The Federal Housing Finance Agency (FHFA) unveiled a revised cap structure on the multifamily businesses of Fannie Mae and Freddie Mac today.

The new multifamily loan purchase caps will be increased to $100 billion for each government-sponsored enterprise (GSE), a combined total of $200 billion in support to the multifamily market, for the five-quarter period Q4 2019 to Q4 2020.

In a change from the prior structure, the new caps apply to all multifamily business, and there are no exclusions.

“Multifamily housing is a critical component of addressing our nation's shortage of affordable housing," said FHFA director Mark Calabria in a statement. “These new multifamily caps eliminate loopholes, provide ample support for the market without crowding out private capital, and significantly increase affordable housing support over previous levels. The enterprises should also manage under the caps to provide consistent, stable liquidity to the market throughout the entire five-quarter period."

The FHFA is directing that at least 37.5% of the GSEs’ multifamily business be "mission-driven affordable housing."

Loans that finance energy and water efficiency improvements will be considered conventional business, unless they meet other mission-driven affordability requirements, said the agency.

“FHFA’s new cap structure recognizes the need to preserve liquidity in the multifamily market and the essential role we play in financing affordable apartment units,” said Debby Jenkins, executive vice president, head of multifamily business at Freddie Mac. “Freddie Mac Multifamily will seamlessly adapt to the new cap structure by providing reliable financing and continuing to lead the market through sound underwriting, risk transfer, and technological innovation.”

The 2018 cap was $35 billion, but Freddie Mac’s total production figure was $77.5 billion because of several exemptions, namely $23 billion in green and $8.1 billion in affordable deals.

“FHFA’s revised multifamily cap structure supports the need for liquidity to the secondary market and recognizes Fannie Mae’s essential role as a stable source of multifamily mortgage capital,” said Jeffery R. Hayward, executive vice president and head of multifamily at Fannie Mae. “We will continue to deliver on our mission to provide liquidity to the multifamily mortgage market through our financing of quality, sustainable, and affordable rental housing.”

In January, Fannie Mae reported that it provided more than $65 billion in financing to the multifamily market with its Delegated Underwriting and Servicing program in 2018. The company issued more than $20 billion in green mortgage-backed securities backed by either green-certified properties or properties targeting a reduction in energy or water consumption. Additionally, Fannie Mae was active in the affordable housing market with overall production of $7.4 billion, an increase of 9% from 2017.

Here is FHFA’s fact sheet about the new caps.