Fannie Mae and Freddie Mac Multifamily Volume Caps Announced

The 2021 multifamily loan purchase caps for Fannie Mae and Freddie Mac will be $70 billion each, according to the Federal Housing Finance Agency (FHFA).

At least 50% of the government-sponsored enterprises’ (GSEs’) multifamily loans are required to be used for mission-driven affordable housing. This is a change from the 2020 cap structure that required 37.5% of the multifamily business to be affordable housing. At least 20% of the multifamily business must be affordable to residents at or below 60% of the area median income (AMI). This new minimum share of the business affordable to households at 60% of the AMI helps ensure that the GSEs’ multifamily businesses have a growing commitment to affordable housing, particularly for hard-to-serve households.

The FHFA also has made changes to simplify the multifamily definitions of mission-driven affordable housing to better align with those used by its Duty to Serve and Housing Goals programs. The definition is now housing that is affordable for residents at or below 80% of the AMI, with special provisions for rural housing and manufactured housing communities.

In addition, for the first time, affordable manufactured housing communities must be owned by residents, the government, or a nonprofit or have tenant pad lease protections to be counted as mission-driven affordable housing.

“Multifamily housing is a critical component of the nation’s housing supply and especially of its affordable housing stock,” said FHFA director Mark Calabria. “As we continue to address the shortage of affordable housing, especially amid the COVID crisis, FHFA will keep a close eye on the multifamily caps to ensure that they are sufficient and serve to increase the supply of affordable housing but do not crowd out private capital.”

The new caps apply to all multifamily business with no exclusions like the 2020 cap structure. However, according to the FHFA, the 2021 cap structure only covers four quarters of the 2021 calendar year, a change from the caps announced last fall that covered five quarters.