Fannie Mae will increase the loan limit of small mortgage loans to $6 million from $3 million or less nationwide, and $5 million or less in high-cost markets. The increase reinforces Fannie Mae’s continuing endeavors to guarantee an adequate supply of affordable housing for the nation’s working families.
“We have a strong track record in the small loan space, and continuously calibrate our product features and credit parameters,” Ann Atkinson, Fannie Mae director, multifamily customer engagement, told MHN. “Multifamily property values have been on the rise over the years, supporting the increase to our small loan definition up to $6 million nationwide.”
“We always look for ways to increase delegation and offer a better process for lenders,” added Paul Gembara, director, multifamily credit risk for Fannie Mae. “The increase in our loan limit to $6 million truly supports multifamily workforce housing. This change creates more opportunity for small loan borrowers and lenders to get the benefit of our streamlined underwriting, asset management, and reduced origination costs.”
Rick Wolf, head of Greystone’s small loans platform, noted that Fannie Mae’s move is a very significant accomplishment and enhancement for the benefit of workforce housing. “Expanding the efficiencies and competitiveness of the Fannie Mae small loan product to a $6 million loan limit is a definite positive for borrowers and renters alike, and will help better position the small loans product in the market,” he added.
By increasing the loan limit for its small mortgage loan program, Fannie Mae will provide more capital and liquidity to the small loan marketplace, helping address the large affordable workforce housing supply woes impacting the nation, observed Michael Winters, vice president, multifamily customer engagement for Fannie Mae.
“Our commitment to providing sustainable financing solutions that enhance affordability, security and convenience of financing smaller properties plays an important role in securing a key source of housing for working families,” he added.
New eligible markets
In addition to increasing the small mortgage loan size limit, Fannie Mae added a number of new eligible markets that receive certain pricing and underwriting benefits. These new metropolitan statistical areas (MSAs) are Denver, Miami, Minneapolis and Salt Lake City. All of these markets have witnessed credit and economic performance not dissimilar to Fannie Mae’s other eligible MSAs, which include Baltimore, Boston, Chicago, Los Angeles, New York City, Oxnard, Calif., Philadelphia, Portland, Ore., Sacramento, San Diego, San Francisco, San Jose, Seattle and Washington, D.C.