A Mortgage Bankers Association white paper released Dec. 5 on the role of Fannie Mae and Freddie Mac in multifamily financing concluded that the government-sponsored enterprises must continue playing an active role in the multifamily housing segment, MBA NewsLink reported.

The white paper addressed questions raised by the Federal Housing Finance Agency’s February 2012 strategic plan for the future of the GSEs’ multifamily ventures.

The white paper, which noted that the multifamily housing market serves more than 15 million households (approximately one in seven in the U.S.), offered five key recommendations:

1. U.S. housing policies should reflect the importance of multifamily rental housing, range of resources that support the market, and the need for liquidity and stability in all market cycles.
2. Financing for multifamily housing should come primarily from private capital, with support from well-defined, government-backed insurance program to ensure market liquidity in all cycles.
3. Well-regulated entities should be permitted to issue government-backed multifamily securities.
4. Management of existing GSE assets and resources should be a core factor in any policy action on behalf of taxpayers.
5. Long-term liquidity and stability of multifamily finance in all market conditions should determine if the GSEs’ multifamily business should operate on a standalone basis, similar to their single-family credit guarantee businesses.

“These recommendations balance the role the federal government plays in multifamily housing finance with the need to continue to attract private capital into the market,” MBA President and CEO David Stevens, told MBA NewsLink. “MBA has worked, and will continue to work, with a host of stakeholders and industry groups to advance policy proposals that support a vibrant and balanced housing finance system.”

Download the MBA white paper.