FHFA Calls on Fannie Mae and Freddie Mac to Help Underserved Markets

Filed in Housing Finance by on December 15, 2015 0 Comments

186331067 (2)The Federal Housing Finance Agency (FHFA) today announced it is seeking comments on a proposed rule to require Fannie Mae and Freddie Mac to serve three specified underserved markets: manufactured housing, affordable housing preservation and rural markets.

The proposed rule would require Fannie Mae and Freddie Mac to reach out to these communities that have traditionally been underserved by the housing finance market and take steps to increase the availability of mortgage financing for very low-, low- and moderate-income families in these markets. This is known as the “duty to serve” concept.

Under the proposed rule, Fannie Mae and Freddie Mac would be required to submit to FHFA an Underserved Markets Plan covering a three-year period that describes the activities and objectives they will undertake to meet their duty to serve.

  • For the manufactured housing market, duty to serve credit would be provided for eligible Fannie-Freddie activities related to manufactured homes financed as real property and blanket loans for certain categories of manufactured housing communities.
  • For the affordable housing preservation market, duty to serve credit would be provided for eligible Fannie-Freddie activities related to preserving the affordability of housing for renters and home buyers, including activities under the programs specified in the Safety and Soundness Act.  Duty to serve credit would also be provided for activities related to existing small multifamily rental properties, energy efficiency improvements on existing multifamily rental and single-family first-lien properties, shared equity homeownership programs and the U.S. Department of Housing and Urban Development’s Choice Neighborhoods Initiative and Rental Assistance Demonstration program.
  • For the rural market, duty to serve credit would be provided for eligible Fannie-Freddie activities related to housing in rural areas, including activities serving the following high-needs rural regions and populations:  Middle Appalachia, the Lower Mississippi Delta, colonias, members of a Native American tribe located in a Native American area, and migrant and seasonal agricultural workers.

FHFA will be taking public comments on the rule for 90 days once it’s published in the Federal Register and NAHB intends to weigh in.

For more information, contact NAHB’s Michelle Kitchen at 800-368-5242 x8352.

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