Both of the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, operate under a $30 billion cap for purchases of multifamily loans, according to costar. Since they each hit $10 billion in the first quarter, they would max out by the third quarter, leaving no available funds to finance deals in the latter half of the year.
Fortunately, the Federal Housing Finance Agency (FHFA), while not raising those caps, adjusted the affordable housing lending exclusions so that multifamily loan amounts purchased by the GSEs will cover the percentage of units in a property that are considered affordable to renters at 60 percent of the area median income.
In addition to continue excluding manufactured housing rental communities from the caps, as MHProNews reported April 21, 2015, the FHFA also excluded assisted living units for seniors providing they are affordable at 80 percent of the area’s median income. In very higher cost areas, the threshold will be raised to 80 percent of the area’s median income, and even to 100 percent in areas where renters spend a higher percentage of their income on rent.
FHFA Director Melvin L. Watt says, “By responding to continued strong growth in the overall multifamily finance market and making these adjustments, we have sought to achieve two objectives – facilitating ongoing liquidity in the multifamily market and further encouraging the enterprises’ involvement in affordable rental housing.”
Additionally, exclusions from the previous caps only covered government subsidized rental units, but under the revisions, some conventional market-rate units may also be considered “affordable.” ##
(Image credit: costar)
Article submitted by Matthew J. Silver to Daily Business News-MHProNews.