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FHFA Seeks Input on Fannie’s Underserved Markets Plans

The Federal Housing Finance Agency [1] (FHFA) called for public inputs to planned modifications of the Underserved Market Plan of Fannie Mae [2] under their Duty to Serve regulation.

This regulation allows the GSEs to request to modify their Plans at any time. FHFA must provide a non-objection to a proposed modification for them to become part of the GSE's Plan. While both, Fannie Mae and Freddie Mac [3] have proposed modifications in their respective plans, the FHFA is seeking public input while considering four of Fannie Mae's 22 proposed modifications each of which would make a substantial change to the content of its Underserved Market Plan.

According to the FHFA, the one modification submitted by Freddie Mac is a modest correction and as a result, the conservator will not seek public input on that proposal.

Of the 22 modifications submitted by Fannie Mae, the FHFA is seeking public input on four modifications related to purchase or rehabilitation of certain distressed properties, chattel loans, investment in LIHTC properties, and financing by small financial institutions.

The government-sponsored enterprises (GSEs) are required to serve three specified underserved markets under this plan–manufactured housing, affordable housing preservation, and rural housing–in a safe and sound manner by increasing liquidity for mortgage investments and improving the distribution of investment capital available for residential financing for very low-, low-, and moderate-income families in those markets.

One of the key areas where FHFA is seeking public feedback is in the area of the review process of Fannie Mae's plan that was established in accordance with Chapter 1 of FHFA's DTS Evaluation Guidance. The conservator said that the review process was intended to enable the GSE and FHFA to apply lessons learned and improve the plans in an expeditious manner while providing transparency to the public about substantial changes to these plans.

The FHFA has said that it would accept public input no later than November 2, 2018 and submissions could either be emailed to FHFA here [4] with the notation "Plan Modifications RFI" in the subject line; Submitted to the DTI webpage that can be accessed here [5]; or addressed to FHFA Division of Housing Mission and Goals.