Forum Spotlight: GSE/Multifamily Lenders

October 30, 2023

Together, Kate Whalen (Forum Chair), Ahmed Hasan (Chair-Elect), Emily Schultz (Past Chair), along with Jason Griest and Alonzo White (both GSE representatives) form the “Leadership Working Group” of CREFC’s GSE/Multifamily Lenders Forum. Importantly this group sets the agendas and priorities for the Forum, as well as represents their constituencies on CREFC’s Policy Committee.

Key GSE/Multifamily Lenders Focus Areas:

  • Macro volatility - how are rising rates and fluctuating credit spreads impacting issuance;
  • Availability of credit in the wake of the regional banking crisis;
  • Upcoming FHA scorecard and updates around how any changes may impact 2024 business.

What they’re saying: The GSE and multifamily arena stands out as an area of strong credit amid a tidal wave of concerns in the commercial real estate sector. Yet, heightened macro volatility and continued elevated benchmark rates, have caused multifamily loan originations and securities issuance to remain significantly depressed.

By the Numbers. CREFC polled the audience at its June 2023 annual conference and found that over 50% of participants expected GSE multifamily issuance to end 2023 north of $100 billion. Today, that goal is unlikely to be met for two reasons:

  • A significant valuation gap exists between buyers and sellers, and
  • Considerations around mission driven business.

CREFC is hosting its fall DC Symposium on November 28 with FHFA Director Sandra Thompson speaking with CREFC’s Executive Director, Lisa Pendergast. Attendees will be eager to hear the Director’s thoughts on issues such as the state of multifamily housing, housing affordability, and tenant protections.

Key Policy Issues:

SEC’s Conflict of Interest in Securitization Proposal

  • The proposal is intended to prevent securitizers from designing a transaction to fail and then profiting from a bet against that transaction.
  • The definitions are broadly written and could engulf numerous CMBS participants and a broad range of “conflicted activities” that go beyond shorting a transaction. GSE securities are not exempt from the proposal.
  • CREFC submitted two comment letters on the issue and is engaging with lawmakers on Capitol Hill.

Basel Endgame Capital Proposal

  • The federal banking regulators have proposed raising capital on banks with $100 billion assets and above.
  • The proposal will alter the risk weights and capital requirements for multifamily loans and securities, which could impact bank participation with the GSEs and their securities.
  • The proposal may affect bank trading of GSE CMBS, but not necessarily bank investments in GSE CMBS.
  • GSE CMBS held for investment are subject to a 20% risk weight, which is not changing under the proposal. GSE CMBS held for trading are subject to a different formula to calculate risk weights, and that formula is becoming significantly more punitive.

Community Reinvestment Act: The banking agencies recently finalized the Community Reinvestment Act, which will have an impact on how banks support affordable housing. CREFC is analyzing the final rule.

Tenant Protections: CREFC joined with other trade organizations in responding to the FHFA’s RFI on tenant protections. The letter urged the FHFA not to unduly complicate the compliance regime or impose harmful rent control policies.

What's next: Forum leaders look forward to presenting CREFC members with an update on their forum at the Annual January Conference in Miami. Soon after, the chairs will seek nominations for the next Chair Elect to join their leadership slate.

To join the GSE/Multifamily Lenders Forum, please register here. For any forum related questions, please contact Kathleen Olin


Lisa Pendergast
Executive Director

Raj Aidasani
Managing Director, Research

GSE_Multifamily - 2023 - CREFC Forums Spotlight 
The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2023 CRE Finance Council. All rights reserved.

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