The Federal Housing Finance Agency (FHFA) has proposed 2025-2027 housing goals for Fannie Mae and Freddie Mac for lending on both single-family and multifamily housing. Fannie Mae and Freddie Mac have also announced how they will enforce the new tenant protections that will be required for multifamily properties they finance after February 28, 2025.
A slight shift in housing goals
The FHFA sets goals for the GSEs which call for them to focus their lending on properties which will house lower-income residents. While these goals were once expressed in terms of the numbers of units financed, recently they have been expressed in terms of percentages of total units financed.
The goals for 2025-2027 continue to be expressed as percentages of total units financed and are nearly the same as last year’s goals. They are:
- 61 percent of units financed must be affordable to families with incomes less than or equal to 80 percent of area median income (AMI)
- 14 percent of units financed must be affordable to families with incomes less than or equal to 50 percent of AMI
- 2 percent of units financed must be in small properties (5 to 50 units) and affordable to families with incomes less than or equal to 80 percent of AMI
Last year’s goals for the three categories were 61 percent, 12 percent and 2.5 percent respectively.
The FHFA’s housing goals document is available here.
Defining consequences
In July, the FHFA announced that they would be requiring that new tenant protections be put in place on all multifamily properties with financing from the Government Sponsored Entities (GSE’s), Fannie Mae and Freddie Mac. Those protections are:
- 30-day written notice in advance of any rent increase
- 30-day written notice in advance of a lease expiration
- 5-day grace period for late rent payments
Properties with GSE loans signed after February 28, 2025 will have to begin incorporating the protections into their leases within 6 months of the loan closing, unless their leases already contain the protections.
If the protections are not already part of the property’s policies, all residents at the property will have to be informed in writing within 6 months of loan closing that these protections are in place, even if they are not called out in the property’s leases.
All leases will have to contain the protections within 24 months of loan closing.
Borrowers whose properties are found to be non-compliant will be given 30 days to come into compliance. Continued non-compliance will result in the borrower being assessed a penalty of 0.2 percent of the original loan amount. Persistent non-compliance will result in the loan being declared to be in default.
The terms are the same for either Fannie Mae or Freddie Mac. Freddie Mac’s lease standards are defined here
