FHFA just released 2021 Invest in Caps for Fannie & Freddie. Some fascinating modifications from this previous yr:
– $70B for each and every (down from $80B each in 2020)
– 50% of Cap need to be Mission Pushed (up from 37.5% in 2020)
**BUT**
– 2021 Cap Construction is on a 4-quarter system, not the 5-quarter process from 2014 – 2019. This equates to $1/2B a lot more/thirty day period in **capped** mortgage purchases.
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[Link to article](https://www.fhfa.gov/Media/PublicAffairs/Internet pages/FHFA-Announces-2021-MF-Loan-Purchase-Caps-for-Fannie-and-Freddie.aspx)
FHFA 2021 Obtain Caps Introduced – New Pointers for Organizations scored 9 points on Commercial-Realestate.net!
That means TheBaconShortage is 9 points closer to a Free Agent Listing!
I fully expect agencies to amplify their focus on B and C class properties to meet the 50% Mission Driven hurdle, especially in the last half of 2021 depending on their progress for the VLI hurdle. It will be interesting to see if there is any effect on Class A lending. If the focus is shifted far enough away from class A, I expect CMBS and large LifeCo to swoop in for market share.
Let me know your thoughts on what these changes will amount to in 2021.
Well, you also didn’t mention that the determination for what is mission driven also changed. Previously had a lot of markets where it was considered mission at 120% or AMI. Now it’s 80% across the board. So, certain markets it will be harder to qualify as mission, while other markets will be easier. A lot of noise on the statement issued from FHFA. The Agencies don’t seem worried about their ability to hit the 50% requirement.