2021 Enterprise Housing Goals
| Published date | 13 August 2020 |
| Citation | 85 FR 49312 |
| Record Number | 2020-15959 |
| Section | Proposed rules |
| Court | Federal Housing Finance Agency |
Federal Register, Volume 85 Issue 157 (Thursday, August 13, 2020)
[Federal Register Volume 85, Number 157 (Thursday, August 13, 2020)]
[Proposed Rules]
[Pages 49312-49322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15959]
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FEDERAL HOUSING FINANCE AGENCY
12 CFR Part 1282
RIN 2590-AB04
2021 Enterprise Housing Goals
AGENCY: Federal Housing Finance Agency.
ACTION: Proposed rule.
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SUMMARY: The Federal Housing Finance Agency (FHFA) is proposing a rule
and seeking comments on proposed benchmark levels for the 2021 housing
goals for Fannie Mae and Freddie Mac (the Enterprises). The housing
goals apply to mortgages purchased by the Enterprises and include
separate categories for single-family and multifamily housing that is
affordable to low-income and very low-income families, among other
categories. This proposed rule would establish benchmark levels for
each of the housing goals for 2021.
DATES: Comments must be received on or before October 13, 2020.
ADDRESSES: You may submit your comments on the proposed rule,
identified by regulatory information number (RIN) 2590-AB04, by any one
of the following methods:
Agency Website: https://www.fhfa.gov/open-for-comment-or-input.
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. If you submit your
comment to the Federal eRulemaking Portal, please also send it by email
to FHFA at [email protected] to ensure timely receipt by FHFA.
Include the following information in the subject line of your
submission: Comments/RIN 2590-AB04.
Hand Delivered/Courier: The hand delivery address is:
Alfred M. Pollard, General Counsel, Attention: Comments/RIN 2590-AB04,
Federal Housing Finance Agency, Eighth Floor, 400 Seventh Street SW,
Washington, DC 20219. Deliver the package at the Seventh Street
entrance Guard Desk, First Floor, on business days between 9 a.m. and 5
p.m.
U.S. Mail, United Parcel Service, Federal Express, or
Other Mail Service: The mailing address for comments is: Alfred M.
Pollard, General Counsel, Attention: Comments/RIN 2590-AB04, Federal
Housing Finance Agency, Eighth Floor, 400 Seventh Street SW,
Washington, DC 20219. Please note that all mail sent to FHFA via U.S.
Mail is routed through a national irradiation facility, a process that
may delay delivery by approximately two weeks.
FOR FURTHER INFORMATION CONTACT: Ted Wartell, Associate Director,
Housing & Community Investment, Division of Housing Mission and Goals,
at (202) 649-3157, [email protected]; Padmasini Raman at (202) 649-
3633, [email protected]; or Kevin Sheehan, Associate General
Counsel, Office of General Counsel, (202) 649-3086,
[email protected]. These are not toll-free numbers. The mailing
address is: Federal Housing Finance Agency, 400 Seventh Street SW,
Washington, DC 20219. The telephone number for the Telecommunications
Device for the Deaf is (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Comments
FHFA invites comments on all aspects of the proposed rule and will
take all comments into consideration before issuing a final rule.
Copies of all comments on the proposed rule will be posted without
change, including any personal information you provide such as your
name, address, email address, and telephone number, on the FHFA website
at https://www.fhfa.gov. In addition, copies of all comments received
will be available for examination by the public through the electronic
rulemaking docket for this proposed rule also located on the FHFA
website.
II. Background
Uncertainty over public health and the economic impacts of the
COVID-19 pandemic has caused significant disruption in both the single-
family and multifamily housing markets since March. For reasons
explained in more detail later in the proposed rule, due to the
unexpectedly severe nature of the COVID-19 pandemic and associated
economic uncertainty, FHFA is proposing benchmark levels for the
single-family and multifamily goals for calendar year 2021 only. The
proposed benchmark levels are set forth below and would be the same as
those for 2018-2020. FHFA will subsequently conduct a new round of
notice and comment rulemaking to establish benchmark levels for 2022
and beyond.
A. Statutory and Regulatory Background for the Existing Housing Goals
The Federal Housing Enterprises Financial Safety and Soundness Act
of 1992 (Safety and Soundness Act) requires FHFA to establish several
annual housing goals for both single-family and multifamily mortgages
purchased by Fannie Mae and Freddie Mac.\1\ 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.'' \2\
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\1\ See 12 U.S.C. 4561(a).
\2\ See 12 U.S.C. 4501(7).
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FHFA has established annual housing goals for Enterprise purchases
of single-family and multifamily goals consistent with the requirements
of the Safety and Soundness Act. The structure of the housing goals and
the rules for determining how mortgage purchases are counted or not
counted are defined in the housing goals regulation.\3\ The most recent
rule established benchmark levels for the housing goals for 2018-
2020.\4\ This proposed rule would establish benchmark levels for 2021,
but it would not make any other changes to the housing goals
regulation.
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\3\ See 12 CFR part 1282.
\4\ See 83 FR 5878 (Feb. 12, 2018).
