Toward More Reliable Financing for Mixed-Use Development?

Not out of the woods yet, but it appears momentum is growing to create a more reliable source of funding for mixed-use developments. An alphabet soup coalition of National Association of Home Builders (NAHB), Congress for the New Urbanism (CNU), and the National Town Builders Association (NTBA) is pushing for Fannie, Freddie, and HUD to guarantee mortgages for a more diverse, incl. mixed-use, portfolio of real estate. 

A Big Urban Victory – Mixed-Use and Fannie, Freddie and the FHA

The board of the National Association of Home Builders (NAHB) has approved a resolution that could have a dramatic impact on urban mixed-use, Main Streets and good development overall. In a partnership with the Congress for the New Urbanism (CNU) and the National Town Builders Association (NTBA), the resolution by NAHB supports reform of Fannie Mae, Freddie Mac and the Federal Housing Administration’s guidelines for mixed-use development.


Currently, Fannie, Freddie and the FHA will not guarantee a mortgage on a development or building that is more than 25% commercial space. The resolution would raise that limit to 45%. This is significant because historic Main Street districts and new infill development would be suddenly eligible for significant new investment opportunities.

Streetsblog Capitol Hill has more:

Urbanists have won an important victory in their campaign to reverse Fannie Mae and Freddie Mac’s bias against mixed-use development, enlisting the National Association of Home Builders to help push for a critical reform to Fannie Mae and Freddie Mac’s lending standards. The mortgage giants currently require that projects they finance be no more than 25 percent commercial (20 percent for Fannie and for multifamily HUD projects.)

The Congress for the New Urbanism has waged a battle against these mandates. “Every Main Street in America violates Fannie Mae’s and Freddie Mac’s rigid standards,” CNU President John Norquist has said.

According to CNU, Fannie and Freddie’s commercial-space maximums have had “a distorting effect on building types and development patterns,” especially disadvantaging low- to mid-rise buildings with retail on the first floor and apartments or condominiums above. “Before these regulations, low-mid rise mixed use buildings were common.”