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FHFA Requests Input on GSE Proposed Duty to Serve Plan Modifications
The Federal Housing Finance Agency requested public input as part of the Agency’s consideration of proposed modifications to Fannie Mae and Freddie Mac’s 2018-2020 Underserved Markets Plans under the Duty to Serve program.
The Duty to Serve regulation allows Fannie Mae and Freddie Mac to request to modify their Plan at any time; however, FHFA must provide a non-objection to a proposed modification for them to become part of an Enterprise’s Plan.
FHFA issued a final rule in December 2016 (https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Issues-Final-Rule-on-Fannie-Mae-and-Freddie-Mac-Duty-to-Serve-Underserved-Markets.aspx) to implement the Duty to Serve provisions mandated by the Housing and Economic Recovery Act of 2008. The statute requires Fannie Mae and Freddie Mac to serve three specified underserved markets–manufactured housing, affordable housing preservation and rural housing–by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for mortgage financing for very low-, low- and moderate-income families in these markets.
Fannie Mae has submitted 22 proposed modifications to the content of its plan; Freddie Mac has submitted one modification. FHFA has determined that public input would be helpful in considering four of Fannie Mae’s modifications.
The Mortgage Bankers Association has long-supported the GSEs’ Duty to Serve obligations as part of efforts to improve liquidity in secondary markets for affordable housing preservation, manufactured housing and rural housing. MBA has urged the GSEs to engage with the full spectrum of secondary market participants–including single-family and multifamily lenders of all sizes and business models, servicers and investors–to ensure that the implementation of the Plans remains aligned with market demand.
The FHFA RFI can be found at https://www.fhfa.gov/PolicyProgramsResearch/Programs/Documents/ModificationsRFI.pdf.