On November 22, FHFA announced that Fannie Mae and Freddie Mac’s caps for multifamily lending will remain at $36.5 billion for 2017. The determination was based on the agency’s projection that the overall size of the multifamily finance market will remain roughly the same as it was in 2016. Multifamily loans in designated affordable and underserved segments will remain excluded from the caps.
Last week, on November 23, the FHFA announced that it will raise the maximum conforming loan limits for mortgages purchased by Fannie Mae and Freddie Mac in 2017 from $417,000 to $424,000. The announcement marks the first time FHFA has increased the baseline loan limit since 2006. In high-cost areas, such as Los Angeles, New York, San Francisco, and Washington, D.C., the maximum loan limit will be $636,150. Meanwhile, limits rose in all but 87 counties in the country. View the list of counties seeing increases here.
On November 20, the CFPB released the 2017 iteration of its annual lists of rural counties and rural or underserved counties for use in conjunction with the several CFPB rules that refer to “rural or underserved” and “rural” counties, including the balloon-payment qualified mortgage definition and the exemption from the escrow requirements for higher-priced mortgage loans. Rural counties were generally defined by using a U.S. Department of Agriculture classification system and under-served counties were defined by data collected under the Home Mortgage Disclosure Act. In addition to these lists, the bureau also directs lenders to use the its Rural or Underserved Areas Tool to provide a safe harbor determination that a property is located in a rural or underserved area for purposes of Regulation Z.
On November 18, the Department of Energy released new best practices guidelines for residential Property-Assessed Clean Energy (PACE) mortgages, which provide homeowners a way to finance energy-efficient home improvements through property tax assessments. The new guidelines are intended to help state and local governments as they expand their PACE programs, and address the various problems that have emerged in the market since the PACE framework was first established in 2009. Among other things, the guidelines suggest that PACE programs confirm property owners’ ability to repay their assessments, and that state and local governments work with program administrators to establish underwriting guidelines and criteria for PACE programs.
On November 15, HUD released its 2016 Annual Report to Congress Regarding the Financial Status of the Mutual Mortgage Insurance (MMI) Fund (the MMI Report). The MMI Report reflected the Fund’s improved financial condition for the fourth year in a row amid rising home prices, fewer defaults and a surge of new borrowers. The capital cushion of the Fund grew to 2.32 percent in fiscal 2016, up from 2.07 percent. It was only the second year since 2008 that the capital ratio, a proxy for the fund’s health, exceeded the 2 percent minimum required by law. The net worth of the Fund, which stands behind $1 trillion in U.S. home loans and serves as a sort of savings account to pay lender claims if borrowers default, grew by $3.8 billion to $27.6 billion.