The market is just made a move, did you see it?

4 Replies

Fannie and Freddie just announced that they are going to stop their investor program.  They will still be in sfh and larger multi.  They did not outline a date and all the details.

The real impact is still unknown  There will be winners and losers.  

Winners:  

Credit unions and private lenders

Cash buyers 

losers:

Tenants

Small first time investors 

Every investor should be following this closely it is going to change the market. These loans are the cheapest and most difficult to get. It will push up the cost of money for a lot of investors. Non traditional lending may see this as an opportunity to cash in. The 800 lbs gorilla just left the ring. They no longer have any competition to keep the rates reasonable. Ending of this program will likely help cool the housing market. House hacking and BRRR will become more important. Buy and hold will be more expensive, but if prices drop it may be a net zero change.

Bottom line:  People still need a place a place to live who can not or do not want to own.  Collectively, we provide a valuable service to the economy.     

https://www.fhfa.gov/Media/PublicAffairs/Pages/Fan...

I pulled the trigger to fast and the title can not be edited once it is posted

 The title should be:

 The market just made a move, did you see it?

The Federal Housing Finance Agency (FHFA) today announced that Fannie Mae and Freddie Mac (the Enterprises) will conclude their single-family rental pilot programs and 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.

Not trying to discredit anything, but this was a 2 year pilot program.... seems like plenty were able to do ok prior to that, wouldn't it be likely they could continue after as well?

@Lesley Resnick I don't think a pilot program (started 2 years ago) finishing is the 800lb gorilla leaving the room. If there is going to be any major effect, most serious investors should welcome that. There is unending speculation in most markets and we all know how that story ends. 

That being said, I would like to reiterate that nothing is going to change.. because, you know.. humans. 

@Lesley Resnick The pilot program was tailored to specific institutional investors, details that were oddly omitted by FHFA in the announcement. It was discontinued because it looks bad on fannie and Freddie. This has no impact to investors at large. http://www.mortgagenewsdaily.com/08222018_single_family_rentals.asp

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