this federal housing finance agency (FHFA) published a final rule in the Federal Register this week outlining housing goals for government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and seeks to establish annual standards to achieve goals.
According to information released this week, the proposed goals for 2025 through 2027 are intended to ensure that mortgage loans purchased by the Government-Sponsored Enterprises “responsibly promote equitable access to affordable housing for low- and moderate-income households, minority communities and other underserved populations.” ” by the agency.
On the single-family side, FHFA recommends that 25% of purchase mortgage loans obtained by Fannie Mae and Freddie Mac go to borrowers earning less than 80% of area median income, which is up from the 28% required by current housing goals. decline. It also seeks to set a new target of 6% for extremely low-income purchases (borrowers earning less than 50% of AMI), down from 7% under the current plan. The proposed income refinancing target of 26% remains unchanged, as does the purchase sub-target of 4% for low-income census tracts. The minority census puts forward a housing purchase target of 12% for 2025-2027, up from the current 10%.
In the single-family housing sector, GSEs “must meet the benchmark levels established in the final rule or meet actual market levels for the year determined retroactively based on Home Mortgage Disclosure Act (HMDA) data.”
The rule would establish a new compliance assessment process that differs from the current framework, which requires any GSE to submit a plan to improve its performance if it fails to meet certain housing goals.
Instead, the new guidance states that in this case, the FHFA “will not require housing plans if the business performs at the level required by the newly defined execution factors. These execution factors partly address the difficulty of forecasting the market years in advance.” Uncertainty and the time lag problem of retrospectively determining actual market levels.
On the multifamily side, each business must “purchase mortgages for multifamily properties and meet a target share of units in each target category that are affordable to households and meet the needs of low-income households purchasing small (5-50 units) multifamily properties.” household housing sub-goals,” FHFA explains.
FHFA Director Sandra Thompson said setting such goals would help ensure voters don’t get lost in the shuffle of broader issues across the housing market.
“Given the ongoing challenges in the housing market, FHFA is proposing baseline levels that reflect these dynamics and continue to ensure that businesses remain focused on supporting critical affordable housing sectors while operating in a safe and sound manner,” Thompson said in the statement. The targets proposed today provide a meaningful and realistic calibration that takes into account current and forecast economic factors.”
Comments on the proposed rule for inclusion in the Federal Register may be submitted until October 21, 2024.
