The Federal Housing Finance Agency announced changes to the methodology Fannie Mae and Freddie Mac will use to measure their multifamily housing goals. Under a rule proposed today, the GSEs will switch from using the number of units in multifamily properties financed annually by each institution to the percentage of units financed.
FHFA last year established benchmark levels for the multifamily housing goals for 2022, citing the pandemic and the potential for unforeseen changes to multifamily market conditions as reasons for sticking to a single year. The proposed goals would be for 2023 and 2024. The agency is not proposing any changes to the underlying criteria that determine which multifamily units qualify for credit.
FHFA acknowledged that its existing methodology does not incentivize Fannie Mae or Freddie Mac continue to acquire mortgages backed by goal-qualifying units after the institutions have purchased enough mortgages to meet the minimum numeric benchmark.
“Today’s proposed rule would ensure that each Enterprise’s focus remains on affordable segments of the multifamily market and reaffirms FHFA’s commitments to its statutory duty to promote affordability nationwide,” said FHFA Director Sandra Thompson. “The proposed change to the methodology will make the multifamily housing goals more responsive to market conditions.”