FHFA Issues Statement of Support for GSE Multifamily Activity

MBA (9/15/2008 ) MBA Staff
The Federal Housing Finance Agency, the successor to the Office of Federal Housing Enterprise Oversight, issued the following statement Friday in support of continued multifamily business involving Fannie Mae and Freddie Mac:
"FHFA has stated that business will continue as usual at the Enterprises during the conservatorship—this applies to both their single-family and multifamily businesses.

FHFA recognizes the importance of all aspects of the Enterprises’ multifamily businesses—including the LIHTC (low-income housing tax credit) area and liquidity facilities for remarketed mortgage revenue bonds – for a healthy secondary market and housing affordability. In particular, support for multifamily housing finance is central to the Enterprises’ public purpose.

FHFA’s September 7, 2008 Statement Regarding Contracts of Enterprises in Conservatorship (posted on www.ofheo.gov) applies equally to the single-family and multifamily businesses. It states that the conservatorship does not affect existing contracts, nor the authority of the Enterprises to enter into new contracts, nor their enforceability.

As conservator, FHFA expects each Enterprise to continue underwriting and financing sound multifamily business. We also do not expect either company to liquidate its portfolio of LIHTC or mortgage-revenue bonds.

FHFA will only intervene when there is a question of unsafe and unsound business practice that would have a negative impact on an Enterprise's financial position and is outside of the normal course of business. Under these unusual circumstances, both Enterprises would first seek advice and guidance from FHFA before proceeding further as they deem appropriate."