Confirming our forecast that FHFA would waste no time doing the bidding spelled out in the Administration’s GSE reform plan, the agency on Friday redesigned the GSEs’ multifamily business.  This has considerable immediate impact in that area, perhaps sharply reducing the secondary market for environmental and similar lending.  We see it also as a precursor of FHFA action soon to come curtailing single-family purchases to focus on some forms of affordable housing under far more tightly defined product and prudential constraints.

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