Most of the concerns about the new regulation hinge on how much profit the GSEs can make under the bumped-up capital levels. Most industry observers appear to be on the side of “not enough.”
Affordable housing advocates say a high concentration of ownership by private equity firms makes residents of manufactured home communities vulnerable to unsustainable increases in rent or maintenance fees.
Treasury claims the GSEs’ unfair advantage is because of their capital treatment. Urban Institute researchers say it’s because of the government backstop of their credit risk.
The new cap structure will allow each firm to invest up to $100 billion in multifamily projects over the next five quarters. At least 37.5% of that investment must be for affordable housing.
The GSE is trying to gather all the stakeholders of the affordable housing “ecosystem,” including lenders, counselors, local housing agencies, and real estate professionals, under a single umbrella.