The Federal Housing Finance Agency’s (FHFA) Annual Housing Report outlines the Enterprises’ 2024 affordable housing initiatives and complies with the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended (Safety and Soundness Act) reporting requirements. The report includes the findings of FHFA’s assessments and ratings of the Enterprises’ 2024 Duty to Serve performance, as well as the agency’s final analysis of the Enterprises’ performance toward the housing targets for 2024.
What are housing goals?
Under the Safety and Soundness Act, U.S. Federal Housing must set yearly housing targets for single-family and multifamily mortgages that Freddie Mac and Fannie Mae buy. The Enterprises have “an affirmative obligation to facilitate the financing of affordable housing for low- and moderate-income families in a manner consistent with their overall public purposes, while maintaining a strong financial condition and a reasonable economic return.” The housing goals are one indicator of how well the Enterprises are fulfilling their public purposes.
For residential mortgage lending, the Enterprises have persisted in promoting a steady and liquid national market. By rule, U.S. Federal Housing sets annual housing targets for the Enterprises and assesses their performance annually in relation to the housing targets.
Single-Family Goals and Subgoals
- Low-income home purchase goal for home purchase mortgages to families with incomes no greater than 80% of area median income (AMI);
- Very low-income home purchase goal for home purchase mortgages to families with incomes no greater than 50% of AMI;
- Low-income areas home purchase goal for mortgages to families with incomes no greater than 100% of AMI living in a federally declared disaster area, as well as mortgages that meet the criteria for the following subgoals:
- Low-income refinance goal for refinance mortgages to families with incomes no greater than 80% of AMI.
- Minority census tracts subgoal: For home purchase mortgages to families with incomes no greater than 100% of AMI in minority census tracts (census tracts that have a minority population of at least 30% and a median income of less than 100% of AMI);
- Low-income census tracts subgoal: For mortgages to families in low-income census tracts (census tracts where the median income is no greater than 80% of AMI) that are not minority census tracts, and to borrowers with incomes greater than 100% of AMI in low-income census tracts that are also minority census tracts.
Multifamily Goal and Subgoals
- Low-income multifamily goal for rental units in multifamily properties affordable to families with incomes no greater than 80%of AMI;
- Very low-income multifamily subgoal for rental units in multifamily properties affordable to families with incomes no greater than 50% of AMI;
- Small multifamily low-income subgoal for rental units in multifamily properties with between 5 and 50 units affordable to families with incomes no greater than 80% of AMI.
Housing Goal Performance — National
The 2024 single-family housing target levels are represented as a percentage of each Enterprise’s mortgage purchases on single-family owner-occupied homes. For purchase loans and refinance loans, U.S. Federal Housing set distinct single-family goals.
An enterprise reaches a goal for the 2024 single-family housing goals if it meets or surpasses at least one of the following:
- The specific benchmark levels established in the Agency’s final rule published on December 28, 2021; or
- The “market level,” which is defined as the share of conventional, conforming mortgage originations that qualified for the goal based on the Agency’s analysis of Home Mortgage Disclosure Act (HMDA) data.
Note: While the market level computation acts as a year-end analysis, the benchmark level acts as a future objective for which the enterprises can make plans.
Additionally, according to the report, an estimated $326 billion worth of single-family mortgages were acquired by Fannie Mae and $346 billion by Freddie Mac in 2024.
U.S. Federal Housing established a multifamily mortgage acquisition cap of $70 billion for each Enterprise on November 14, 2023, for a total of $140 billion year 2024. According to the criteria in Appendix A of the Conservatorship Scorecard, the Agency mandated that at least 50% of each Enterprise’s multifamily loan purchases be mission-driven in order to guarantee an emphasis on affordable housing and neglected markets. Loans categorized as supporting workforce housing properties were not subject to the volume cap in 2024. Every other mission-driven loan was still capped at a certain amount.
Multifamily loans considered to be mission-driven under the Scorecard for 2024 included:
- Subsidized affordable housing
- Preservation loans at workforce housing properties
- Manufactured housing communities that receive credit under the Duty to Serve regulation
- Green loans that finance energy or water improvements
- Affordable units with unsubsidized/market rents (including conventional housing, small
multifamily properties of between 5 and 50 units, and seniors housing) - Affordable units in properties in rural areas
Additional Highlights — National
The Enterprises exceeded the requirement that 50% of their business be mission driven in 2024 by actively managing their multifamily loan acquisition production to stay below the $70 billion cap for each Enterprise. The total amount of multifamily loans acquired by Fannie Mae at the end of the year was $55. billion. According to Appendix A of the Conservatorship Scorecard, mission-driven acquisitions accounted for 34.8 billion (63%) of the total. The total amount of multifamily loans acquired by Freddie Mac at the end of the year was $65.1 billion. According to Appendix A of the Conservatorship Scorecard, mission-driven acquisitions accounted for $42.2 billion (65%) of the total.
Both businesses surpassed their loan acquisition goal for manufactured home communities (MHC) with certain pad lease protections in 2024. By financing 122 MHC properties, totaling 19,908 units and $0.943 billion in mission-adjusted unpaid principal balance (UPB), Fannie Mae surpassed its revised goal of $0.8–$1.0 billion in UPB. MHC loans were acquired by Freddie Mac on 31,024 pads. Its revised goal of 17,100 pads was surpassed.
Fannie Mae fell short of its baseline of 8,196 loans and target of 9,500 loans by acquiring 4,792 loans backed by manufactured housing titled as real property. Freddie Mac surpassed its baseline of 6,247 loans and target of 6,300 loans by acquiring 8,478 loans secured by manufactured housing titled as real property.
In 2024, both businesses backed the Section 8 program of the Department of Housing and Urban Development (HUD). 21,241 units were supported by 171 loans that Fannie Mae acquired to finance Section 8 projects. Freddie Mac exceeded its initial aim of 27,300 units and its revised target of 22,600 units by supporting 28,009 Section 8 apartments through its loan purchases.
Note: The report provides data on how single-family loans are distributed by sex, race/ethnicity, and median income per census tract. Along with details on mortgage payment options (such as fixed-rate or adjustable-rate mortgages), loan-to-value ratios, and credit scores, the report also breaks out the single-family mortgage product types that each Enterprise has purchased.
To read the full report, click here.
The post FHFA Details Housing Goal Performance, Mortgage Acquisitions first appeared on The MortgagePoint.
