FHFA raises 2025 limits for Fannie Mae and Freddie Mac to address rental affordability
The Mortgage Bankers Association (MBA) said that the Federal Housing Finance Agency's (FHFA) decision to raise multifamily loan purchase caps for Fannie Mae and Freddie Mac in 2025 was “appropriate”, as the industry anticipates modest improvements in market conditions.
The FHFA has announced a 4% increase in the multifamily loan purchase caps for Fannie Mae and Freddie Mac, setting a combined limit of $146 billion for 2025. Each government-sponsored enterprise (GSE) will now have a purchasing cap of $73 billion, up from $70 billion in 2024.
FHFA director Sandra Thompson said the updated caps aim to sustain liquidity in the rental housing market and address affordability challenges. The agency also confirmed that loans for workforce housing will remain exempt from the caps, a move Thompson said supports the GSEs’ mission to preserve affordable rental properties.
The loan limit hike contrasted with the FHFA’s stance last year, when the 2024 cap was set below 2023 levels.
“Over the past year, since workforce housing was first exempted from the caps, both enterprises have seen encouraging growth in this critical market segment,” the agency said in a statement.
FHFA will continue to require that at least 50% of Fannie Mae and Freddie Mac’s multifamily businesses be mission-driven. The housing watchdog also added that it could raise the limits further if the multifamily sector shows stronger-than-expected demand in 2025.
“The agency will continue to monitor the multifamily mortgage market and maintains the ability to raise the caps further if necessary to support liquidity in the market,” it said. “However, to prevent market disruption, if FHFA determines that the actual size of the 2025 market is smaller than was initially projected, FHFA will not lower the caps.”
The mortgage industry welcomed the cap adjustment, which is "appropriate" given expectations for improved market conditions and lending activity as interest rates gradually decline, MBA president and CEO Bob Broeksmit said.
“The 4% increase in the multifamily loan purchase caps to $73 billion for each GSE is appropriate, given the slightly improved market conditions and lending activity that’s expected next year due to the slow decline in interest rates,” he said. “The cap levels should ensure that the GSEs are a viable option for lenders that finance properties that serve lower-income households and those living in rural areas.
“We are also supportive of the continued cap exemptions for loans that support workforce housing and appreciate that FHFA will remain flexible should adjustments to the caps and mission-driven requirements be necessary.”
Read next: Mortgage agency invests $1m in affordable workforce housing
Broeksmit also stressed the need for a balanced approach across multifamily capital sources, urging policymakers to prioritize rental affordability and availability.
“We will work with the Trump administration and Congress on policies and initiatives that boost rental housing supply and improve affordability,” he said.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
