FHFA Issues Proposed Rule on Federal Home Loan Bank Housing Goals

The Federal Housing Finance Agency yesterday proposed amendments to existing regulations for Federal Home Loan Bank housing goals.

The proposed rule (https://www.fhfa.gov/SupervisionRegulation/Rules/Pages/Federal-Home-Loan-Bank-Housing-Goals-Amendments.aspx) would:

–Set a single prospective mortgage purchase housing goal as a share of each FHLBank’s total Acquired Member Asset purchases;

–Set a new small member participation housing goal for participation by small institutions;

–Eliminate the volume threshold and instead allow FHLBanks to propose different goals levels for mortgage purchases and small member participation, subject to FHFA approval; and

–Simplify and expand the eligibility criteria to enable federally backed loans to count for goals purposes.

FHLBank participation in the AMA program is voluntary.

FHFA issued a final rule in December 2010 that subjects an FHLBank to the housing goals if in a given year a FHLBank’s AMA purchases exceed a volume threshold of $2.5 billion. When triggered, existing housing goals compare FHLBank performance to market levels.

“To be successful housing goals should lead the FHLBanks to make affordable housing part of their business plans for AMA,” said FHFA Director Melvin Watt. “The overall approach of the proposed amendments will encourage FHLBanks and their members to build on the strengths of the AMA program to assist targeted borrower groups in a safe and sustainable manner.”

The proposed rule is available for public comment for 90 days of publication in the Federal Register. FHFA will also hold a webinar on the proposed rule on Nov. 8 at 2:00 p.m. ET to explain the proposed rule and answer questions; more information is available at http://ems8.intellor.com/?do=register&t=1&p=809727.