Federal Reserve Purchase of GSE Debt Securities May Benefit Multifamily Housing

On November 25, the Federal Reserve (the Fed) announced that it will institute a program to purchase up to $100 billion of the debt securities of the housing-related government-sponsored enterprises (GSEs) Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.

The plan to purchase the direct obligations of the GSEs was part of a larger announcement by the Fed under which it also agreed to purchase up to $500 billion of mortgage-backed securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae, and launched a $200 billion Term Asset-Backed Securities Loan Facility (TALF) to support student, automobile, and credit card loans, as well as loans backed by the Small Business Administration.

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