In the seventh year of conservatorship, the fate of the government -sponsored enterprises, or GSEs, remains unclear, said panelists at the Bipartisan Policy Center’s 2014 Housing Summit in Washington, D.C.

The beginning of the year seemed promising and looked as though officials at Fannie Mae and Freddie Mac might get some answers this year. But, those hopes were dashed as the Johnson-Crapo bill in the Senate and the PATH act in the House both were stalled. Both pieces of legislation call for the reduction and eventual elimination of the GSEs, and for private investors to fill in the gap.

Michael Berman, who worked as a senior adviser for housing finance to HUD Secretary Shaun Donovan, says dismantling the GSEs and moving the Federal Housing Administration (FHA) into a risk-sharing model may be a step in the right direction, but poses many challenges.

“I think that would prove to be very difficult to adapt for the multifamily industry if not for the entire world of housing finance, most particularly in a counter-cyclical way,” he says.

After all, the GSEs and FHA kept the housing industry afloat during the harsh economic crash.

“Liquidity virtually dried up, banks shut down, life companies shut down, CMBS shut down and so I would hope on the house side there’s some substantial rethinking of how that should go,” Berman says.

However, any kind of decision would give much-needed direction and answers to industry officials by clearing uncertainty from the air.

Toby Bozzuto, president of Greenbelt, Md.-based The Bozzuto Group, says private investors need more stabilization before they’ll be ready to fill in any gaps.

“From a developer's perspective, we thrive on certainty,” Bozzuto says. “Certainty of transactions, certainty of where your funding is coming from and what the rules look like. Just like any game, you need to understand the rules. Where I think there’s been a tremendous amount of progress over the last 5 to 7 years, I would still say there is a tremendous amount of uncertainty as to what’s going to happen.”

Stillman Knight, an apartment developer focused on the Southeast, says the uncertainty surrounding the GSEs is hindering the progress of attracting investors to the market.

“If you want private-sector investment, investors have to be comfortable with what they’re investing in and that’s not the world we are living in today,” he says. “We are getting participation, we are getting some investment, but it’s kind of like the weather. You get a hurricane in one place and you’ve got a drought somewhere else and it’s snowing in South Dakota. I think the uncertainty is the key of what to watch if you want to know what is going to happen. As the uncertainty goes away, we’ll have a much better picture.”

Lindsay Machak is an Associate Editor for Multifamily Executive. Connect with her on Twitter @LMachak.