2025 Multifamily Loan Purchase Caps for Fannie Mae and Freddie Mac

11/18/2024

Background

Since 2015, FHFA has set caps on the Enterprises’ conventional (market-rate) multifamily businesses.
The purpose of the caps is to ensure the Enterprises support liquidity in the multifamily market, particularly for affordable housing and underserved segments, without crowding out private capital.
To encourage Enterprise financing in affordable housing and underserved markets, FHFA initially excluded several categories of business from the caps.
In September 2019, FHFA revised the cap structure to apply to all multifamily business and removed previous exclusions.
For 2024, FHFA set a $70 billion volume cap for each Enterprise with a 50 percent mission-driven minimum percentage. FHFA also allowed workforce housing loans to be exempt from the caps.
In 2025, FHFA will set a $73 billion volume cap for each Enterprise and maintain the 50 percent mission-driven minimum.
Workforce housing loans will continue to be exempt from the volume caps in 2025.

The 2025 volume caps for multifamily loan purchases by Fannie Mae and Freddie Mac (the Enterprises) will be $73 billion for each Enterprise, totaling $146 billion for the calendar year.
FHFA anticipates the 2025 cap levels will be appropriate given current market forecasts. FHFA will closely monitor the multifamily mortgage market and may increase the caps if necessary. Should the actual size of the 2025 market be smaller than initially projected, FHFA will not reduce the caps.

To maintain a strong emphasis on affordable housing and underserved markets, FHFA will continue to require that at least 50 percent of the Enterprises’ multifamily businesses be mission-driven, affordable housing in accordance with the definitions in Appendix A of the Conservatorship Scorecard.
To further promote affordable housing preservation, loans classified as supporting workforce housing properties in Appendix A will remain exempt from the volume caps. All other mission-driven loans will still be subject to the volume caps.

Starting in 2024, FHFA has allowed the exclusion of workforce housing loans from the volume caps to expand Enterprise support for affordable housing preservation.
Introduced in 2023, the workforce housing mission-driven category in Appendix A captures loans that preserve rents at affordable levels, typically without the use of public subsidies.¹
Fannie Mae’s Sponsor-Initiated Affordability (SIA)² and Sponsor-Dedicated Workforce (SDW)³ programs, and Freddie Mac’s Workforce Housing Preservation⁴ and Tenant Advancement Commitment⁵ programs all support eligible workforce housing loans.
Workforce housing loans may include financing from corporate-sponsored housing funds and initiatives that support affordable housing creation and preservation.
Through the third quarter of 2024, the Enterprises have financed over $4.5 billion in workforce loans, more than doubling their combined total in 2023.
FHFA anticipates continued growth in workforce business as conditions in the multifamily market improve.