Fannie Mae, Freddie Mac Submit ‘Duty to Serve’ Protocols; FHFA Extends Comment Period

Fannie Mae and Freddie Mac yesterday submitted their Duty to Serve Underserved Markets Plan to the Federal Housing Finance Agency for public comment.

Also yesterday, FHFA announced ( it would extend the public comment period for its proposed Evaluation Guidance for the government-sponsored enterprises’ Duty to Serve program to June 7 (the previous deadline had been May 15).

The Housing and Economic Recovery Act of 2008 established a duty for 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 those markets. Under the Duty to Serve regulation, each Enterprise was required to prepare an Underserved Markets Plan describing specific activities and objectives it will undertake to fulfill its Duty to Serve obligations in each underserved market over a three-year period.

Fannie Mae’s DTS Underserved Markets Plan ( said public input can be provided on the FHFA website through July 10.

“Fannie Mae welcomes the opportunity to create housing opportunities that are affordable and we are prepared to bring all our experience, knowledge, and capabilities to bear in fulfilling our Duty to Serve,” said Jeffery Hayward, Executive Vice President and Head of Multifamily with Fannie Mae. “We recognize that there are no easy solutions to the tough and often long-standing challenges that characterize underserved markets. It will take research, education and innovative partnerships to make housing more affordable in all markets. We are excited that the Duty to Serve rule aligns with our mission to increase access to mortgage credit and housing options for all Americans as we find new ways and new partners to support underserved markets that need help.”

Freddie Mac ( said supporting affordable housing and access to credit is an integral part of Freddie Mac’s mission. “Duty to Serve presents a welcome opportunity to lead the mortgage industry and help more American families with their housing needs,” said Danny Gardner, Freddie Mac vice president of affordable lending and access to credit. “Our plan includes increased loan purchases in these underserved markets, new offerings, market research, increased homebuyer education, community engagement and local outreach. We intend to work with our customers and the many dedicated organizations that are deeply knowledgeable about these markets at the local, regional and national levels.”

In its recently released white paper on reforming Fannie Mae, Freddie Mac and the secondary mortgage market, GSE Reform: Creating a Sustainable, More Vibrant, Secondary Mortgage Market (, the Mortgage Bankers Association said the GSEs’ affordable housing obligations were a critical element of creating stability. MBA’s proposal includes a guarantor model that advances an affordable housing strategy.

MBA President and CEO David Stevens, CMB, said the MBA paper honors a request from Senate Banking Committee Chairman Mike Crapo, R-Idaho, to incorporate a solution for the GSEs’ affordable housing mandate. “We had to make certain any new model had to have a commitment to preserve and provide affordable housing,” he said. “The new guarantor model provides for that commitment, both financially and also fiducially. We also talk about the plumbing–what parts are private; what parts are public and how we achieve that with the greatest transparency for lenders, consumers and regulators.”

FHFA notes four major sequential steps involved in implementing the Duty to Serve regulation: (1) publication of the Guidance by FHFA; (2) preparation of Plans by the Enterprises; (3) implementation by the Enterprises of the activities and objectives described in their Plans; and (4) FHFA annual evaluation of the Enterprises’ performance under their Plans.

Should FHFA approve the GSEs’ Duty to Serve proposals–it has until Dec. 1 to do so–the plans will go into effect on Jan. 1.