The companies will exit the market except through their previously existing investor programs
Fannie Mae and Freddie Mac are ending their single-family rental pilot programs that have operated in the last two years, the Federal Housing Finance Agency has announced.
The government-sponsored enterprises will then terminate their participation in the single-family rental market except through their previously existing investor programs – Fannie Mae’s Multiple Financed Properties and Freddie Mac’s Investment Property Mortgages.
Through their pilots, Fannie Mae and Freddie Mac expanded the scale of their participation in the single-family rental market to “test and learn” more about the market and best practices.
“What we learned as a result of the pilots is that the larger single-family rental investor market continues to perform successfully without the liquidity provided by the enterprises,” FHFA Director Melvin Watt said.
The FHFA clarified that the GSEs are not precluded from proposing changes to their existing programs to meet the needs of the single-family rental market. Fannie Mae and Freddie Mac can also still develop proposals calculated to utilize single-family rentals as a pathway to homeownership.
The National Association of Realtor (NAR) welcomed the announcement.
"With inventory shortages facing housing markets across the country, the National Association of Realtors has long advocated for the Federal Housing Finance Agency to end its expansion into the single-family rental market and return its focus to promoting a liquid and efficient housing market, as Congress intended,” NAR President Elizabeth Mendenhall said. “By financing the purchase of thousands of single-family homes for institutional investors to use as rentals, Fannie Mae and Freddie Mac compounded on inventory shortages and affordability concerns, which are holding back prospective homebuyers across the country.”