Federal regulators have increased multifamily loan purchase caps for Fannie Mae and Freddie Mac by $15 billion each for 2026, signaling expectations for a robust recovery in apartment lending next year.
The Federal Housing Finance Agency set 2026 caps at $88 billion per government-sponsored enterprise, up from $73 billion in 2025. The combined $176 billion ceiling marks a 20% increase over current limits.
Fannie and Freddie support the housing market by purchasing loans and selling them to investors, freeing up cash so lenders can make more loans. Industry professionals view the higher caps as a sign that multifamily lending will rebound in 2026 after two years of subdued activity.
"This is a critical consideration for financial stability given that [government-sponsored enterprise] lending plays a dominant role in multifamily markets, accounting for about 40% of the total debt market," George Ratiu, vice president of research for the National Apartment Association, told CoStar News in an email.
The cap increase aligns with market forecasts driven by several factors: stable market conditions, significant maturity volumes and declining interest rates.
The multifamily market faces close to $90 billion in maturing debt in 2026. Much of that debt originated when rates sat below 5%, according to Ratiu.
"The maturing debt is also held in larger share by banks, CMBS and non-bank lenders, which may be more conservative in 2026, positioning Fannie and Freddie as stronger alternatives for investors looking to refinance," he said.
Bob Broeksmit, president of the Mortgage Bankers Association, called the higher caps appropriate.
"The $15 billion increase in the multifamily loan purchase caps to $88 billion for each [government-sponsored enterprise] aligns with MBA's expectations for the multifamily market in 2026," Broeksmit said in a statement.
Though Broeksmit and others project a stronger market for apartment loans next year, Fannie and Freddie have operated under their mortgage purchase ceilings over the past four years.
Both enterprises remained well below their 2025 caps through the first three quarters. Fannie Mae purchased $47.9 billion in multifamily mortgages while Freddie Mac reported $47 billion in new business.
"Fannie Mae remains committed to providing dependable liquidity and innovative solutions that support the multifamily housing market in America," Kelly Follain, executive vice president and head of multifamily at Fannie Mae, said in a statement. The "2026 multifamily loan purchase cap will enable us to continue this important work."
Under the new caps, the FHFA will continue to require that at least 50% of Fannie and Freddie’s multifamily businesses support affordable housing. In addition, loans classified as supporting workforce housing properties will remain exempt from the volume caps.
Workforce housing is affordable for middle-income households that may not qualify for subsidized housing but cannot afford market-rate housing. Such housing typically serves essential workers such as teachers, nurses and police officers.