The Federal Housing Finance Agency (FHFA) has increased the multifamily lending caps for Fannie Mae and Freddie Mac by $4 billion for 2016.
The government housing agency increased the caps for the two Government-Sponsored Enterprises (GSEs) from $31 billion to $35 billion, effective immediately. Multifamily loans on affordable properties in certain underserved markets will continue to be excluded from the lending caps.
Melvin Watt, FHFA director, said in prepared remarks that the agency’s decision to increase the caps was a reaction to “the realities of the market” and to ensure that Fannie Mae and Freddie Mac have the flexibility to meet demand.
The multifamily finance market is larger than had been estimated due to continued high levels of property acquisitions and deliveries of newly constructed apartment units, as well as record levels of loan maturities that require refinancing, according to a statement from the FHFA.
Fannie Mae and Freddie Mac provided a combined $89.6 billion in new multifamily lending volume last year, according to numbers the GSEs released in February. Some anticipate that the GSEs loan volumes may eclipse $100 billion in 2016, as Real Estate Capital reported.
The FHFA regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks, which in sum provide more than $5.7 trillion in funding for the US mortgage markets and financial institutions.