Freddie Mac, Fannie Mae Refocus on Workforce Housing Lending
February 17, 2022 | Bendix Anderson | Wealthmanagement.com
Freddie Mac and Fannie Mae will continue to be major backers of permanent loans to apartment properties in 2022—including luxury properties. But as multifamily investors continue to break records on prices, volumes and cap rates the two government-sponsored agencies will be bound by rigid limits on how much they can spend to buy loans to pricey, class-A apartments so they can focus more on supporting affordable and middle-market housing.
At least half of Freddie Mac and Fannie Mae’s lending business in 2022 will have to be “mission-driven” according to federal officials. That will focus them on lending to workforce housing properties, leaving them less leeway to compete to make loans to luxury buildings.
As investors spend more and more to buy class-A apartments, they will have to find new sources of financing for their deals.
“Freddie Mac and Fannie Mae’s market share will be one of the lowest we have seen in a long time,” says Dave Borsos, vice president of capital markets for the National Multifamily Housing Council. “The natural funder to fill in the gap this year is debt funds.”