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Single-family goals. The single-family goals defined under the
Safety and Soundness Act include separate categories for home purchase
mortgages for low-income families, very low-income families, and
families that reside in low-income areas.\5\ FHFA has also established
a subgoal within the low-income areas goal that is limited to families
in low-income census tracts and moderate-income families in minority
census tracts. Performance on the single-family home purchase goals is
measured as the percentage of the total home purchase mortgages
purchased by an Enterprise each year that qualify for each goal or
subgoal. There is also a separate goal for refinancing mortgages for
low-income families, and
[[Page 49313]]
performance on the refinancing goal is determined in a similar way.
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\5\ The low-income areas housing goal includes (1) families in
``low-income census tracts,'' defined as census tracts with median
income less than or equal to 80 percent of AMI; (2) families with
incomes less than or equal to area median income who reside in
minority census tracts (defined as census tracts with a minority
population of at least 30 percent and a tract median income of less
than 100 percent of AMI); and (3) families with incomes less than or
equal to 100 percent of area median income who reside in designated
disaster areas.
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Under the Safety and Soundness Act, the single-family housing goals
are limited to mortgages on owner-occupied housing with one to four
units total. The single-family goals cover conventional, conforming
mortgages, defined as mortgages that are not insured or guaranteed by
the Federal Housing Administration or another government agency and
with principal balances that do not exceed the conforming loan limits
for Enterprise mortgages.
Two-part evaluation approach. The performance of the Enterprises on
the housing goals is evaluated using a two-part approach, comparing the
goal-qualifying share of the Enterprise's mortgage purchases to two
separate measures: A benchmark level; and a market level. In order to
meet a single-family housing goal, the percentage of mortgage purchases
by an Enterprise that meet each goal must equal or exceed either the
benchmark level or the market level for that year. The benchmark level
is set prospectively by rulemaking based on various factors set forth
in the Safety and Soundness Act.\6\ The market level is determined
retrospectively for each year, based on the actual goal-qualifying
share of the overall market as measured by the Home Mortgage Disclosure
Act (HMDA) data for that year. The overall market that FHFA uses for
setting both the prospective benchmark level and the retrospective
market level consists of all single-family owner-occupied conventional
conforming mortgages that would be eligible for purchase by either
Enterprise. It includes loans purchased by the Enterprises as well as
comparable loans held in a lender's portfolio. It also includes any
loans that are part of a private label security (PLS), though very few
such securities have been issued for conventional conforming mortgages
since 2008.
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\6\ See 12 U.S.C. 4562(e).
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While both the benchmark level and the retrospective market level
are designed to measure the current year's mortgage originations, the
performance of the Enterprises on the housing goals includes all
Enterprise purchases in that year, regardless of the year in which the
loan was originated. This includes housing goals credit when the
Enterprises acquire qualified seasoned loans. (Seasoned loans are loans
that were originated in prior years and acquired by the Enterprise in
the current year.)
Multifamily goals. The multifamily goals defined under the Safety
and Soundness Act include categories for mortgages on multifamily
properties (properties with five or more units) with rental units
affordable to low-income families and mortgages on multifamily
properties with rental units affordable to very low-income families.
FHFA has also established a small multifamily low-income subgoal for
properties with 5-50 units. The multifamily housing goals include all
Enterprise multifamily mortgage purchases, regardless of the purpose of
the loan. The multifamily goals evaluate the performance of the
Enterprises based on numeric targets, not percentages, for the number
of affordable units in properties backed by mortgages purchased by an
Enterprise. FHFA has not established a retrospective market level
measure for the multifamily goals, due in part to a lack of
comprehensive data about the multifamily market. As a result, FHFA
currently measures Enterprise multifamily goals performance against the
benchmark levels only.
The Safety and Soundness Act requires that affordability for rental
units under the multifamily goals be determined based on rents that
``[do] not exceed 30 percent of the maximum income level of such income
category, with appropriate adjustments for unit size as measured by the
number of bedrooms.'' \7\ The housing goals regulation considers the
net rent paid by the renter and, therefore, nets out any subsidy
payments that the renter may receive, including housing assistance
payments.
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\7\ See 12 U.S.C. 4563(c). This affordability definition is
sometimes referred to as the ``Brooke Amendment,'' which states that
to be affordable at the 80 percent of area median income level, the
rents must not exceed 30 percent of the renter's income which must
not exceed 80 percent of the area median income. See https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_092214.html
for a description of the Brooke Amendment and background on the
notion of affordability embedded in the housing goals.
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B. Adjusting the Housing Goals
If, after publication of a final rule establishing the housing
goals for 2021, FHFA determines that any of the single-family or
multifamily housing goals should be adjusted in light of market
conditions, to ensure the safety and soundness of the Enterprises, or
for any other reason, FHFA will take any steps that are necessary and
appropriate to adjust that goal such as reducing the benchmark levels
through the processes in the existing regulation. FHFA recognizes that
2021 is likely to be a year of disrupted economic activity. While FHFA
is taking this uncertainty into consideration in proposing the
benchmark levels for 2021, FHFA may take other actions consistent with
the Safety and Soundness Act and the Enterprise housing goals
regulation based on new information or developments that occur after
publication of a final rule.
