With stability growing in market conditions, stronger maturity volumes, and a gradual decline in interest rates, multifamily lending activity is projected to rise in 2026
U.S. Federal Housing (FHFA) has announced that the 2026 multifamily loan purchase caps for Fannie Mae and Freddie Mac (GSEs) will be $88 billion for each enterprise, for a combined total of $176 billion to support the nation’s multifamily market.
Bob Broeksmit, CMB, President and CEO, Mortgage Bankers Association (MBA)
“The $15 billion increase in the multifamily loan purchase caps to $88 billion for each GSE aligns with MBA’s expectations for the multifamily market in 2026,” said Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit, CMB.
To ensure a strong focus on affordable housing and underserved markets, the FHFA will require that at least 50% of the GSE’s multifamily businesses be mission-driven, affordable housing. Just like in 2025, multifamily loans that finance workforce housing will be excluded from the 2026 limits. All other mission-driven loans remain subject to the volume caps.
The following are examples of loans on targeted affordable housing properties that FHFA will classify as mission-driven:
Loans on properties subsidized by the Low-Income Housing Tax Credit (LIHTC) program, which limits tenant eligibility based on income levels required by LIHTC program rules.
Loans on properties developed under state or local inclusionary zoning, real estate tax abatement, loan or similar programs, where the property owner has agreed to: (a) restrict a portion of the units for occupancy by tenants with limited incomes in accordance with the requirements of the state or local program and restrict the rents that can be charged for those units to rents affordable to those tenants; and (b) enforce these restrictions through a regulatory agreement or recorded use restriction.
Loans on properties covered by a Section 8 Housing Assistance Payment contract where the contract limits tenant incomes to 80% of area median income (AMI) or below. FHFA will not consider a unit that is occupied by a Section 8 certificate or voucher holder as a targeted affordable housing unit unless there is also a contract, a regulatory agreement, or a recorded use restriction.
Loans on properties where a Public Housing Authority (PHA), or a nonprofit development affiliate of a PHA, is the borrower and where the regulatory agreement or recorded use restriction restricts all or a portion of the units for occupancy by tenants with limited incomes and/or restricts the rents that can be charged for those units.
Kelly Follain, executive vice president and head of multifamily, Fannie Mae
"Fannie Mae remains committed to providing dependable liquidity and innovative solutions that support the multifamily housing market in America,” said Kelly Follain, executive vice president and head of multifamily at Fannie Mae. “U.S. Federal Housing’s 2026 multifamily loan purchase cap will enable us to continue this important work, ensuring people have access to quality, affordable places to live, in communities throughout the country. We look forward to partnering closely with our lenders and other stakeholders in the year ahead to deliver housing opportunities where they are needed most."
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The FHFA announced that it will continue to monitor the multifamily mortgage market and will increase the caps if necessary, however, in order to prevent market disruption, if the agency determines that the actual size of the 2026 market is smaller than initially projected, it will not reduce the caps.
Kevin Palmer, head of multifamily, Freddie Mac
“Freddie Mac Multifamily delivers essential liquidity to create affordable apartment supply around the country each and every year,” said Kevin Palmer, head of multifamily for Freddie Mac. “In 2026, we will continue to provide that needed liquidity with our full suite of offerings and continued innovation. We thank Director Pulte and U.S. Federal Housing for enhancing our capability to finance even more affordable housing in the year ahead.”
Broeksmit added, “Stable market conditions, strong maturity volumes, and a gradual decline in interest rates are expected to lift multifamily lending activity next year. The announced cap levels will help ensure the GSEs remain a reliable source of financing for rental properties, including those serving lower-income households and rural communities. We support the continued cap exemptions for targeted workforce housing and appreciate FHFA’s willingness to adjust caps and mission-driven requirements if needed.”
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