On the issue of FHFA’s constitutionality, the court ruled for the plaintiffs. But rather than invalidate the net worth sweep, the court struck the “for-cause” provision from HERA.
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.
Dealing with the risks in Fannie Mae’s and Freddie Mac’s portfolio is more complicated than simply reducing the footprint of the government-sponsored enterprises, FHFA Director Mark Calabria told IM&A.
One industry lobbyist, requesting anonymity, noted that when it comes to a possible recapitalization-and-release plan for Fannie and Freddie, “Everything flows from the capital rule. This shows us the [recap and release] process will not go quickly.”