For example, under the Safety and Soundness Act and the Enterprise
housing goals regulation, FHFA may reduce the benchmark levels in
response to an Enterprise petition for reduction for any of the single-
family or multifamily housing goals in a particular year based on a
determination by FHFA that: (1) Market and economic conditions or the
financial condition of the Enterprise require a reduction; or (2)
efforts to meet the goal or subgoal would result in the constraint of
liquidity, over-investment in certain market segments, or other
consequences contrary to the intent of the Safety and Soundness Act or
the purposes of the Enterprises' charter acts.\8\
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\8\ 12 CFR 1282.14(d).
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The Safety and Soundness Act and the Enterprise housing goals
regulation also take into account the possibility that achievement of a
particular housing goal may or may not have been feasible for an
Enterprise. If FHFA determines that a housing goal was not feasible for
an Enterprise to achieve, then the statute and regulation provide for
no further enforcement of that housing goal for that year.\9\
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\9\ 12 CFR 1282.21(a); 12 U.S.C. 4566(b).
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If FHFA determines that an Enterprise failed to meet a housing goal
and that achievement of the housing goal was feasible, then the statute
and regulation provide FHFA with discretion to require the Enterprise
to submit a housing plan describing the specific actions the Enterprise
will take to improve its performance. FHFA is requesting comments on
factors that FHFA should consider in determining whether to require an
Enterprise to submit a housing plan. For example, are there other
Enterprise activities such as forbearance actions, loss mitigation
efforts, loan modifications, and other market support activities that
FHFA should take into account while reviewing Enterprise goals
performance for 2021 on both the single-family and multifamily side?
While FHFA is not proposing any change to the regulation regarding
housing plans, FHFA welcomes input from the public on factors that FHFA
should consider in making discretionary determinations on whether to
require a housing plan.
C. Housing Goals Under Conservatorship
On September 6, 2008, FHFA placed each Enterprise into
conservatorship.
[[Page 49314]]
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.
III. Summary of Proposed Rule
Due to the unexpectedly severe nature of the COVID-19 pandemic and
associated economic uncertainty, FHFA is proposing benchmark levels for
the single-family and multifamily goals for calendar year 2021 only.
FHFA will subsequently conduct a new round of notice and comment
rulemaking to establish benchmark levels for 2022 and beyond. The
proposed benchmark levels are set forth below and would be the same as
those for 2018-2020.
A. Proposed Benchmark Levels for the Single-Family Housing Goals for
2021
This proposed rule would establish the benchmark levels for the
single-family housing goals and subgoal for 2021 as follows:
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Current Proposed
benchmark benchmark
Goal Criteria level for level for
2018-2020 2021
(percent) (percent)
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Low-Income Home Purchase Goal.............. Home purchase mortgages on single- 24 24
family, owner-occupied properties
with borrowers with incomes no
greater than 80 percent of area
median income.
Very Low-Income Home Purchase Goal......... Home purchase mortgages on single- 6 6
family, owner-occupied properties
with borrowers with incomes no
greater than 50 percent of area
median income.
Low-Income Areas Home Purchase Subgoal..... Home purchase mortgages on single- 14 14
family, owner-occupied properties
with:
Borrowers in census tracts
with tract median income of no
greater than 80 percent of area
median income; or
Borrowers with income no
greater than 100 percent of area
median income in census tracts
where (i) tract income is less
than 100 percent of area median
income, and (ii) minorities
comprise at least 30 percent of
the tract population.
Low-Income Refinancing Goal................ Refinancing mortgages on single- 21 21
family, owner-occupied properties
with borrowers with incomes no
greater than 80 percent of area
median income.
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The single-family housing goals also include a Low-Income Areas
Home Purchase Goal that the regulation defines as the benchmark level
for the Low-Income Areas Home Purchase Subgoal plus an additional
``disaster areas'' increment that FHFA determines each year based on
Federal Emergency Management Agency declarations of disasters that are
applicable to that year. The proposed rule would not make any change to
the criteria or process for setting the additional ``disaster areas''
increment for 2021.
B. Proposed Benchmark Levels for the Multifamily Housing Goals for 2021
The proposed rule would also establish the benchmark levels for the
multifamily goal and subgoals for 2021 as follows:
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Current
benchmark Proposed
Goal Criteria level for benchmark
2018-2020 level for
(units) 2021 (units)
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Low-Income Goal............................ Units affordable to families with 315,000 315,000
incomes no greater than 80 percent
of area median income in
multifamily rental properties with
mortgages purchased by an
Enterprise.
Very Low-Income Subgoal.................... Units affordable to families with 60,000 60,000
incomes no greater than 50 percent
of area median income in
multifamily rental properties with
mortgages purchased by an
Enterprise.
Low-Income Small Multifamily Subgoal....... Units affordable to families with 10,000 10,000
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.
