David Link sees big roles for Fannie Mae, Freddie Mac in 2024 multifamily lending market — even with $10B loan cap cut

DENVER (April 10, 2024) — The Federal Housing Finance Agency’s (FHFA) decision to reduce the 2024 loan cap from $150 billion to $140 billion may not be of much concern for multifamily lending. The FHFA will continue to monitor the caps in relation to the market and may consider an eventual increase.

David Link, executive vice president and regional managing director at Northmarq, believes there will be a significant increase in transaction volume “and Fannie and Freddie want to be there” even with the $10 billion loan cap cut.

Link provided insights on Fannie Mae’s and Freddie Mac’s roles in the 2024 multifamily lending market with Multi-Housing News in an article titled, “With capital scarce, GSEs remain critical.”

Exempt from this cap is workforce housing, which is a key part of the government-sponsored enterprises’ (GSEs) mission to preserve affordable rents.

“It’s important that they do as much of that as possible because, in the near term, banks’ balance sheets aren’t in great shape and they’re going to struggle,” said Link, who noted the exemption for workforce housing projects is not surprising.

Fannie Mae and Freddie Mac will continue to play a critical role in the multifamily lending market in 2024, although they pulled back “dramatically” in 2023. Link believes GSEs will play the largest role in financing multifamily projects since “they’re more able to get really competitive on rates when it comes to workforce housing, affordable housing.”

Expectations for 2024 are positive, as Link believes transaction volume for GSEs will not be as low as last year: “We feel pretty optimistic that there will be more transaction volume, and largely because the banks are going to force activity to get things off their books.”

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Northmarq is a Fannie Mae DUS lender that has closed more than $9 billion in Fannie Mae transactions.

Northmarq is also part of the Freddie Mac Optigo Seller/Servicer network and is consistently ranks among the top lenders in the number of loans originated for Freddie Mac each year.

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Northmarq is a full-service capital markets resource for commercial real estate investors, offering seamless collaboration with top experts in debt, equity, investment sales, loan servicing, and fund management. The company combines industry-leading capabilities with a flexible structure, enabling its national team of experienced professionals to create innovative solutions for clients. Northmarq's solid foundation and entrepreneurial approach have built an annual transaction volume of more than $39 billion and a loan servicing portfolio of more than $76 billion. Through the 2022 acquisition of Stan Johnson Company and Four Pillars Capital Markets, Northmarq established itself as a provider of opportunities across all major asset classes. For more information, visit: www.northmarq.com.