NCSHA Submits Comments on FHFA Proposed Duty to Serve Rule
NCSHA recently submitted a letter to the Federal Housing Finance Agency (FHFA) commenting on its proposed Enterprise Duty to Serve Underserved Markets rule. FHFA’s proposal, which was released in December, would require the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac to develop and implement plans to serve lower income families through activities related to manufactured housing, rural areas, and preservation. Congress mandated that the GSEs support such activities in the Housing and Economic Recovery Act of 2008. NCSHA previously summarized the proposed rule on its blog.
In its comments, NCSHA expresses strong support for a provision in the proposed rule that would allow the GSEs to receive credit towards meeting their “Duty to Serve” obligations for purchasing or guaranteeing HFA-issued Housing Bonds. NCSHA urges FHFA to implement this provision in a flexible manner that will allow the GSEs to receive credit for all Housing Bond investments. While the GSEs’ Senior Preferred Stockholder Agreements with the U.S. Department of Treasury currently prohibit the GSEs from purchasing Housing Bonds, NCSHA hopes that Treasury will consider lifting the restriction in light of the Duty to Serve provision and the GSEs’ improved financial health.
NCSHA also urges FHFA to allow the GSEs to resume making Low Income Housing Tax Credit (Tax Credit) investments. FHFA currently prohibits the GSEs from making such investments. The proposed rule sought public comment about whether this restriction should be rescinded, noting that the Housing Credit is a valuable tool for supporting affordable housing and also represents a liquid investment. Allowing the GSEs to resume Housing Credit investments, NCSHA argues, will help boost liquidity in the Housing Credit market and increase the amount of equity available for developments in underserved markets.
NCSHA also asks FHFA to:
• Require that the GSEs file Underserved Market Plans detailing how they intend to fulfill their Duty to Serve obligations and solicit public input on the plans;
• Award the GSEs credit for supporting affordable manufactured housing loans and loans for manufactured housing communities owned by state and local governments or nonprofit organizations; and
• Encourage the GSEs to work together with state HFAs to identify state affordable housing programs that could benefit from GSE support.
Please contact NCSHA’s Greg Zagorski with questions or comments.