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IV. Single-Family Housing Goals
The Safety and Soundness Act requires FHFA to consider the
following seven factors in setting the single-family housing goals:
1. National housing needs;
2. Economic, housing, and demographic conditions, including
expected market developments;
3. The performance and effort of the Enterprises toward achieving
the housing goals in previous years;
4. The ability of the Enterprises to lead the industry in making
mortgage credit available;
5. Such other reliable mortgage data as may be available;
6. The size of the purchase money conventional mortgage market, or
refinance conventional mortgage market, as applicable, serving each of
the types of families described, relative to the size of the overall
purchase money mortgage market or the overall refinance mortgage
market, respectively; and
7. The need to maintain the sound financial condition of the
Enterprises.\10\ FHFA has considered each of these
[[Page 49315]]
seven statutory factors in setting the proposed benchmark levels for
each of the single-family housing goals and subgoal.
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\10\ 12 U.S.C. 4562(e)(2)(B).
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In setting the benchmark levels for the single-family housing
goals, FHFA typically relies on statistical market models to evaluate
these statutory factors and generate a point forecast for each goal as
well as a confidence interval for the point forecast. FHFA then
considers other statutory factors, as well as other relevant policy
issues, to select a specific point forecast within the confidence
interval as the proposed benchmark level. However, due to the
unexpectedly severe nature of the COVID-19 pandemic and the current
associated uncertainty going forward, FHFA has determined that the data
used to create the statistical market models is not sufficient to
reflect economic conditions for 2021. As a result, FHFA is proposing to
keep the benchmark levels for 2021 at the same level as for 2020.
In proposing the benchmark levels for the single-family housing
goals for 2021, FHFA considered the statutory factors, including the
current economic conditions, national housing needs, recent market
developments, and the past performance of the Enterprises on the
housing goals.
Current Economic Conditions
Uncertainty over public health and the economic impacts of the
COVID-19 pandemic have dealt a severe blow to the U.S. economy. The
sudden drop in economic activity has created widespread disruptions and
resulted in an unprecedented level of job losses. The unemployment rate
jumped from 3.5 percent in February to 14.7 percent in April.\11\
Inflation-adjusted consumer expenditures, which account for about two-
thirds of gross domestic product (GDP), declined 7.3 percent in March.
On June 8, the Business Cycle Dating Committee of the National Bureau
of Economic Research officially declared that the U.S. economy fell
into a recession in February, ending one of the longest economic
expansions in history.\12\
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\11\ The Bureau of Labor Statistics (BLS), which publishes the
unemployment rate and other labor statistics each month, noted that
the April unemployment rate probably understated the share of
unemployed workers in the labor force because many workers who
should have been classified as ``unemployed on temporary layoff''
were most likely misclassified as ``employed absent from work'' in
the Current Population Survey. A BLS analysis of the underlying data
suggests that, had that misclassification not occurred, the April
unemployment rate would have been nearly 5 percentage points higher.
See Bureau of Labor Statistics, ``Frequently Asked Questions: The
Impact of the Coronavirus (COVID-19) Pandemic on the Employment
Situation for April 2020'' (May 8, 2020), https://go.usa.gov/xvM73.
\12\ See https://www.nber.org/cycles/june2020.html.
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The depth and duration of this recession and the path to economic
recovery remain highly uncertain. According to the most recent estimate
published by the Congressional Budget Office (CBO),\13\ the COVID-19
pandemic and associated social distancing triggered a sharp contraction
in output in the second quarter of 2020 but the CBO projects that real
Gross Domestic Product (GDP) will grow rapidly in the second half of
2020 and the first half of 2021. Strong GDP growth is projected to
continue thereafter but at a slower pace. The unemployment rate is
projected to peak at over 14 percent in the third quarter of this year
and then to fall quickly as output increases in the second half of 2020
and throughout 2021. Nonetheless, real GDP growth is projected to be
negative 5.8 percent for 2020 while the unemployment rate will be 10.6
percent for 2020. However, the CBO notes that there is an ``unusually
high degree of uncertainty'' surrounding its projections due to the
nature of the pandemic and the behavioral and policy responses aimed at
containing its spread, and the difficulties of recording and compiling
economic data during the unusually strong economic disruption in the
second quarter of 2020.
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\13\ Congressional Budget Office, ``An Update to the Economic
Outlook: 2020-2030,'' published on July 2, 2020, accessed on 7/8/
2020 at https://www.cbo.gov/publication/56442.
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The implications for the primary and secondary mortgage markets are
still unfolding as policy makers consider responses to the economic
disruption caused by COVID-19. Congress passed the CARES Act to address
some of the most pressing impacts of the economic disruption, including
by extending unemployment benefits. Nevertheless, the availability of
credit has contracted in the mortgage market due to a variety of
factors, including additional down payment and loan-to-value
restrictions and generally tightened underwriting requirements.
FHFA is monitoring how these unfolding changes may impact various
segments of the market, including those targeted by the housing goals.
For instance, while the economic disruption has resulted in tightening
of credit, job losses and uncertainty may also lead many low-income
households to exit the market of potential homebuyers. However, the
size of the impact on the share of low-income households among all home
purchase mortgages is uncertain.
