NEW FNMA AND FREDDIE MAC BUDGETS WILL RESULT IN LOWER SPREADS/RATES STARTING IN OCTOBER
As we have reported the FNMA/Freddie Mac spreads have been way out of whack and WIDE for the last few months. The new budget announcements starting next month will likely result in lower spreads very soon. Now is a good time to start considering processing your project through an agency now. We anticipate a reduction of probably 50 basis points in spreads at some point in the near future. Actual production in fiscal year 2019 was close to $140 billion between the two agencies. The 2020 budget is $200 billion, which is a very good sign for pricing. Affordable housing is a key directive and will receive further pricing advantages. We are ready to size up your deal so you can take advantage of this new opportunity. We will also provide you current market reports for your property. Call 706-221-7464 or email us if you have any questions!
See below for program specifics:
The Federal Housing Finance Agency (FHFA) today announced a revised cap structure on the multifamily businesses of Fannie Mae and Freddie Mac (the Enterprises). The new multifamily loan purchase caps will be $100 billion for each Enterprise, a combined total of $200 billion in support to the multifamily market, for the five-quarter period Q4 2019 – Q4 2020. The new caps apply to all multifamily business – no exclusions.
“Multifamily housing is a critical component of addressing our nation’s shortage of affordable housing,” said FHFA Director Mark Calabria. “These new multifamily caps eliminate loopholes, provide ample support for the market without crowding out private capital, and significantly increase affordable housing support over previous levels. The Enterprises should also manage under the caps to provide consistent, stable liquidity to the market throughout the entire five-quarter period.”
To ensure a strong focus on affordable housing and traditionally underserved markets, FHFA directs that at least 37.5 percent of the Enterprises’ multifamily business be mission-driven, affordable housing. This new minimum of 37.5 percent responsibly assures that the Enterprises multifamily businesses have a strong and growing commitment to affordable housing finance.
Loans that finance energy and water efficiency improvements will be considered conventional business, unless they meet other mission-driven affordability requirements.
