The Federal Housing Finance Agency (FHFA) issued a proposed rule today that would establish the housing goals for 2025-2027 that Fannie Mae and Freddie Mac (the Enterprises) 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 Enterprises, 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 an Enterprise fails to meet a feasible housing goal, FHFA may require the Enterprise to 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 Enterprise’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 Enterprises must meet the benchmark level established in the rule. Each Enterprise 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 (5-50 units) multifamily properties.
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.
Single-Family Housing Goals:
| Proposed Single-Family Goals (percentage of overall qualified single-family loan purchases) | |
|---|---|
| Single-Family Goals | Proposed Benchmark Level 2025-2027 |
| Low-Income Home Purchase Goal | 25% |
| Very Low-Income Home Purchase Goal | 6% |
| Minority Census Tracts Home Purchase Subgoal | 12% |
| Low-Income Census Tracts Home Purchase Subgoal | 4% |
| Low-Income Refinance Goal | 26% |
Multifamily Housing Goals:
| Proposed Multifamily Goals (percentage of overall qualified units) | |
|---|---|
| Multifamily Goals | Proposed Benchmark Level 2025-2027 |
| Low-Income Goal | 61% |
| Very Low-Income Goal | 14% |
| Low-Income Small (5-50 units) Multifamily Subgoal | 2% |
FHFA invites comments on the proposed rule within 60 days of publication in the Federal Register.