National Housing Needs
At the start of 2020, the American housing market overall was in a
strong position. After falling for 12 consecutive years, the U.S.
homeownership rate reached 65.1 percent in 2019, with first-time
homebuyers becoming an increasingly larger share of the homebuying
market, helping to drive its overall expansion.\14\ Affordability
challenges for low-income households remained, however. While interest
rates have remained low since the recession, home prices have climbed
steadily, with real prices back within 2 percent of their 2006 peak at
the end of 2018, according to the FHFA House Price Index. The ratio of
median home price to median household income is a common yardstick for
measuring affordability, indicating how difficult it is for would-be
buyers to qualify for a mortgage and save for a down payment.
Nationwide, this ratio declined from a peak of 4.7 in 2005 to a low of
3.3 in 2011 and then rose to 4.1 in 2018.\15\ However, during 2019,
house price growth was starting to align with the growth in median
household incomes.
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\14\ U.S. Census Bureau, ``Quarterly Residential Vacancies and
Homeownership,'' Fourth Quarter 2019, Release Number: CB20-05,
available at https://www.census.gov/housing/hvs/files/qtr419/Q419press.pdf.
\15\ Joint Center for Housing Studies of Harvard University,
``The State of the Nation's Housing 2019,'' available at https://www.jchs.harvard.edu/state-nations-housing-2019.
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Recent Market Developments
In response to the COVID-19 pandemic, financial markets endured a
severe dislocation in March, and housing markets were no exception.
What is known to date is preliminary, as key housing market
indicators--on housing construction, sales, prices, inventory, and
more--indicate that the extent of disruption is extensive. At the same
time housing supply remains tight, providing support to house prices.
At least initially, the combination of social distancing measures and
heightened economic concerns caused home sales to drop significantly
and homebuilders to pull back on new housing starts. Single-family
housing starts declined 17.5 percent in March and another 25.4 percent
in April. Housing starts rose 4.3 percent in May, but this still leaves
the rate down 23.2 percent compared to May 2019.\16\
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\16\ U.S. Census Bureau, ``Monthly New Residential
Construction,'' May 2020, Release Number: CB20-90, available at
https://www.census.gov/construction/nrc/pdf/newresconst.pdf.
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The full impact of the COVID-19 pandemic on the low-income home
purchase market is unknown. However, the levels of output and
employment
[[Page 49316]]
remain far below their pre-pandemic levels, and significant uncertainty
remains about the timing and strength of the recovery. It is likely
that the full picture of the COVID-19 pandemic's impact on housing
markets will not be known until well after the virus is contained.
While the Enterprises showed strong goals performance in 2020 before
the onset of the COVID-19 pandemic, it is unclear whether this will
continue in the light of evolving market conditions and continued
tightening of underwriting by lenders.
Thus, while recent Enterprise performance on the housing goals has
tended to exceed the benchmark levels set by FHFA, the economic
disruption and uncertainty seen so far in 2020 support keeping the
levels unchanged from 2018-2020.
Past Performance of the Enterprises
Table 1 provides the annual performance of both Enterprises on the
single-family housing goals between 2010 and 2019.\17\ The performance
of the Enterprises in the two most recent years (2018 and 2019) shows
that both Enterprises exceeded the benchmark levels set by FHFA for
each of the single-family housing goals.
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\17\ The 2019 data is preliminary data reported by the
Enterprises. FHFA will make the official determinations on
Enterprise performance under the 2019 housing goals later in 2020.
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While the final determinations of Enterprise goal compliance for
2019 are pending FHFA's determination of the market level based on HMDA
data, both Enterprises report that their performance exceeded the
benchmark levels, continuing the recent trend of Enterprise performance
above the benchmark levels for the single-family housing goals for
2018-2020.
Table 1--Enterprise Single-Family Housing Goals Performance (2010-2019)
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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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Low-Income Home Purchase Goal
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Actual Market................................................. 27.2 26.5 26.6 24 22.8 23.6 22.9 24.3 25.5 TBD
Benchmark..................................................... 27 27 23 23 23 24 24 24 24 24
Fannie Mae Performance........................................ * 25.1 * 25.8 25.6 23.8 23.5 * 23.5 22.9 25.5 28.2 27.8
Freddie Mac Performance....................................... 27.8 * 23.3 24.4 * 21.8 * 21 * 22.3 23.8 * 23.2 25.8 27.4
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Very Low-Income Home Purchase Goal
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Actual Market................................................. 8.1 8 7.7 6.3 5.7 5.8 5.4 5.9 6.5 TBD
Benchmark..................................................... 8 8 7 7 7 6 6 6 6 6
Fannie Mae Performance........................................ * 7.2 * 7.6 7.3 * 6 5.7 * 5.6 * 5.2 5.9 6.7 6.5
Freddie Mac Performance....................................... 8.4 * 6.6 7.1 * 5.5 * 4.9 * 5.4 5.7 * 5.7 6.3 6.8
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Low-Income Areas Home Purchase Goal
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Actual Market................................................. 24 22 23.2 22.1 22.1 19.8 19.7 21.5 22.6 TBD
Benchmark..................................................... 24 24 20 21 18 19 17 18 18 19
Fannie Mae Performance........................................ 24.1 22.4 22.3 21.6 22.7 20.4 20.2 22.9 25.1 24.5
Freddie Mac Performance....................................... * 23.8 * 19.2 20.6 * 20 20.1 19 19.9 20.9 22.6 22.9
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Low-Income Areas Home Purchase Subgoal
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Actual Market................................................. 12.1 11.4 13.6 14.2 15 15.2 15.9 17.1 18 TBD
Benchmark..................................................... 13 13 11 11 11 14 14 14 14 14
Fannie Mae Performance........................................ 12.4 11.6 13.1 14 15.5 15.6 16.2 18.3 20.1 19.5
Freddie Mac Performance....................................... * 10.8 * 9.2 11.4 12.3 13.6 14.5 15.6 16.4 17.3 18.0
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Low-Income Refinance Goal
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Actual Market................................................. 20.2 21.5 22.3 24.3 25 22.5 19.8 25.4 30.7 TBD
Benchmark..................................................... 21 21 20 20 20 21 21 21 21 21
Fannie Mae Performance........................................ 20.9 23.1 21.8 24.3 26.5 22.1 * 19.5 24.8 31.2 23.8
Freddie Mac Performance....................................... 22 23.4 22.4 24.1 26.4 22.8 21 24.8 27.3 22.4
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* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.
