Publications

- January 1, 2020: Vol. 32, Number 1

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Increased capital requirements could slow down Fannie, Freddie privatization

by Loretta Clodfelter

Proposed new capital requirements at the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corp. (Freddie Mac) will have implications for commercial real estate, especially the multifamily sector, and could mean a delay in privatization of the agencies, which were taken over by the federal government in the wake of the global financial crisis. The government-sponsored enterprises were placed into conservatorship in 2008 and are regulated by the Federal Housing Finance Agency (FHFA).

In 2018, the FHFA said the agencies would need $180 billion in capital in order to support a privatization — but it is now looking like the number will need to be even higher. In November, the FHFA announced plans to repropose regulation on capital requirements for the GSEs in 2020.

“The capital rule is one of the most important rules I will issue as director. This rule will be reproposed and finalized within a timeline fully consistent with ending the co

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