Copyright: Terroa
The Federal Housing Finance
Agency (FHFA), Fannie Mae and Freddie Mac’s (GSEs) regulator, announced that they are raising the GSEs multifamily lending cap from $31 billion to $35 billion. An
analysis of first quarter production and the forward pipeline of activity
showed that the size of the market is running ahead of initial forecasts. As
part of the process outlined in the GSEs Scorecard, FHFA used industry input to
make the assessment on the size of the market.
NMHC/NAA were one of the sources that provided input for the FHFA
analysis.
Total multifamily purchases
for the GSEs stood at $30.1 billion in the first quarter of 2016 compared to
$20.4 billion in the same period in 2015. The types of loans that are excluded
from counting towards the cap remained unchanged - namely affordable, small
balance, manufactured housing and energy efficient properties.
Freddie Swings to a $354M Loss, Fannie
Reports Profit of $1.14B
Importantly, both GSEs
released their first quarter earnings this week with Freddie Mac reporting a net loss of $354 million, representing their second loss in three
quarters. Similarly, in the past the losses were not caused by loan performance,
but by accounting treatment of loans on their balance sheet, largely comprised
of single family loans.
Fannie Mae’s earnings report showed a profit of $1.14 billion, which is down from $1.89 billion a year
ago and $2.47 billion in the fourth quarter of last year. This decrease resulted
from lower long-term interest rates hurting the value of the derivatives that Fannie
uses to manage risk. This decline was moderated by increases in credit-related
income. The mortgage giant also reported that it plans to send a $919 million
dividend payment to the Treasury Department this summer.
The reported losses by Freddie, and declines in revenue for Fannie, have raised the voice of some in Congress, as well as other industry groups, to take up reform of the GSEs.
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