Tables 2 through 5 provide additional detail on the recent
performance of the Enterprises for each of the goals and the subgoal.
The tables show the number as well as the share of goal-qualifying
loans that the Enterprises acquired from 2013-2019. In 2018 and 2019,
the Enterprises increased the number of goals-qualifying loans they
acquired at the same time that their overall single-family mortgage
purchase volume increased.
Table 2--Low-Income Home Purchase Goal
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Performance
Year -------------------------------------------------------------------------------------------------
2013 2014 2015 2016 2017 2018 2019
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Actual Market......................................... 24.0% 22.8% 23.6% 22.9% 24.3% 25.5% TBD
Benchmark............................................. 23% 23% 24% 24% 24% 24% 24%
Fannie Mae Performance:
[[Page 49317]]
Low-Income Home Purchase Mortgages................ 193,660 177,846 188,891 221,628 263,296 294,559 * 298,702
Total Home Purchase Mortgages..................... 814,066 757,870 802,432 966,800 1,032,567 1,044,098 * 1,075,032
Low-Income % of Home Purchase Mortgages........... 23.8% 23.5% 23.5% 22.9% 25.5% 28.21/o * 27.8%
Freddie Mac Performance:
Low-Income Home Purchase Mortgages................ 93,425 108,948 129,455 153,434 165,555 199,429 * 235,811
Total Home Purchase Mortgages..................... 429,086 519,731 579,340 644,988 713,901 774,394 * 860,669
Low-Income % of Home Purchase Mortgages........... 21.8% 21.0% 22.3% 23.8% 23.2% 25.8% * 27.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.
Table 3--Very Low-Income Home Purchase Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Performance
Year -------------------------------------------------------------------------------------------------
2013 2014 2015 2016 2017 2018 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual Market......................................... 6.30% 5.70% 5.80% 5.40% 5.90% 6.50% TBD
Benchmark............................................. 7% 7% 6% 6% 6% 6% 6%
Fannie Mae Performance:
Very Low-Income Home Purchase Mortgages........... 48,810 42,872 45,022 49,932 60,561 69,952 * 70,214
Total Home Purchase Mortgages..................... 814,066 757,870 802,432 966,800 1,032,567 1,044,098 * 1,075,032
Very Low-Income % of Home Purchase Mortgages...... 6.0% 5.7% 5.6% 5.2% 5.9% 6.7% * 6.5%
Freddie Mac Performance:
Very Low-Income Home Purchase Mortgages........... 23,705 25,232 31,146 36,837 40,848 48,823 * 58,136
Total Home Purchase Mortgages..................... 429,086 519,731 579,340 644,988 713,901 774,394 * 860,669
Very Low-Income % of Home Purchase Mortgages...... 5.5% 4.9% 5.4% 5.7% 5.7% 6.3% * 6.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.
Table 4--Low-Income Areas Home Purchase Subgoal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Performance
Year -------------------------------------------------------------------------------------------------
2013 2014 2015 2016 2017 2018 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual Market......................................... 14.2% 15.2% 15.2% 15.9% 17.1% 18.0% TBD
Benchmark............................................. 11% 11% 14% 14% 14% 14% 14%
Fannie Mae Performance:
Low-Income Area Home Purchase Mortgages........... 86,430 91,691 99,723 125,956 152,102 167,265 * 166,709
High-Minority Area Home Purchase Mortgages........ 27,425 25,650 25,349 30,535 36,942 42,099 * 42,732
Subgoal-Qualifying Total Home Purchase Mortgages.. 113,855 117,341 125,072 156,491 189,044 209,364 * 209,441
Total Home Purchase Mortgages..................... 814,066 757,870 802,432 966,800 1,032,567 1,044,098 * 1,075,032
Low-Income Area % of Home Purchase Mortgages...... 14.0% 15.5% 15.6% 16.2% 18.3% 20.1% * 19.5%
Freddie Mac Performance:
Low-Income Area Home Purchase Mortgages........... 40,444 55,987 67,172 80,805 94,961 106,815 * 123,953
High-Minority Area Home Purchase Mortgages........ 12,177 14,808 16,601 19,788 22,190 27,310 * 30,770
[[Page 49318]]
Subgoal-Qualifying Total Home Purchase Mortgages.. 52,621 70,795 83,773 100,593 117,151 134,125 * 154,723
Total Home Purchase Mortgages..................... 429,086 519,731 579,340 644,988 713,901 774,394 * 860,669
Low-Income Area % of Home Purchase Mortgages...... 12.3% 13.6% 14.5% 15.6% 16.4% 17.3% * 18.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.
