Government-Affiliated Agencies Increase Multifamily Lending Caps

Published by www.VentureMortgage.com

On May 5th, 2016, the FHFA increased multifamily lending caps for the year by $4 billion, to $35 billion from $31 billion. The government agency cites increased estimates in the size of the United States multifamily market; loans in “certain affordable and underserved market segments will continue to be excluded from the purchase caps”, according to an official news release. This action increases the availability of capital for investors in the multifamily sphere, aligning with the agency’s stated goal of “supporting liquidity in the housing market”, as described by FHFA Director Mel Watt.

The Mortgage Bankers Association (MBA.org) appears to be supportive of the decision. According to David Stevens, MBA’s president and chief executive, “MBA supports FHFA’s data-driven approach in reviewing the size of the multifamily loan origination market. FHFA’s review and adjustment… (will) help avoid market disruptions and allow for competition among capital sources that finance this vital market.” Mr. Stevens’ reference to competition likely refers to the stated purpose of the cap within the aforementioned release, which is to ensure that these government-sponsored entities do not dominate the multifamily financing market by pushing out private capital sources.

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