[ad_1]
The federal regulator for Fannie Mae and Freddie Mac announced changes on Friday to refine its role in the multi-family mortgage market.
the Federal Housing Finance Agency raised the multi-family loan ceilings for the country's two largest mortgage financiers to $ 100 million, but this will not necessarily increase the volume, as it also ended the exemption for "green loans" that had inflated GSE balance sheets. The regulator has also announced that it is reclassifying loans in certain rural areas and high-cost areas as eligible for the GSE prescribed for affordable housing.
"Multi-family housing is an essential part of the shortage of affordable housing in our country," FHFA director Mark Calabria said in a statement. housing assistance compared to previous levels. "
The exclusion of loans that finance improvements in energy efficiency and the rational use of water and water has been eliminated, but this does not mean that loans are prohibited. They will be considered "classic businesses," said Calabria. The new ceilings cover a five-quarter period from October 1 to the end of 2020.
"We are seeing a tendency to avoid potential problems by limiting the amount of multi-family debt accumulated as the economy grows, which could limit the ability of GSEs to be a viable player in the market when the economy is in crisis. . a slowdown and an extremely tight market, "said Greg McBride, Chief Financial Analyst at Bankrate.com. "Private capital is at its peak when the market is doing well."
In an information sheet accompanying the announcement of Calbria, the FHFA presented its data under the heading: "The old caps did not work as expected".
The share of Fannie and Freddie in new multi-family loans has increased from 36% in 2015 to 49% in 2017, said the FHFA. Much of this increase is due to the green loan exemption. According to FHFA data, about half of the loans taken by the two companies in 2017 and 2018 were excluded from the credit limit of the FHFA.
"In recent years, the multi-family market has grown and the share of loans extended by several families to the business has increased significantly," says the fact sheet. "This has put companies in a pro-cyclical role in the multi-family market."
To explain: regulators and many lawmakers who have a say in the management of so-called government-sponsored businesses do not want the government to compete with private companies or to stimulate the real estate boom. GSEs are seen as important support in difficult times, which means that the economy is going badly. This is called a "countercyclical" role.
"What we need is a counter-cyclical housing finance system," Calabria said in a speech delivered in June, two months after his appointment as head of the FHFA. "It means that it has to be reliable, stable and liquid in the long run – throughout the business cycle and the housing cycle."
The multi-family market has more than doubled since the trough of its Great Recession in 2009. Builders experienced a 1.2 million increase in multi-family units in July, at a seasonally adjusted pace and annualized, down by a record high of 1.3 million reached in 12 years in May. Commerce Department The data.
The United States has added more than 10 million households over the last decade, for a total of 127.6 million by the end of 2018, and they all need a place to live. "Refuse demand" is not counted in the household number, that is, people who want to start a family or live alone, but can not find a place they can afford. because of the lack of units.
[ad_2]
Source link