The Federal Housing Finance Agency (FHFA) has sent a ""proposed rule to the Federal Register"":http://www.fhfa.gov/webfiles/15406/2010-2011%20Enterp%20Hsng%20Goals%20to%20Fed%20Reg_Signed%20%282%29.pdf establishing new housing goals for Fannie Mae and Freddie Mac.[IMAGE]
The Housing and Economic Recovery Act of 2008 (HERA) gave FHFA authority to establish annual performance goals for the two mortgage giants. These goals set the minimum percentage of mortgage acquisitions by the GSEs for certain borrower income groups. For 2010 and 2011, FHFA is proposing three single-family home purchase goals and one single-family refinance goal.
FHFA is requiring that 27 percent of the total mortgages purchased by Fannie and Freddie be of low-income housing, meaning family income does not exceed 80 percent of the median area income.[COLUMN_BREAK]
Within the very low-income category, defined as families earning less than 50 percent of the median area income, the agency has set a mortgage purchase benchmark of 8 percent.
The GSEs' purchases of mortgages made to families in low income/high minority/disaster areas should equal at least 13 percent of their total loan acquisitions, FHFA said.
In addition, the agency said 25 percent of the refinanced mortgages purchased by Fannie and Freddie must be of loans made to low-income families.
FHFA is also proposing separate goals for the firms' purchases of multifamily mortgages, and is suggesting to prohibit applying mortgages in private-label securities toward each companies' housing goals.
""FHFA does not intend for the Enterprises to undertake uneconomic or high-risk activities in support of the goals, nor does it intend for the Enterprises' state of conservatorship to be a justification for withdrawing support from these market segments,"" the agency said in a statement.
If either of the GSEs fails to meet the predetermined housing goals, they are required to submit a revised housing plan to FHFA for approval.