Table 5--Low-Income Refinance Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Performance
Year -------------------------------------------------------------------------------------------------
2013 2014 2015 2016 2017 2018 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual Market......................................... 24.3% 25.0% 22.5% 19.8% 25.4% 30.7% TBD
Benchmark............................................. 20% 20% 21% 21% 21% 21% 21%
Fannie Mae Performance:
Low-lncome Refinance Mortgages.................... 531,611 222,329 231,380 248,698 223,768 196,230 * 234,249
Total Refinance Mortgages......................... 2,186,541 840,506 1,045,258 1,274,342 902,123 629,816 * 985,932
Low-lncome % of Refinance Mortgages............... 24.3% 26.5% 22.1% 19.5% 24.8% 31.2% * 23.8%
Freddie Mac Performance:
Low-Income Refinance Mortgages.................... 320,962 131,921 182,594 174,708 143,475 104,843 * 159,322
Total Refinance Mortgages......................... 1,331,034 514,936 800,369 830,888 578,548 384,593 * 712,376
Low-lncome % of Refinance Mortgages............... 24.1% 25.6% 22.8% 21.0% 24.8% 27.3% * 22.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.
Proposed Benchmark Levels for the Single-Family Housing Goals for 2021
FHFA is proposing to establish the benchmark levels for each of the
single-family housing goals and the subgoal for 2021 at the same levels
that applied for 2018-2020. While recent Enterprise performance and
market data have tended to exceed the established benchmark levels,
FHFA expects that both the market levels and Enterprise performance
could decline in 2021 due to impacts related to economic disruption
caused by the COVID-19 pandemic. Information on Enterprise goals
performance remains confidential until it is reported after the end of
the year. However, FHFA monitors this confidential information on a
regular basis. FHFA recognizes that the performance trends in the first
half of 2020 reflect disruption due to COVID-19, and FHFA expects this
to continue into 2021. Based on the above factors, FHFA believes that
extending the benchmark levels from 2020 to 2021 will provide
achievable yet challenging targets for the Enterprises.
V. Multifamily Housing Goals
The Safety and Soundness Act requires FHFA to consider the
following six factors in setting the multifamily housing goals:
1. National multifamily mortgage credit needs and the ability of
the Enterprises to provide additional liquidity and stability for the
multifamily mortgage market;
2. The performance and effort of the Enterprises in making mortgage
credit available for multifamily housing in previous years;
3. The size of the multifamily mortgage market for housing
affordable to low-income and very low-income families, including the
size of the multifamily markets for housing of a smaller or limited
size;
4. The ability of the Enterprises to lead the market in making
multifamily mortgage credit available, especially for multifamily
housing affordable to low-income and very low-income families;
5. The availability of public subsidies; and
6. The need to maintain the sound financial condition of the
Enterprises.\18\
---------------------------------------------------------------------------
\18\ 12 U.S.C. 4563(a)(4).
---------------------------------------------------------------------------
FHFA has considered each of these statutory factors in setting the
proposed benchmark levels for each of the multifamily goals.
The multifamily housing goals are measured based on the total
volume of affordable multifamily mortgage purchases rather than on a
percentage of multifamily mortgage purchases. Unlike the single-family
housing goals, performance on the multifamily housing goals is measured
solely against a benchmark level, without any retrospective market
measure. The absence of a retrospective market measure for the
multifamily housing goals results, in part, from the lack of
comprehensive data about the multifamily mortgage market. Unlike the
single-family market, for which HMDA provides a reasonably
comprehensive dataset about single-family mortgage originations each
year, the multifamily market (including the affordable multifamily
market segment) has no comparable source. Consequently, it can be
difficult to correlate different datasets that usually rely on
different reporting formats.
Another difference between the single-family and multifamily goals
is that there are separate single-family housing goals for home
purchase and refinancing mortgages, while the multifamily goals include
all Enterprise multifamily mortgage purchases,
[[Page 49319]]
regardless of the purpose of the loan. In addition, unlike the single-
family housing goals, the multifamily housing goals are measured based
on the total volume of affordable multifamily mortgage purchases rather
than on a percentage of multifamily mortgage purchases. The use of
total volumes, which FHFA measures by the number of eligible units,
rather than percentages of each Enterprises' overall multifamily
purchases, requires that FHFA take into account the expected size of
the overall multifamily mortgage market and the affordable share of the
market, as well as the expected volume of the Enterprises' overall
multifamily purchases and the affordable share of those purchases. The
lack of comprehensive data for the multifamily mortgage market is even
more acute with respect to the segments of the market that are targeted
to low-income families, defined as families with incomes at or below 80
percent of AMI, and very low-income families, defined as families with
incomes at or below 50 percent of AMI. As required by the Safety and
Soundness Act, FHFA determines affordability of multifamily units based
on a unit's rent and utility expenses not exceeding 30 percent of the
area median income standard for low- and very low-income families.\19\
---------------------------------------------------------------------------
\19\ 12 U.S.C. 4563(c).
