APARTMENT ADVOCATE
NATIONAL APARTMENT ASSOCIATION
FHFA to Keep Apartment Capital Flowing
The Federal Housing Finance Agency (FHFA)
announced on May 7 that it is revising and expanding the definition of the affordable apartment housing loans that are excluded from the $30 billion
multifamily lending caps imposed on both Fannie
Mae and Freddie Mac.
Although the caps will remain unchanged, the
excluded loans will provide more lending capacity
to the apartment housing market through 2015.
FHFA’s decision was based on the concern expressed by our industry about keeping capital flowing to our market, which has seen significant growth
this year.
In the past, these loans that were excluded from
Fannie and Freddie’s caps were defined as targeted
affordable loans, small balance loans and manufactured housing communities. FHFA’s announcement
provides greater clarity on, as well as broadens the
definition of, the excluded loans. Here are the specific changes:
30 | TRENDS • JUNE 2015
• A pro rata portion of apartment housing
loan amounts purchased will be excluded
from the caps based on the percentage of
units in a property affordable to renters at 60
percent of area median income (AMI);
• In higher cost areas, the income threshold
for affordability will be increased to 80
percent of AMI;
• For very high-cost markets, the income
threshold for affordability will be increased
to 100 percent of AMI;
• Assisted living units for seniors will also be
excluded from the caps as long as they are
affordable at 80 percent of AMI; and
• The calculation of specific loan amounts
excluded from the caps for mixed income
targeted affordable housing properties will
also be modified.
The exact impact of these changes is not yet
known. Historically, nearly 90 percent of the loans
purchased by Fannie and Freddie have been at or
below 100 percent of AMI. We expect that the
changes will provide significant relief to the cap
constraint for apartment housing, but will also
help ensure that both entities continue to focus
on serving the affordable and workforce housing
rental markets.
SENATORS WORK TO MAKE
LOW-INCOME HOUSING TAX
CREDIT STICK
Senators Maria Cantwell (D-Wash.) and Pat
Roberts (R-Kan.) introduced legislation on May
5 to make the flat 9 percent Low-Income Housing Tax Credit (LIHTC) permanent. The bill
would also treat the 4 percent LIHTC for acquisitions the same way. The program leverages federal dollars with private investment to help finance
affordable housing projects nationwide.
www.aamdhq.org