FHFA Finalizes 2018-2020 Housing Goals For Fannie Mae, Freddie Mac

The Federal Housing Finance Agency yesterday published a final rule that establishes new housing goals for Fannie Mae and Freddie Mac for 2018 through 2020.

The final rule (https://www.fhfa.gov/SupervisionRegulation/Rules/Pages/2018-2020-Enteprise-Housing-Goals.aspx) establishes single-family and multifamily housing goals in accordance with the provisions of the Housing and Economic Recovery Act of 2008.

For single-family housing, goals remain unchanged. As a percentage of overall qualified single-family purchases, FHFA commits Fannie Mae and Freddie Mac to a benchmark level of 24 percent for low-income home purchases; 6 percent for very low-income home purchases; 14 percent for low-income areas home purchase subgoal; and 21 percent for overall low-income refinancings.

To meet a single-family housing goal or subgoal, the percentage of mortgage purchases by an Enterprise that meets each goal or subgoal must exceed either the benchmark level set in advance by FHFA or the market level for that year. The market level is determined retrospectively each year, based on the actual goal-qualifying share of the overall market as measured by FHFA based on Home Mortgage Disclosure Act data for that year.

Multifamily housing goals have changed a bit. FHFA established a low-income goal of 315,000 units for 2018-2020, up from 300,000 for the previous benchmark level period (2015-2017). The very low-income subgoal is 60,000 units, unchanged from 2015-2017. The Small Multifamily low-income subgoal is 10,000 units, unchanged from 2017 but up from 8,000 in 2016 and 6,000 in 2015.

To meet a multifamily housing goal or subgoal, an Enterprise must purchase mortgages on multifamily properties (properties with five or more units) with rental units affordable to families in each category, as well as a subgoal for properties with 5-50 units. FHFA measures Enterprise multifamily goals performance against benchmark levels set by FHFA.