The 2024 multifamily loan purchase caps for Fannie Mae and Freddie Mac will be $70 billion each for a combined $140 billion to support the multifamily market, announced the Federal Housing Finance Agency (FHFA). The caps are down from the combined $150 billion for 2023.

To ensure a strong focus on affordable housing and underserved markets, FHFA will require that at least 50% of the government-sponsored enterprises’ (GSEs’) multifamily businesses be mission-driven, affordable housing. In addition, FHFA will allow loans classified as supporting workforce housing projects to be exempt from the volume caps in 2024. This mission-driven category was created in 2023 to preserve rents at multifamily properties, with affordability levels corresponding between 80% and 120% of the area median income, depending on the market. All other mission-driven loans remain subject to the volume caps.

“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.”

FHFA also noted that it will monitor market conditions and may update the multifamily caps if warranted. If the 2024 market is smaller than projected, the caps will not be reduced.

Bob Broeksmit, president and CEO of the Mortgage Bankers Association, noted that the caps are reasonable, “given the challenging market conditions and high interest rate environment expected in 2024.”

“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,” he added. “MBA supports a level playing field across various capital sources and will continue to work with FHFA, the GSEs, and other industry stakeholders on ways to increase affordable rental housing.”