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LIHTC Update: FHFA proposes affordable housing goals for Fannie Mae and Freddie Mac

1 August 2017
 August 1, 2017
Category Industry News, News

The Federal Housing Finance Agency (FHFA) proposed new housing goals for the Government-sponsored Enterprises (GSEs) – Fannie Mae and Freddie Mac – for the years 2018 through 2020.

Although the Enterprises remain in conservatorship at this time, they continue to have the mission of supporting a stable and liquid national market for residential mortgage financing. FHFA has continued to establish annual housing goals for the Enterprises and to assess their performance under the housing goals each year during conservatorship.

The annual housing goals are one measure of the extent to which the Enterprises are meeting their public purposes, which include “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.” The existing housing goals for the Enterprises include benchmark levels for each housing goal through the end of 2017.

Multifamily Goals

The proposed rule maintains most of the affordable housing goals and subgoals, including single-family and multifamily mortgages, at their current level for the next two years:

Goal Criteria Current goal level for 2017 Proposed goal level for 2018-2020
Low-Income Goal Units affordable to families with incomes no greater than 80 percent of area median income in multifamily rental properties with mortgages purchased by an Enterprise 300,000 units 315,000 units.
Very Low-Income Subgoal Units affordable to families with incomes no greater than 50 percent of area median income in multifamily rental properties with mortgages purchased by an Enterprise 60,000 units 60,000 units.
Low-Income Small Multifamily Subgoal Units affordable to families with incomes no greater than 80 percent of area median income in small multifamily rental properties (5 to 50 units) with mortgages purchased by an Enterprise 10,000 units 10,000 units.

Clarifying and Conforming Changes

The proposed rule would also make changes and clarifications to the existing rules, including minor technical changes to some regulatory definitions. The proposed rule also would revise the requirements applicable to the housing plan an Enterprise may be required to submit based on a failure to achieve one or more of the housing goals.

To view the attached rule, including information on the proposed Housing Goals for 2018-2020, please click here.

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