The Federal Housing Finance Agency (FHFA), the regulating agency of Fannie Mae and Freddie Mac, proposed a rule Aug. 29 that would establish housing goals for Fannie and Freddie for 2015-17.
FHFA is requesting comment on all aspects of the proposed rule. The Housing and Economic Recovery Act of 2008 requires FHFA to establish annual housing goals for Fannie and Freddie, and FHFA’s current housing goals rule is effective through the end of 2014.
Single-family housing goals
FHFA is requesting comment on three alternative approaches for establishing the single-family housing goals for 2015-17: ​
- Alternative (1) – Use the current two-step process, which involves setting both a prospective benchmark level and a retrospective market level measure based on Home Mortgage Disclosure Act data;
- Alternative (2) – Set only prospective benchmark levels; and
- Alternative (3) – Use only the retrospective market level measure.
FHFA has proposed single-family benchmark levels for 2015-17 that the agency would consider adopting under Alternative (1).
FHFA’s proposal would keep the benchmarks for purchase goals at current levels for low and very low-income families (23 percent of overall single-family purchases and 7 percent, respectively) to encourage Fannie Mae and Freddie Mac to promote safe and sound lending to lower-income borrowers.​
The low-income areas home purchase subgoal was increased from 11 percent in 2014 up to 14 percent in 2015-17. The low-income families refinance goal increased from 20 percent in 2014 to 27 percent in 2015-17.
If FHFA were to adopt Alternative (2), the agency would consider adopting single-family benchmark levels in the final rule that are lower than the proposed levels. Alternative (3) would not involve setting a prospective benchmark level.
Multifamily housing goals
The proposed rule also includes benchmark levels for multifamily housing goals and, for the first time, would establish a subgoal for small multifamily properties (5-50 units) affordable to low-income families.
FHFA’s proposed multifamily benchmark levels would be the same for Fannie Mae and gradually would increase for Freddie Mac: Fannie’s goal for multifamily units for low-income families would remain at 250,000, and its goal for very low-income families would remain at 60,000 from 2014-17. Freddie’s multifamily goal for low-income families increases by 10,000 units per year (from 200,000 in 2014 to 230,000 in 2017), and its goal for multifamily units for very low-income families increases slightly per year (from 40,000 in 2014 to 50,000 in 2017).
These levels would require Fannie and Freddie to continue to support affordable multifamily housing despite the expectation that the government sponsored enterprises’ overall multifamily market share will continue to decline in the coming years because of increased participation by the private sector in the multifamily market.
FHFA also is requesting comment on whether multifamily housing goals credit should be allowed for blanket loans on manufactured housing communities.