The Federal Housing Finance Agency (FHFA) proposed its 2021 housing goals for Fannie Mae and Freddie Mac.
A release states that due to economic uncertainty related to COVID-19, the FHFA is proposing benchmarks for 2021 only and they will remain the same as they were for 2018-2020.
The proposed benchmark levels would extend those currently set to expire on December 31, 2020.
The FHFA’s proposed benchmarks for 2021 are as follows:
- Low-Income Home Purchase Goal: 24%
- Very Low-Income Home Purchase Goal: 6%
- Low-Income Areas Home Purchase Subgoal: 14%
- Low-Income Refinancing Goal: 21%
“To meet a single-family housing goal or subgoal, the percentage of mortgage purchases by an Enterprise that meets each goal or subgoal must exceed either the benchmark level set in advance by FHFA or the market level for that year. The market level is determined retrospectively each year, based on the actual goal-qualifying share of the overall market as measured by FHFA based on Home Mortgage Disclosure Act (HMDA) data for that year,” the FHFA said.
The FHFA added that it will conduct a new round of notice and comment rulemaking for new benchmark levels for 2022 and beyond.
The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act) require the FHFA to establish annual housing goals for both single-family and multifamily mortgages purchases by the GSEs.
Additionally, the annual housing goals are “one measure to the extent” of Fannie Mae and Freddie Mac meeting their public purposes. This includes, “an affirmative obligation to facilitate the financing of affordable housing for low- and moderate-income families in a manner consistent with their overall public purposes, while maintaining a strong financial condition and a reasonable economic return.”
“In order to meet a single-family housing goal, the percentage of mortgage purchases by an Enterprise that meets each goal must equal or exceed either the benchmark level or the market level for that year,” the FHFA said.