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FHFA Adopts Final Rule on 2015-2017 Housing Goals for Fannie Mae and Freddie Mac
Washington, D.C. – The Federal Housing Finance Agency (FHFA) has adopted a final rule establishing single-family and multifamily housing goals for Fannie Mae and Freddie Mac (the Enterprises) for 2015 through 2017. The final rule was adopted after FHFA considered more than 144 comments on a proposed housing goals rule issued in August 2014. The final rule will become effective 30 days after publication in the Federal Register. The Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008, requires FHFA to establish annual housing goals for mortgages purchased by the Enterprises.
The final rule sets identical benchmarks for both Enterprises in all categories and establishes goals for the first time, for rental units affordable to low-income families in small (5- to 50-unit) multifamily properties.
“The single-family goals advance the Enterprises’ statutory missions to provide access to credit for creditworthy borrowers and provide liquidity to the U.S. housing market while operating in a safe and sound manner,” said FHFA Director Melvin L. Watt. “The multifamily goals will create rental opportunities for those who need affordable housing. Together, these goals establish a solid foundation for affordable and sustainable homeownership and rental opportunities in this country.”
Single-Family Housing Goals
FHFA’s final rule continues to use a dual-comparison approach for the single-family goals under which the Enterprises must meet either a benchmark level or a retrospective level to meet the goals. The final rule establishes the following goals for single-family properties:
Single-family low-income home purchase goal at 24 percent for each of the three years 2015-2017, an increase from the proposed benchmark of 23 percent for each year and an increase of one percentage point from 2014 benchmark goal of 23 percent;
Single-family very low-income home purchase subgoal at six percent for each of the three years 2015-2017, a decrease from seven percent in the proposed rule and a decrease of one percentage point from the 2014 benchmark goal of seven percent;
Single-family low-income areas home purchase subgoal at 14 percent for each of the three years 2015-2017, which is the same as the proposed rule and an increase of three percentage points from the 2014 benchmark goal of 11 percent;
Single-family low-income refinance goal at 21 percent for each of the three years 2015-2017, a decrease from 27 percent in the proposed rule but an increase of one percentage point from the 2014 benchmark goal of 20 percent.
Multifamily Housing Goals
FHFA’s final rule establishes the following goals for multifamily properties:
Multifamily low-income goal for both Enterprises at 300,000 units for each of the three years 2015-2017, up from the proposed 250,000 units each year for Fannie Mae and up from the 210,000, 220,000 and 230,000 units proposed for Freddie Mac in the three years. This goal represents an increase of 50,000 units for Fannie Mae and 100,000 for Freddie Mac from the 2014 benchmark;
Very low-income multifamily housing subgoal for Fannie Mae at 60,000 units for each of the three years 2015-2017, the same as the proposed 60,000 units for each of the three years. Freddie Mac’s very low-income subgoal levels are also set at 60,000 units for each of the three years, up from the proposed goals of 43,000 units, 46,000 units and 50,000 units, respectively, and an increase of 20,000 for Freddie Mac from the 2014 benchmark;
Establish a new low-income housing subgoal for Enterprise purchases of mortgages on small (5- to 50-unit) multifamily properties. Fannie Mae’s goal is 6,000 units in 2015, 8,000 units in 2016 and 10,000 units in 2017, down from the proposed goals of 20,000 units, 25,000 units and 30,000 units, respectively. Freddie Mac’s goal is also 6,000 units in 2015, 8,000 units in 2016 and 10,000 units in 2017, up from the proposed goals of 5,000 in 2015, and down from the proposed goals of 10,000 units in 2016 and 15,000 in 2017.