The Federal Housing Finance Agency (FHFA) recently issued a call for public input on strategies for reducing Fannie Mae and Freddie Mac’s presence in the multifamily housing finance market in 2014. This plan builds off FHFA’s Strategic Plan for Enterprise Conservatorships which created a goal of reducing the government sponsored entity’s (GSEs) presence in the marketplace by 10 percent while simplifying and shrinking certain operations. The agency expects to realize this goal this year through a combination of increased pricing, more limited product offerings and stronger underwriting standards.
FHFA is continuing to evaluate alternatives for further contracting the GSE’s multifamily business in 2014 and would like public input on potential market impact of various strategies, including:
- Restrictions on available loan terms;
- Simplification and standardization of loan products;
- Limits on property financing;
- Limits on business activities; and,
- Other options that FHFA should consider to contract the Enterprises’ multifamily businesses.
FHFA has released a report that explains the specific areas that the agency is considering as target reduction areas and the specific sub-goals within a broader volume reduction goals, which FHFA is seeking input from stakeholders.