FHFA Announces 2022 Multifamily Loan Purchase Caps for Fannie Mae and Freddie Mac
The Federal Housing Finance Agency (FHFA) announced the 2022 multifamily loan purchase caps for Fannie Mae and Freddie Mac - $78 billion for each Enterprise, for a combined total of $156 billion to support the multifamily market.
The caps for 2022, which show an increase from $70 billion for each Enterprise the prior year, are aligned with FHFA's projections of the overall growth of the multifamily originations market.
As expected, there is a strong focus on affordable housing and traditionally underserved markets, and FHFA will require that at least 50 percent of the Enterprises' multifamily business be mission-driven affordable housing. FHFA will also require at least 25 percent of the Enterprises' multifamily lending business be affordable to residents at or below 60 percent of area median income (AMI), up from 20 percent in 2021.
New Mission-Driven Definitions
FHFA also has changed certain definitions of multifamily mission-driven affordable housing, allowing loans on affordable units in cost-burdened renter markets and loans to finance energy or water efficiency improvements with units affordable at or below 60 percent of AMI to be classified as mission-driven.
FHFA Acting Director Sandra L. Thompson, commented, "The increases of the multifamily loan purchase caps and higher mission-driven business requirements assure that the Enterprises' multifamily businesses have a strong and growing commitment to affordable housing finance, particularly for residents and communities that are the most difficult to serve."
To ensure the Enterprises continue to provide sufficient liquidity and support in the multifamily mortgage market, FHFA indicates it will continue to monitor impacts of COVID-19 on the multifamily mortgage market and will update the multifamily caps and mission-driven requirements if adjustments are warranted. At the same time, if FHFA determines that the actual size of the 2022 market is smaller than was initially projected, FHFA will not reduce the caps.