Rental Properties Financed by Freddie Mac and Fannie Mae Have Slightly Lower Rents and Eviction Filing Rates

By Raquel Harati, NLIHC Research Analyst 

New research published in Housing Policy Debate titled “Rent and Eviction Filing at Enterprise Backed Rental Properties” examines whether financing from Fannie Mae and Freddie Mac (“the Enterprises”) affects rent levels and eviction filing patterns in multifamily properties. The authors find that properties financed by the Enterprises tend to have average rents and eviction filing rates that are 5% lower than non-Enterprise backed rental properties. These findings suggest that the Enterprises are having limited success in supporting affordable housing and housing stability for low-and moderate-income households. Therefore, the authors highlight areas where strengthening policies could allow the Enterprises to have a more substantial positive impact in promoting affordability and housing stability for low- and moderate-income renters.  

To conduct their analysis, the authors used geographic data to link multifamily loans issued by the Enterprises from 2018 to 2024 with eviction filing data from the Eviction Tracking System (ETS), rental listing information from Altos, and neighborhood characteristics such as area median income (AMI), poverty rate, and racial demographics. Their linked dataset ultimately provided a sample of 6.4 million Enterprise-backed properties nationally that the authors used to evaluate neighborhood characteristics, rent affordability, and eviction filing patterns. 

Enterprise-backed properties were more likely to be in neighborhoods that are whiter, have higher incomes, have lower rates of poverty, and have a lower proportion of renter households than non-enterprise backed properties. Sixty-three percent of Enterprise-backed properties had rents that were affordable to households at 80% AMI, 10% of properties were affordable to households at 50% AMI, and no properties were affordable to households at 30% AMI. After controlling for differences in neighborhood and property characteristics, Enterprise-backed properties had average rents and eviction filing rates that were 5% lower than non-enterprise backed properties. Eviction filing rates at Enterprise-backed properties displayed the same pattern of eviction filings seen in the general rental market, with a disproportionate share of filings being concentrated among a small subset of properties. Substantial differences in eviction filing rates also existed across geographies—for example in St. Louis, MO, filing rates at Enterprise-backed properties were 35% lower than non-Enterprise while in Tampa, FL, they were 12% higher.  

These findings suggest that the Enterprises have a modest impact on rent affordability and housing stability for renters living at properties with their financing. The Federal Housing Finance Agency’s conservatorship of the Enterprises provides a multitude of advantages from government authority to centralization, standardization, and transparency in financing that could be used to improve affordability and housing stability at Enterprise-backed properties even further. The authors propose two specific ways that this could be accomplished by the Enterprises: 1) implementing more aggressive affordability goals to ensure properties are affordable to more renters below 50% AMI and 2) taking a more active role in monitoring eviction filings at Enterprise-backed properties. These changes would ensure that federal multifamily investments made through the Enterprises promote stable and affordable housing for even more low- and moderate-income renters. 

The full article can be found here.