New FHFA Rule Requires Fannie Mae and Freddie Mac to Submit Underserved Markets Plan
FHFA published a final rule in the December 18 Federal Register implementing certain “Duty to Serve” provisions of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008. Among other things, these provisions require that Fannie Mae and Freddie Mac adopt formal plans to improve the availability of mortgage financing in a “safe and sound manner” for residential properties that serve “very low-, low-, and moderate-income families” in three specified underserved markets: manufactured housing, affordable housing preservation, and rural markets. FHFA’s new rule addresses this obligation by requiring both Fannie Mae and Freddie Mac to submit to FHFA a three-year “Underserved Markets Plan” that describes the activities and objectives they will undertake to meet their Duty to Serve requirements. The Plans will become effective January 2018, after which time, the new rule requires further that FHFA annually evaluate, rate, and report to Congress each Enterprise's compliance with its Duty to Serve obligations as required by the statute.