The Federal Housing Finance Agency (FHFA) today announced that the 2023 multifamily loan purchase caps for Fannie Mae and Freddie Mac (the Enterprises) will be $75 billion for each Enterprise. The cap structure allows the Enterprises to offer a combined total of $150 billion in support to the multifamily market. However, this is a total decrease of $6 billion over 2022, when the caps for each Enterprise was $78 billion.
At least 50% of the Enterprises' multifamily loans are required to be used for mission-driven, affordable housing. While this is the same percentage as last year, the definition of "mission-driven" has been expanded.
FHFA has changed certain definitions of multifamily mission-driven affordable housing in Appendix A of the Conservatorship Scorecard. In 2023, FHFA will allow loans to finance energy or water efficiency improvements with units affordable at or below 80% of area median income (AMI) to be classified as mission-driven, up from 60% AMI in 2022. This increase will allow the Enterprises to expand their effort on energy and water conservation measures at workforce housing properties.
Of note, FHFA dropped the requirement that at least 25% of loan purchases must be affordable to households at or below 60% of AMI.
FHFA also announced that it would increase the multifamily loan purchase cap for the Enterprises if adjustments are warranted, but the agency will not decrease the cap.