The Federal Housing Finance Agency (FHFA) has issued a proposed rule that would establish the housing goals for 2025-2027 that Fannie Mae and Freddie Mac (the GSEs) would be required to meet on an annual basis. FHFA is requesting comments on all aspects of the proposed rule during the 60-day public comment period.
The housing goals ensure that the GSEs, through their mortgage purchases, responsibly promote equitable access to affordable housing that reaches low- and moderate-income families, minority communities, and other underserved populations.
“Given persistent challenges in the housing market, FHFA is proposing benchmark levels that reflect these dynamics and continue to ensure that the Enterprises remain focused on supporting key affordable housing segments while operating in a safe and sound manner,” said FHFA Director Sandra L. Thompson. “The goals proposed today offer a meaningful and realistic calibration that takes into account current and forecasted economic factors.”
For the single-family housing goals categories, the Enterprises must meet the benchmark level established in the final rule or meet the actual market level determined retrospectively for the year based on Home Mortgage Disclosure Act (HMDA) data.
The proposed rule would establish a new process for evaluating compliance with the housing goals. Under the current regulation, if one of the GSEs fails to meet a feasible housing goal, the FHFA may require that the GSE submit a housing plan describing the steps that it will take to improve its performance. The proposed rule would provide that FHFA will not require a housing plan if the GSE’s performance met the level required by newly defined Enforcement Factors. These Enforcement Factors address, in part, the uncertainty in forecasting the market several years in advance as well as the time lag in determining the actual market level retrospectively.
For the multifamily housing goals categories, the GSEs must meet the benchmark level established in the rule. Each GSE must purchase mortgages on multifamily properties with the target share of units affordable to families in each goal category, as well as meet a subgoal for low-income families in small (five to 50 units) multifamily properties.
Since 2010, the FHFA has established annual housing goals for GSE purchases of single-family and multifamily mortgages consistent with the requirements of the Safety and Soundness Act. The structure of the housing goals and the parameters for determining how mortgage purchases are counted or not counted are defined in the housing goals regulation. The most recent amendments to the housing goals regulation were a final rule published in 2021 to establish benchmark levels for the 2022-2024 single-family housing goals and the 2022 multifamily housing goals, and a final rule published in 2022 to establish benchmark levels for the 2023-2024 multifamily housing goals.
Differences in the proposed benchmark levels relative to prior housing goals are primarily attributable to changes in projected macroeconomic factors that impact market levels for the different affordable housing segments.
Click here to read the proposed rule from the FHFA.
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