2018 Changes to Green Advantage, the Lending Cap and a New Affordability Category
November 29, 2017
The Federal Housing Finance Agency (FHFA) recently announced the 2018 multifamily lending cap will be $35 billion for Freddie Mac and Fannie Mae. As in prior years, FHFA will review its estimates of the multifamily loan origination market size on a quarterly basis and may increase the caps if necessary. Loans in certain affordable and underserved markets continue to be excluded from the cap.
For 2018, FHFA also made changes to the multifamily volume cap exclusions for loans that finance energy or water efficiency improvements, and announced a new extremely high-cost market category. The evolution of the volume cap framework supports our ability to help renters nationwide and our efforts in underserved housing markets.
Freddie Mac Multifamily Green Advantage®
For 2018, FHFA will allow Green Up® and Green Up Plus® loans to be excluded from the volume cap if energy or water usage is reduced by 25 percent.
In line with these changes, we’re updating the Freddie Mac Multifamily Green Advantage® program for loans purchased on or after January 1, 2018. Borrowers must reduce energy or water usage by at least 25 percent to qualify for Green Advantage. We’ll no longer have a minimum spend requirement for green improvements, nor a minimum age for eligible properties.
In August 2016, we launched the highly successful Green Advantage® program to help Borrowers improve their properties and reduce energy and water consumption.
We’ve purchased nearly $18 billion in loans and helped finance 184,000 units in just the first 16 months of the program. We’re proud to be making a real difference for Borrowers, renters and the environment.
Extremely High-Cost Markets
In addition, FHFA will add an extremely high-cost market category to address the critical shortage of middle-income housing. Units at rents affordable to those at or below 120 percent of the area median income in extremely high-cost markets will be eligible for exclusion from the cap on a pro-rata basis.
Please contact your relationship manager if you have any questions about these changes. We look forward to your continued business.