CREFC Responds to FHFA's Proposed Capital Amendments
May 15, 2023
On May 12, CREFC responded to the Federal Housing Finance Agency’s (FHFA’s) proposed Enterprise Regulatory Capital Framework amendments. Click here for CREFC’s comment letter.
What’s new: FHFA’s key proposed revisions included, among others:
- A risk multiplier of 0.6 (i.e., a 40% reduction) for multifamily mortgage exposures collateralized by properties with certain government subsidies, subject to certain affordability criteria;
- Clarification in the calculation of the stability capital buffer; and
- Extension of the compliance date for the advanced approaches to January 1, 2028.
We shared our support for a reintroduction of the 0.6x Subsidized Housing multiplier for multifamily mortgage exposures secured by one or more properties with at least one applicable government subsidy.
This change would align with the Enterprises’ role in ensuring the availability of capital for affordable and other under-served housing sectors.
What’s next: CREFC also used this opportunity to continue to advocate for more rational multifamily risk-weights, updating the single family and multifamily performance data cited in our previous comment letters. Please see here and here for CREFC’s comments on FHFA’s 2020 and 2021 ERCF proposals, respectively.
Please contact Sairah Burki at sburki@crefc.org with any questions.