Banking and Finance Law Daily FHFA sets 2021 affordable housing goals for Fannie Mae, Freddie Mac
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Thursday, December 17, 2020

FHFA sets 2021 affordable housing goals for Fannie Mae, Freddie Mac

By Thomas G. Wolfe, J.D.

Also, in an ANPR, the FHFA is seeking the public’s input on issues that the agency may address in future housing goals rulemaking.

The Federal Housing Finance Agency has announced its 2021 affordable housing goals for Fannie Mae and Freddie Mac, the government-sponsored enterprises (Enterprises). With current benchmarks set to expire on Dec. 31, 2020, and in light of the economic uncertainty surrounding the COVID-19 pandemic, the FHFA set the benchmarks for its single-family and multifamily housing goals for the 2021 calendar year only; those levels will remain the same as they were for the 2018–2020 period. In addition, the FHFA has released an advance notice of proposed rulemaking (ANPR) seeking public input on issues that the FHFA may address in future housing goals rulemaking. Written comments on the ANPR must be received by Feb. 28, 2021.

To meet a single-family housing goal or subgoal, the percentage of mortgage purchases by an Enterprise that meets each goal or subgoal must exceed either the benchmark level set in advance by the FHFA or the market level for that year. The market level is determined retrospectively each year, based on the actual goal-qualifying share of the overall market as measured by the FHFA based on Home Mortgage Disclosure Act (HMDA) data for that year. Similarly, to meet a multifamily housing goal or subgoal, an Enterprise must purchase mortgages on multifamily properties (properties with five or more units) "with rental units affordable to families in each category, as well as a subgoal for properties with 5-50 units." Further, the FHFA measures Enterprise multifamily goals performance against benchmark levels set by the agency.

2021 goals. In keeping with the Federal Housing Enterprises Financial Safety and Soundness Act, the FHFA’s final rule on 2021 Enterprise Housing Goals (12 CFR Part 1282) includes separate categories for single-family and multifamily mortgages on housing that is "affordable to low-income and very low-income families," among other categories.

In connection with 2021 single-family housing goals, the FHFA has set the following benchmarks:

  • the Low-Income Home Purchase Goal is 24 percent;
  • the Very Low-Income Home Purchase Goal is 6 percent;
  • the Low-Income Areas Home Purchase Subgoal is 14 percent; and
  • the Low-Income Refinancing Goal is 21 percent.

Likewise, in connection with 2021 multifamily housing goals, the FHFA has set the following benchmarks:

  • the Low-Income Goal is 315,000 units;
  • the Very Low-Income Subgoal is 60,000 units; and
  • the Low-Income Small Multifamily Subgoal is 10,000 units

ANPR. When eventually promulgated, the FHFA’s proposed rulemaking would amend 12 CFR Part 1282 (Enterprise Housing Goals and Mission). In seeking feedback from its ANPR, the FHFA is particularly interested in receiving public comments concerning four sets of questions:

  1. Are there categories of loans that should be excluded from receiving housing goals credit under the Federal Housing Enterprises Financial Safety and Soundness Act provisions on "unacceptable business and lending practices"?
  2. Are there ways to determine whether the low-income areas home purchase subgoal has resulted in the displacement of residents from certain communities, or to measure the extent of any such displacement? Should the FHFA consider modifying the low-income areas home purchase subgoal to address these concerns? If so, how?
  3. Should the FHFA revise the low-income areas home purchase subgoal to consider loans on properties located in Opportunity Zones, and if so, how should these loans be treated?
  4. Is there evidence that the Enterprise housing goals have helped expand low-income homeownership in the marketplace?

Companies: Fannie Mae; Freddie Mac

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