Fannie Mae, Freddie Mac likely to hit lending caps in 2025

Fannie Mae and Freddie Mac are both likely to reach their multifamily lending caps in 2025, marking a notable shift from the previous two years when the agencies did not meet their limits. In 2025, the Federal Housing Finance Agency (FHFA) set the caps at $73 billion each, totaling $146 billion, which is about a 4% increase from 2024. Industry analysts and executives report that both entities have shown aggressive lending strategies and are on track to utilize the full cap, reflecting strong market demand and supportive regulatory policies this year.​

Lending Cap Details for 2025

• The FHFA increased the cap to $73 billion each for Fannie Mae and Freddie Mac, which is a $3 billion or 4% rise from the 2024 cap.​

• Workforce housing loans remain exempt from these caps, as do other mission-driven affordable housing initiatives, encouraging continued investment in affordable rental housing.​

• At least 50% of the multifamily business from both organizations must be mission-driven, according to FHFA policy.​

Reasons for Hitting the Cap in 2025

• Both agencies started 2025 with strong production volumes as the multifamily market improved and barriers to deal completion were reduced.​

• Industry observers point to a pro-production stance by the FHFA and administration, as well as potential motives to strengthen balance sheets in anticipation of possible moves toward ending conservatorship.​

• Demand for multifamily financing in a lower interest rate environment, and improved activity compared to the last two years, contributed to the cap being reached this year.​

Market Implications

• Analysts expect the caps to be appropriate for the current market environment but note the FHFA could adjust them further if market conditions change. However, if the market underperforms, the caps will not be reduced during the year.​

• Hitting the cap is seen as a sign of market strength, increased deal flow, and the agencies’ ability to support affordable and workforce housing amid ongoing housing challenges.​

In summary, unlike the past two years, Fannie Mae and Freddie Mac are actively managing their portfolios to hit the 2025 lending caps, suggesting both operational strength and robust demand for multifamily housing finance this year.​