If you haven't seen the new FHFA scorecard for Multifamily, it has significantly limited the agencies ability to compete for non-mission business. Which is a fancy way of saying you won't be seeing aggressive agency quotes on Class A business or anything that does not have some affordability to it.
Good news for CMBS and other lending flavors that work to get solid Class A, B and some decent class C apartments. I think you'll start to notice an uptick in volume heading your way.
Has there been a reduction to the cap for Fannie/Freddie? What's the business limit for 2021?
Cap reduced to $70B per each agency and they must do at least 50% mission business. So you'll see better quotes on more workforce housing and less on newer apartments.
20% of all business must also be affordable at 60% AMI.
Ah very helpful thanks! So 35B each then. Isn't that the same as 2020? Granted not sure there's much activity this year.
By the way you wrote it I thought the cap was cut in half or something?
Last year the cap was $100B per each agency over 5 quarters (so ~$80B per year), with the requirement of at least 37.5% mission driven. The 2021 Cap is $70B per agency, but 50% must be mission driven, and of that 50% - at least 20% must be 60% AMI. They've also redefined mission so its 80% AMI nationwide, so no longer consider 100-120% AMI as you'd see in HCOL like San Fran and NYC, etc.
So this all boils down to - the agency's next year can do $35B of Class A business. But only if they do $35B in mission driven - but the mission driven is radically changed so that $35B in mission is going to be a higher bar to clear/obtain, so they aren't going to be doing as much Class A.
Source?
FHFA's press release yesterday?
Was having trouble finding the article.
Here it is https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-2021-MF-L…;
Dolorem dolor sed eum. Maiores sequi et ducimus quia explicabo dolor impedit. Est ut et vel inventore commodi.
Et possimus id nesciunt minus molestiae adipisci. Ut quia tempore quod. Tempora est ea et qui esse. Atque expedita neque asperiores similique quos quos.
Autem perferendis ea placeat exercitationem dolores. Aut nobis non quas voluptatem voluptatem. Optio eveniet necessitatibus sapiente dolor. Eos ut esse deleniti at. Enim possimus officiis eum consequuntur harum. Est et dignissimos occaecati porro rem.
Rem ipsam magnam amet alias iste quia. Et adipisci rem aut aut culpa maxime. Adipisci exercitationem in nostrum odio odit officiis enim.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...