Federal Housing Finance Agency (FHFA) is seeking public comment on a set of
preliminary affordable housing goals for the two government sponsored
enterprises (GSEs) Fannie Mae and Freddie Mac for the next three years. There is a single set of single family
financing goals for both GSEs and separate goals for each covering multifamily
units. FHFA is required by the Housing and Economic Recovery Act of 2008 to establish these
annual housing goals for the GSEs.
The agency is also proposing three
alternative approaches for establishing single family housing goals. Alternative 1, would 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 would set only
prospective benchmark levels and Alternative 3 would use only the retrospective
market level measure.
Using Alternative 1, the goal for
both Freddie Mac and Fannie for single family purchase mortgages to low income
families is proposed to remain at the 2014 level of 23 percent of overall
purchases over the 2015 through 2017 period.
The 2014 goal of 7 percent for purchases by very-low income families
will be unchanged for the next three years as well. FHFA is leaving these goals at present levels
to encourage Fannie Mae and Freddie Mac to promote safe and sound lending to
A sub goal for purchases within low
income areas will increase from the current 11 percent to 14 percent for 2015,
2016, and 2017. The most significant
proposed change is for the percentage of all refinancing targeted for low
income families. This may rise from the current
goal of 20 percent to 27 percent for the next three years.
If FHFA were to adopt Alternative 2
the agency would consider using 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.
FHFA is proposing for the first time
to establish a sub goal for small multifamily properties (5-50 units)
affordable to low-income families. Under this sub goal Fannie Mae would provide
financing for 20,000 affordable units in 2015, 25,000 in 2016, and 30,000 in
2017. The goals for the three years for
Freddie Mac would be 5,000, 10,000 and 15,000 respectively.
FHFA's proposed multifamily
benchmark levels for Fannie Mae would remain at the current 250,000 units for
low income families and 60,000 for very low-income families. For Freddie Mac the low-income goal would rise
from the current 200,000 units to 210,000 in 2015 and by 10,000 units in each
of the subsequent two years. For
very-low-income families the current 40,000 units goal would increase to 43,000
in 2015, 46,000 units in 2016, and finally 50,000 units in 2017.
The proposed levels would require
the GSEs to continue to support affordable multifamily housing despite the
expectation that their overall multifamily market share will continue to
decline in the coming years as the private sector becomes more involved in the
FHFA is requesting comment on all
aspects of the proposed rule including the alternative approaches and is also requesting
comment on whether multifamily housing goals credit should be allowed for
blanket loans on manufactured housing communities. Comments should be
made to FHFA (www.fhfa.gov) no later than
October 28, 2014.