FHFA Proposes 2015-2017 Affordable Housing Goals for Fannie Mae and Freddie Mac
On August 29, the Federal Housing Finance Agency (FHFA) published proposed affordable housing goals for Fannie Mae and Freddie Mac for 2015-2017. The current annual affordable housing goals, required under the Housing and Economic Recovery Act of 2008, are effective through the end of 2014.
FHFA’s proposed single-family housing goals are the same as the current goals in two of the four activity areas for which FHFA sets goals—the low-income families home purchase goal and the very-low income families home purchase goal. These goals are benchmarks for the percentage of loans that Fannie Mae and Freddie Mac each help finance for home purchases by families with incomes at or below 80 percent of area median income (AMI) and 50 percent of AMI, respectively.
FHFA proposes to increase the goal for the percentage of loans used to purchase homes in low-income areas to 14 percent from 11 percent. This benchmark is set annually, so it could be adjusted further in 2016 and 2017.
Finally, FHFA proposes to require that at least 27 percent of the refinance loans purchased by Fannie Mae and Freddie Mac each would have to help low-income families, up from 20 percent in 2014.
The chart below shows the proposed goals and how they compare to the current goals.
FHFA proposes to require Freddie Mac to meet higher goals for the number of multifamily units it finances that are affordable to low-income and very low-income families, and proposes no change in Fannie Mae’s multifamily goals. For Freddie Mac, the low-income multifamily goals would increase from 200,000 units in 2014 to 210,000 units for 2015, 220,000 for 2016, and 230,000 for 2017. Freddie Mac’s very-low income multifamily goals would increase from 40,000 units to 43,000 units in 2015, 46,000 in 2016, and 50,000 in 2017. Fannie Mae’s annual low-income multifamily goal would remain 250,000 units and its annual very low-income multifamily goal would remain 60,000 units.
FHFA’s proposal also recommends establishing, for the first time, a sub-goal for small multifamily properties (5-50 units) affordable to low-income families. FHFA proposes to require Fannie Mae to finance at least 20,000 small multifamily property units in 2015, 25,000 in 2016, and 30,000 in 2017. FHFA proposes to require Freddie Mac to finance at least 5,000 small multifamily property units in 2015, 10,000 in 2016, and 15,000 in 2017.
The charts below shows the proposed multifamily goals and how they compare to the current goals.
The deadline to respond to FHFA’s proposal is October 28, 2014. NCSHA plans to submit comments. To help shape NCSHA’s response, please review the proposed goals and submit comments to NCSHA’s Greg Zagorski no later than Friday, October 10.