Causal Impact of FHFA's April 15, 2024 Multifamily Underwriting Tightening

Context

On April 15, 2024, FHFA tightened underwriting standards for multifamily loans purchased/guaranteed by the GSEs. You are asked to design a quasi-experimental study to estimate the policy's causal impact on:

• Monthly originations (counts and dollars), and
• 12‑month delinquency on newly originated loans.

Assume you have loan-level GSE data with application/lock/close dates, underwriting metrics (LTV, DSCR, debt yield), property characteristics, geography (MSA), lender, and performance.

Tasks

1. Design choices and identification
   • Define treatment, control, unit of analysis (MSA or property_type×MSA), and timing.
   • Justify a staggered difference‑in‑differences (DiD) with Sun–Abraham event‑study estimators versus synthetic control.
2. Diagnostics and robustness
   • Describe how you will test and visualize pre‑trends.
   • Specify falsification tests (placebo policy dates, treatment leads) and robustness checks (alternative time windows, event‑study binning).
3. Spillovers, composition, and interference
   • Address capital reallocation spillovers across MSAs, compositional shifts in borrowers/deals, and interference via lender networks.
   • Propose instrumentation or reweighting if needed.
4. Measurement and inference
   • Specify outcome definitions precisely, the clustering level for standard errors, and how you will communicate uncertainty to executives (e.g., prediction intervals vs. standard errors/confidence intervals).
5. Data and compliance
   • Outline data requirements and how you will handle policy anticipation (pull‑forward) and partial compliance (grandfathered pipeline, waivers).