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Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules
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Multifamily mortgage market. FHFAs consideration of the multifamily mortgage market addresses the size of and competition within the multifamily mortgage market, as well as the subset of the multifamily mortgage market affordable to low-income and very lowincome families. The pandemic has impacted the multifamily affordable housing market and renters across the country. In February 2021, the Mortgage Bankers Association MBA estimated that multifamily mortgage originations declined by 17 percent in 2020 relative to the previous year. The MBA also anticipated a partial recovery in 2021, with total multifamily mortgage originations projected to be $323 billion, a 7 percent increase from 2020 but still below the 2019 level of $364 billion.46
In addition, MBAs February forecast anticipated an economic rebound in 2021 that should bring stability to the market and projected that multifamily mortgage lending should almost fully rebound in 2022 to $358 billion, just shy of the 2019 level. Despite that overall expected rebound, recent multifamily housing trends point to likely prolonged and diverse impacts in subsegments.
According to the National Multifamily Housing Councils tabulation of American Community Survey microdata, in 2019 about 45.4 percent of renter households 20 million households lived in multifamily properties, defined as structures with five or more rental units with the remaining renter households living in 14 unit single-family structures.47
Nationally, on a year-over-year basis, rent growth slowed during the pandemic to 0.3 percent in 2020, according to CoStar data. Growth accelerated in the first half of the year, with the second quarter of 2021 growing by 7.1 percent relative to one year earlier. Vacancy rates rose during the pandemic but have begun to decline in 2021.
Role of the Enterprises. In setting the proposed multifamily housing goal benchmark levels, FHFA has considered the ability of the Enterprises to lead the market in making multifamily mortgage credit available. The Enterprises share of the overall multifamily mortgage origination market increased in the 46 See https www.mba.org/2021-press-releases/
february/mba-forecast-commercial/multifamilylending-to-increase-11-percent-to-486-billion-in2021; https newslink.mba.org/cmf-newslinks/
2020/november/mba-commercial-multifamilynewslink-nov-12-2020/mba-forecast-2020commercial-multifamily-lending-down-34-from2019-record-volumes/.
47 Accessed on 5/18/2021 at https
www.nmhc.org/research-insight/quick-facts-figures/
quick-facts-resident-demographics/householdcharacteristics.

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years immediately following the financial crisis, but their share has declined more recently in response to growing private sector participation.
The Enterprises share of the multifamily mortgage origination market was approximately 70 percent in 2008
and 2009, compared to 38 percent in 2015.48 The total share has remained at around 40 percent since 2015, due for the most part to the cap imposed by FHFA in its role as conservator under the Conservatorship Scorecard, with the exception of 2017 and 2020 when that share was around 50 percent.
FHFA and the Enterprises have also taken numerous actions to support the multifamily housing market and provide relief to renters since March 2020. For example, on March 23, 2020, FHFA and the Enterprises announced that forbearance would be available to Enterprise-backed multifamily property owners on the condition that they suspend eviction of tenants struggling to pay rent due to the pandemic.49 On June 29, 2020, FHFA announced that the Enterprises would offer extended forbearance agreements for multifamily property owners with existing forbearance agreements for up to three months, for a total forbearance of up to six months.50 Under the terms of the Enterprise forbearance agreements, while mortgage payments are in forbearance, the landlord must suspend all evictions for renters unable to pay rent and offer other protections for renters. This forbearance program was extended several times, with the most recent extension through September 30, 2021.51 52 53 On May 4, 2020, the Enterprises published online multifamily property lookup tools so that tenants could determine if the multifamily property in which they reside has an Enterprise-backed mortgage and fell under the CARES
Acts 120-day eviction moratorium. On August 6, 2020, FHFA announced that multifamily property owners in new 48 Urban Institute, The GSEs Shrinking Role in the Multifamily Market, April 2015, pg. 4: https
www.urban.org/sites/default/files/publication/
48986/2000174-The-GSEs-Shrinking-Role-in-theMultifamily-Market.pdf.
49 See https www.fhfa.gov/Media/PublicAffairs/
Pages/FHFA-Moves-to-Provide-EvictionSuspension-Relief-for-Renters-in-MultifamilyProperties.aspx.
50 See https www.fhfa.gov/Media/PublicAffairs/
Pages/FHFA-Provides-Tenant-Protections.aspx.
51 See https www.fhfa.gov/Media/PublicAffairs/
Pages/FHFA-Extends-COVID-19-MultifamilyForbearance-through-March-31-2021.aspx.
52 See https www.fhfa.gov/Media/PublicAffairs/
Pages/FHFA-Extends-COVID-19-MultifamilyForbearance-through-June-30-2021.aspx.
53 See https www.fhfa.gov/Media/PublicAffairs/
Pages/FHFA-Extends-COVID-19-MultifamilyForbearance-through-September-30-2021.aspx.

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forbearance agreements must inform tenants in writing about tenant protections, and that the Enterprises are improving their online multifamily property loan lookup tools.
FHFA expects the Enterprises to continue to demonstrate leadership in multifamily affordable housing lending by providing liquidity and supporting housing for tenants at different income levels in various geographic markets and in various market segments.
Conservatorship limits on multifamily mortgage purchases Conservatorship Scorecard cap and other factors.
Beginning in 2015, as conservator for the Enterprises, FHFA has set a yearly cap under the Conservatorship Scorecard that limits the total unpaid principal balance of multifamily loans that each Enterprise may purchase. The multifamily mortgage purchase cap furthers FHFAs conservatorship goals of maintaining the presence of the Enterprises as a backstop for the multifamily finance market while not impeding the participation of private capital. These targets for the Enterprise purchase share of the multifamily origination market reflect what is generally considered by FHFA as an appropriate market share for the Enterprises during normal market conditions. To encourage the Enterprises to participate in purchasing loans financing properties in underserved multifamily market segments, from 2015 through 2019, FHFA excluded several categories of multifamily business from the cap.
FHFA revised the cap structure in September 2019 by placing a cap on all multifamily loan purchases no exclusions and requiring a minimum amount of this capped amount to be for affordable and underserved market segments. The cap was set at $100
billion for each Enterprise, a combined total of $200 billion, for the five-quarter period from the fourth quarter of 2019
through the fourth quarter of 2020. In November 2020, FHFA announced the new multifamily loan purchase cap for the 2021 calendar year of $70 billion for each Enterprise, a combined total of $140 billion.54
The Conservatorship Scorecard cap applies to the entire multifamily business for each Enterprise without any exclusions. To ensure a strong focus on affordable housing and underserved markets, the 2021 Conservatorship Scorecard requires that at least 50
percent of each Enterprises multifamily 54 FHFA Announces 2021 Multifamily Loan Purchase Caps for Fannie Mae and Freddie Mac, November 17, 2020: https www.fhfa.gov/Media/
PublicAffairs/Pages/FHFA-Announces-2021-MFLoan-Purchase-Caps-for-Fannie-and-Freddie.aspx.

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