FHFA Proposes Future Housing Goals for the Agencies

To promote equitable access to affordable housing that reaches low- and moderate-income families, minority communities, rural areas and other underserved populations, the Federal Housing Finance Agency has proposed new housing goals​ for Fannie Mae and Freddie Mac for 2022 to 2024.

FHFA is proposing two new single-family home loan purchase subgoals for Fannie and Freddie—one to target minority communities and one to target low-income neighborhoods. These subgoals would replace the existing low-income areas subgoal. FHA says the new minority census tract subgoal is designed to improve access to fair and sustainable mortgage financing in communities of color. 

For a mortgage to qualify under the subgoal, a borrower must have an income at or below area median income (AMI). The property must be in a census tract where the median income is below AMI and minorities make up at least 30% of the population.

To meet these goals, Fannie and Freddie’s mortgage purchases must exceed the benchmark level set in advance by FHFA or the market level for that year, which is determined each year retrospectively. FHFA determines that market level by measuring Home Mortgage Disclosure Act data showing the actual goal-qualifying share of the overall market.

“The new subgoal for minority census tracts was designed to help preserve and support affordable housing in communities of color. The subgoal benefits families at or below area median income, allowing them to stay in the communities they helped build,” said FHFA Acting Director Sandra L. Thompson in a prepared statement. “The Enterprises’ housing goals over the next three years should support equitable access to sustainable affordable housing opportunities in a safe and sound manner that bolsters the health of communities.”

Thompson replaced Mark Calabria at FHFA in June. At the time, Evan Blau, chair of the Agency Lending and Affordable Housing practice at Cassin & Cassin LLP, said the Biden Administration would focus on affordable housing, homeownership opportunities and mission-oriented transactions with less focus on whether they remain in conservatorship.

“While we have seen key personnel changes in Fannie Mae and Freddie Mac in the last 12 months, I do not foresee structural changes,” Blau said in an earlier interview with GlobeSt.com. “Fannie Mae and Freddie Mac have always proved to be resilient and their stabilizing effect in the national housing market during the pandemic are Exhibit A of their importance on a going-forward basis.”