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Financial Services Law Insights and Observations

FHFA proposes new GSE housing goals

Federal Issues FHFA GSE Fannie Mae Freddie Mac Fair Lending Mortgages

Federal Issues

On August 18, FHFA proposed new housing goals for Fannie Mae and Freddie Mac (GSEs) for 2022 to 2024, which are intended to ensure the reasonable promotion of “equitable access to affordable housing that reaches low- and moderate-income families, minority communities, rural areas, and other underserved populations.” Specifically, FHFA proposes two new single-family home purchase subgoals, which will replace the current low-income areas subgoal. The first new subgoal targets minority communities to improve access to fair and sustainable mortgage financing in communities of color. According to FHFA’s announcement, mortgages will qualify under this subgoal if (i) “the borrower has an income at or below area median income (AMI)”; and (ii) “the property is in a census tract where the median income is below AMI and minorities make up at least 30 percent of the population.” Under the proposed rule, the first new subgoal would establish a benchmark level of 10 percent for GSE purchases of mortgage loans on properties in minority census tracts “made to borrowers with incomes no greater than 100 percent of AMI.” The second new subgoal targets low-income neighborhoods and would establish a benchmark level of 4 percent for GSE purchases of “mortgage loans on properties in low-income census tracts that are not minority census tracts,” in addition to “mortgage loans on properties in low-income census tracts that are minority census tracts, made to families with incomes greater than 100 percent of AMI.” Acting Director Sandra L. Thompson noted that the GSEs’ “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.”

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