Multifamily caps have kept Fannie and Freddie from expanding their footprint in the apartment market, which grew by 25% in 2021 and is expected to expand by as much as 11% this year.
Don Layton believes the new 2022 loan limits will cause home prices to increase even more, but the politicization of the housing-finance system makes it unlikely FHFA will be able to do anything about it.
The new goals don’t deviate dramatically from what the agency proposed in August, but the mulitfamily goals will only apply to 2022 instead of the usual three-year time span.
Critics argue that the mechanical method for determining the loan limits distorts the market and makes it harder for the GSEs to meet their affordable housing goals.
Sandra Thompson, the acting FHFA director, said Fannie and Freddie have responsibilities beyond the narrow affordable housing goals to ensure access to credit for borrowers in all parts of the country.
Critics say FHFA’s proposed changes to the enterprise regulatory capital framework are a move in the right direction, but the agency still hasn’t addressed the procyclicality of the rule or explained how the new provisions were calculated.
The Federal Housing Finance Agency sets new standards for assessing Fannie Mae’s and Freddie Mac’s performance and releases a report assessing its own performance.
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