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With Capital Scarce, GSEs Remain Critical

How will Fannie and Freddie's new mandates impact multifamily in 2024?

(This post includes excerpts from the article "With Capital Scare, GSEs Remain Critical" published by Multi-Housing News.) 

NewPoint's Marc Cesare recently spoke with Multi-Housing News about the role of the Agencies in the current market, and how new lending mandates will impact multifamily and affordable housing in 2024. 

Even as FHFA has scaled back Fannie Mae and Freddie Mac's combined loan cap to a combined $140 billion, new rules are making the deployment of capital to affordable and workforce housing easier. Each Agency's Low-Income Housing Tax Credit investment cap has been raised from $850 million to $1 billion annually. 

The increased LIHTC investment caps for both GSEs from $850 million to $1 billion, meanwhile, is a significant and welcomed jump, Cesare said. One that comes with "a continued emphasis on supporting mission-related transactions, especially those that the FHFA has identified as historically having difficulty attracting investors."

Any investments by the GSEs above $500 million must be for such transactions, including deals backing housing in "Duty to Serve"-designated rural areas, supporting mixed-income housing or providing supportive housing, Cesare noted.

Meanwhile, debt issued to workforce housing projects is exempt from the $140 billion cap, creating an opportunity for increased investment in the sector.

"With the macro challenges we are facing, along with workforce housing being exempt from the cap, we do not expect the $140 million cap to have much of an impact on multifamily lending this year," Cesare added.

Get the full story on Multi-Housing News here

(This post includes excerpts from the article "With Capital Scare, GSEs Remain Critical" written by Fotios Tsaroushi and published by Multi-Housing News on April 3, 2024.)