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GSEs Further Advancing the Pursuit of Affordable Housing

The Federal Housing Finance Agency (FHFA) has announced the release of its inaugural Mission Report, “2021 Mission Report: Affordable Housing Activities of the Regulated Entities,” that describes the activities of Fannie Mae and Freddie Mac (the GSEs) and the Federal Home Loan Banks (FHLBanks) in 2021 to provide greater access to financing for targeted economic development and affordable, equitable, and sustainable housing.

“FHFA is committed to promoting affordability, equity, and sustainability in the nation's housing finance markets," said FHFA Acting Director Sandra L. Thompson. “Our regulated entities have made progress in many mission-driven areas, and we will continue to improve affordable housing opportunities to support homeowners and renters."

Highlights from the 2021 Mission Report include:

  • The GSEs acquired more than 360,000 homeownership loans through their affordable housing programs, with 62% of these acquisitions to first-time homebuyers.
  • The GSEs acquired nearly $140 billion in multifamily loans (totaling more than 1.3 million units), with 57% of those loan acquisitions qualified as mission-driven affordable housing loans under Appendix A of the Conservatorship Scorecard.
  • The GSEs acquired more than 110,000 DTS single-family loans. Of those loans, more than 20,000 were affordable to very low-income borrowers. More than 70% of DTS loans acquired were in the rural housing market.
  • The GSEs purchased loans on nearly 156,000 Duty to Serve Program (DTS) multifamily units, with more than 48% of those units as affordable to very low-income households. More than 75% of the DTS units financed by GSE loan purchases were in the affordable housing preservation market.
  • From 2018-2021, the FHLBanks provided nearly $1.7 billion under their Affordable Housing Programs (AHPs), supporting more than 168,000 units for low- or moderate-income households, including more than 88,000 very low-income units. The FHLBanks provided close to $22 billion in Community Investment Program (CIP) housing, and Community Investment Cash Advance (CICA) Programs targeted toward economic development advances, with the CIP supporting more than 83,000 units for households with incomes at or below 115% of the area median income.

Despite the positive measures noted in the report, the gap in home loan application acceptance rates remains persistent for Black and Latino borrowers, as these borrowers represented 6.3% and 14.2%, respectively, of all home loans purchased by the GSEs in Q4 2021. According to the report, among large metro areas, Miami-Fort Lauderdale-Pompano, Florida reported the largest share of home purchase loans for Black and Latino borrowers, as the GSEs acquired 28,900 home purchase loans for Black and Latino borrowers, which represents 55.5% of all home purchase loans.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

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