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Fannie Mae and Freddie Mac Slow Multifamily Lending
Fannie Mae and Freddie Mac have recently introduced rate hikes and tightened underwriting in an attempt to rein in lending activity. Both agencies are currently on pace to hit their $30.0 billion lending caps by Q3 2015.
Freddie Mac’s multifamily lending volume reached $10.0 billion in Q1, while Fannie Mae issued $10.4 billion in multifamily mortgage-backed securities (MBS) during the same period.
Despite rate increases totaling approximately 0.5%, industry experts note rate hikes may fail to slow lending volume due to overall low rates. Even with a 0.5% increase, the rate for most Fannie Mae and Freddie Mac borrowers is between 4.0% to 4.5%.
The agencies have submitted a request to the Federal Housing Finance Agency (FHFA) to raise their lending caps for 2015. Should the FHFA grant their request, each is expected to receive an additional 20% (or $6 billion) at most, and that money is likely to come with restrictions.
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