Stakeholder comments requested for proposed goals which establish benchmarks, promote equitable access to affordable housing
Today, the Federal Housing Finance Agency (FHFA) proposed housing goals for Fannie Mae and Freddie Mac (the Enterprises) for 2022 to 2024. The proposed housing goals are designed to ensure the Enterprises responsibly promote equitable access to affordable housing that reaches low- and moderate-income families, minority communities, rural areas, and other underserved populations.
This year, FHFA is proposing two new single-family home purchase subgoals to replace the existing low-income areas subgoal. One new subgoal targets minority communities; the other continues to target low-income neighborhoods.
The new minority census tract subgoal is designed to improve access to fair and sustainable mortgage financing in communities of color. A mortgage qualifies under the new subgoal if:
- the borrower has an income at or below area median income (AMI); and
- the property is in a census tract [1] where the median income is below AMI and minorities make up at least 30 percent of the population.
“The new subgoal for minority census tracts was designed to help preserve and support affordable housing in communities of color. The subgoal benefits families at or below area median income, allowing them to stay in the communities they helped build,” said FHFA Acting Director Sandra L. Thompson. “The Enterprises’ housing goals over the next three years should support equitable access to sustainable affordable housing opportunities in a safe and sound manner that bolsters the health of communities.”
Single-Family Housing Goals:
| Current and Proposed Single-Family Goals (percentage of overall qualified single-family purchases) | ||
|---|---|---|
| Single-Family Goals | Current Benchmark Level 2018-2021 | Proposed Benchmark Level2022-2024 |
| Low-Income Home Purchase Goal | 24% | 28% |
| Very Low-Income Home Purchase Goal | 6% | 7% |
| Minority Census Tracts Home Purchase Subgoal (New) | 10% | |
| Low-Income Census Tracts Home Purchase Subgoal (New) | | 4% |
| Low-Income Refinance Goal | 21% | 26% |
To meet a single-family housing goal or subgoal, the percentage of mortgage purchases by an Enterprise in that category must exceed either the benchmark level set in advance by FHFA or the market level for that year. The market level is determined retrospectively each year, based Home Mortgage Disclosure Act (HMDA) data showing the actual goal-qualifying share of the overall market, as measured by FHFA.
Multifamily Housing Goals:
| Current and Proposed Multifamily Goals (number of multifamily units) | ||
|---|---|---|
| Multifamily Goals | Current Level 2018-2021 | Proposed Level2022-2024 |
| Low-Income Goal | 315,000 | 415,000 |
| Very Low-Income Subgoal | 60,000 | 88,000 |
| Small Multifamily (5-50 Units) Low-Income Subgoal | 10,000 | 23,000 |
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. FHFA measures Enterprise multifamily goals performance against benchmark levels set in advance.
While the Enterprises remain in conservatorship, they continue to have the mission of supporting a stable and liquid national market for residential mortgage financing. FHFA has continued to establish annual housing goals for the Enterprises and to assess their performance under the housing goals each year during conservatorship.
Interested parties are invited to submit comments on this proposed rule within 60 days of publication in the Federal Register. Comments should be submitted to the Federal Housing Finance Agency, Division of Housing Mission and Goals, 400 7th Street, S.W., Washington, DC 20219 or via FHFA.gov.
[1] As defined by the Enterprise housing goals statute, minority census tracts are census tracts with minority population of at least 30 percent and a tract median income of less than 100 percent of area median income (AMI).