In accordance with the Housing and Economic Recovery Act of 2008, the Federal Housing Finance Agency (FHFA) announced on August 29 that it has proposed a rule to establish new housing goals for 2015 through 2017 for Fannie Mae and Freddie Mac.
The FHFA is required by the Housing and Economic Recovery Act to establish new housing goals annually for the GSEs, and the current rule expires at the end of 2014.
For single-family housing goals for 2015 through 2017, FHFA requests comment on three alternative approaches. The first alternative involves using Home Mortgage Disclosure Act data to calculate both a prospective benchmark level and a retrospective market measure; the second alternative involves setting only benchmark levels; and the third involves setting only the retrospective market level measure.
Under the first alternative, prospective benchmarks for the percentage of all single-family purchases would remain at their current levels of 23 percent for low-income families and 7 percent for very low-income families for 2015 through 2017, encouraging the GSEs to promote more "safe and sound lending" to low-income borrowers, according to FHFA. Under the second alternative, single-family benchmark levels would be lower than the levels that have been proposed; and under the third alternative, prospective benchmark levels would not be set.
For multifamily housing, a subgoal would be established in an effort to make it easier for low-income families to afford smaller properties (those with five to 50 units). Under the proposed rule, Fannie Mae's benchmark levels for the number of multifamily housing units will remain at their current levels of 250,000 units for low-income families and at 60,000 for very low-income families through 2017. For Freddie Mac, benchmark levels for low-income families would move upward from the current number of 200,000 units up to 210,000 for 2015; 220,000 for 2016; and 230,000 for 2017. For very low-income families, those levels would increase from their current level of 40,000 up to 43,000 for 2015; 46,000 for 2016; and 60,000 for 2017. The benchmark levels proposed by FHFA would require the GSEs to continue supporting affordable multifamily housing even though market share in multifamily housing will decrease for the GSEs due to the private sector's increased participation in multifamily housing.
FHFA is inviting interested parties to comment within 60 days but not after October 28, 2014. Visit www.fhfa.gov to find out how to comment.