Fannie, Freddie Plan to Reduce Multi-Family Lending Draws Criticism

Fannie, Freddie Plan to Reduce Multi-Family Lending Draws CriticismMortgage financing giants Fannie Mae and Freddie Mac are best known to Americans as backing single-family home loans, but the two entities also have a huge share of apartment-building, or multi-family, loans.
But Fannie and Freddie’s regulator, the Federal Housing Finance Agency (FHFA), is moving forward with plans to scale back on multi-family exposure. Fannie and Freddie back about 45 percent of the apartment-building market.
The reason for the scale-back is to push the two government-backed entities more toward private investment in housing finance.
Developers, lenders and affordable-housing advocates are criticizing the move, which they claim could hurt rural areas and smaller cities, such as Boise, Idaho, and Topeka, Kansas, of rental housing that private investors may neglect.
Dozens responded to a recent FHFA request for suggestions with the same message: Don’t do it at all.
“Without Fannie and Freddie, our ability to get deals done in smaller towns would be greatly reduced,” E.J. Burke, chairman of the Mortgage Bankers Association and an executive vice president at Cleveland-based KeyBank, said in an interview with Bloomberg. “We haven’t seen that impact yet, but down the line I’m very concerned if the conservator continues to cut their volumes.”
Read Bloomberg’s full article.

Leave a Reply

Your email address will not be published. Required fields are marked *