To keep the government-sponsored enterprises’ missions of affordable housing and serving underserved markets on track, the FHFA, as it has in previous years, will require that at least 50% of their multifamily business is mission-driven, affordable housing. Additionally, loans classified as supporting workforce housing properties will be exempt from the volume caps (all other mission-driven lending will remain subject to the limits).
“The 2024 multifamily loan caps, coupled with the exemption for workforce housing properties from the caps, will promote the Enterprises’ continued strong commitment to addressing the need for affordable rental housing,” said FHFA Director Sandra L. Thompson. “The workforce housing exemption should encourage conventional borrowers to commit to preserving rents at affordable levels for extended periods of time.”
