The two government-sponsored enterprises are on track to match 2019 origination volumes.

Freddie Mac and Fannie Mae are on track to lend nearly as many dollars to apartment properties in 2020 as they did in 2019. They have even loosened rules created in the early months of the COVID-19 crisis that required new multifamily borrowers keep enough reserves on hand to ensure they could make loan payments for as long as 18 months.

“These guys are going to do everything they can to backstop the market,” says Richard Katzenstein, senior vice president and national director of Marcus & Millichap Capital Corporation, based in New York City. “They are looking to put out as much capital as they can.”

In the first months of the crisis, Freddie Mac and Fannie Mae asked new borrowers to reserve enough money to pay the debt service on their loans for between six and -18 months, including both payments of principal and interest. Those reserve requirements are now often waived for new loans that are not as large as the maximum the agencies allow.

Overall Freddie Mac and Fannie Mae accounted for about $140 billion in multifamily lending activity, about 38 percent of the $364.4 billion of all multifamily lending, according to the Mortgage Bankers Assocation. And while lending for commercial and multifamily properties were dropped 48 percent in the second quarter compared to a year ago, loans backed by Fannie Mae or Freddie Mac only were down 5 percent year over year.

“Once you go up to the maximum proceeds—80 percent of the value of the property—then they want the reserves,” says Katzenstein.

Freddie Mac and Fannie Mae lenders have not added other requirements on multifamily borrowers. In contrast, for homeowners they have added a 50 basis point fee on new home loans that refinance existing mortgages that are delivered to the GSEs as of December 1, 2020. The fee will help cover likely losses to the portfolio of home loans in difficult economic times to come.