Fannie Mae and Freddie Mac 2022 Update
The Federal Housing Finance Agency (FHFA) is a governmental agency that dictates policy for Fannie Mae and Freddie Mac. Fannie and Freddie are two of the largest sources of apartment loans and multifamily mortgages nationwide, as they purchase apartment loans from banks and other lenders. FHFA policy changes determine how aggressive lenders will be in the multifamily market. The FHFA recently announced the multifamily loan caps for 2022.
Loan purchase caps have been set at $78 billion for both Fannie Mae and Freddie Mac, a total of $156 billion for 2022. This represents an 11.4% increase as compared to the loan levels for Fannie Mae and Freddie Mac of $70 billion each ($140 billion total) in 2021.
Continuing the same standard from 2021, the FHFA will still require that at least 50% of the total volume for Fannie Mae and Freddie Mac be designated as mission-driven, affordable housing. An adjustment from 2021 is the requirement that at least 25% of this multifamily business be affordable to residents at or below 60% of the area median income (AMI). In 2021, this requirement was set at 20%. The updated structure will “assure that Fannie Mae and Freddie Mac’s multifamily business have a strong and growing commitment to affordable housing finance, particularly for residents and communities that are most difficult to serve”, said FHFA Acting Director Sandra Thompson.
The FHFA also indicated that it will closely watch the affects of Covid-19 on the multifamily mortgage market and will make adjustments as necessary to these caps to maintain a healthy market in 2022.
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Author
Stephen A. Sobin is the President and Founder of Select Commercial Funding LLC. Mr. Sobin has over 35 years’ experience originating commercial real estate loans. He formed Select Commercial to offer commercial mortgage banking and real estate capital advisory services to his clients on a national basis. His goal was to become an advocate for his clients and to help them navigate the ever-changing economic conditions facing the banking industry and to assist them by providing access to commercial real estate funds despite the uncertainty of the capital markets. The company was founded on the belief that most small to medium sized property and business owners lacked the expertise and sources to obtain the best financing options in the $1,500,000 to $10,000,000 range. While large real estate companies often have in-house finance professionals, most small to medium sized borrowers do not have the same access to professional advice and sources of funds. Mr. Sobin focuses on providing those services to this segment of the market.