---------------------------------------------------------------------------
Current Economic Conditions, National Housing Needs, and Recent Market
Developments
Even as late as February 2020, the multifamily originations market
appeared as strong as it had been in 2019. At that time, FHFA noted a
number of trends that have continued for multiple years, including the
continued market focus on the construction of high-end, luxury
apartments and the steady decline in the number of low-cost rentals.
While completed rentals nearly reached a 30-year high in 2018 with an
addition of 360,000 units, supply dropped by 340,000 units between 2016
and 2017.\20\ Nationwide, there has been a loss of four million low-
cost rental units (rents less than $800 per month) since 2011.\21\
There is a particularly acute shortfall of affordable units for
extremely low-income renters (earning up to 30 percent of area median
income) that was acknowledged as a persistent problem even before the
COVID-19 pandemic began. For instance, as a recent report from the
Department of Housing and Urban Development \22\ notes, it is
increasingly difficult for housing developers and landlords to provide
decent rental housing at rates that are affordable to American working
families and more vulnerable households. In 2017, the most recent year
for which such data are available, only 59 affordable units were
available per 100 very low-income renter households, and only 40 units
were available per 100 extremely low-income renter households.
---------------------------------------------------------------------------
\20\ Joint Center for Housing Studies of Harvard University,
``The State of the Nation's Housing 2019,'' available at
www.jchs.harvard.edu/research/state_nations_housing.
\21\ Id.
\22\ U.S. Department of Housing and Urban Development, ``Worst
Case Housing Needs: 2019 Report to Congress'', June 19, 2020
accessed on 7/10/2020 at https://www.huduser.gov/PORTAL/sites/default/files/pdf/worst-case-housing-needs-2020.pdf.
---------------------------------------------------------------------------
The full impact on the stock of low-cost rental units in the wake
of the COVID-19 pandemic and broader economic downturn is not yet
known. In the short-term, the pandemic might exacerbate the already-
constrained supply as lower housing mobility rates limit the number of
low-cost options for renters and current residents stay in place. As
one study using the 2018 American Community Survey data shows, demand
for low-cost units was already high while their availability was
extremely low.\23\ Additional tightening at the low end of the market
could pose significant affordability challenges to low- and middle-
income renters.
---------------------------------------------------------------------------
\23\ Joint Center for Housing Studies of Harvard University,
``The Continuing Decline of Low-Cost Rentals,'' May 11, 2020
accessed on 6/30/2020 at https://www.jchs.harvard.edu/blog/the-continuing-decline-of-low-cost-rentals/.
---------------------------------------------------------------------------
Further, renters living in single-family homes and smaller
multifamily buildings, along with the owners of those properties, are
more likely to be negatively affected by the COVID-19 economic
downturn. According to one study, over half of renters with at-risk
wages \24\ due to the pandemic live in single-family rental housing
with 1-4 units. The same study estimates that nearly 20 percent of
renters in small multifamily (5 to 50 units) dwellings may have
difficulty paying full rent if at-risk wages are lost, compared to 12
percent of renters living in larger dwellings. This could, in turn,
make it difficult for the owners of those properties, who are more
likely to be small, individual investors, to remain financially stable
through the pandemic.\25\
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\24\ ``At risk wages'' are wages associated with ``At Risk
Jobs'' which are defined as those in services, retail, recreation,
transportation and travel, and oil extraction. Joint Center for
Housing Studies of Harvard University, ``Pandemic Will Worsen
Housing Affordability for Service, Retail, and Transportation
Workers'' March 30, 2020 accessed on 6/30/2020 at https://www.jchs.harvard.edu/blog/pandemic-will-worsen-housing-affordability-for-service-retail-and-transportation-workers/.
\25\ Joint Center for Housing Studies of Harvard University,
``COVID-19 Rent Shortfalls in Small Buildings,'' May 26, 2020
accessed on 6/30/2020 at https://www.jchs.harvard.edu/blog/covid-19-rent-shortfalls-in-small-buildings/.
---------------------------------------------------------------------------
Conservatorship Scorecard Caps
Enterprise performance on the multifamily housing goals is heavily
influenced by the caps on total multifamily business that FHFA has
established as conservator of the Enterprises. The multifamily volume
caps are intended to further FHFA's conservatorship goal: Maintaining
the presence of the Enterprises as a backstop for the multifamily
finance market, while not impeding the participation of private
capital. The multifamily volume caps reflect an Enterprise share of the
multifamily origination market that FHFA has determined to be an
appropriate market share for the Enterprises during normal market
conditions. The multifamily volume caps are intended to prevent the
Enterprises from crowding out other capital sources and restrain the
rapid growth of the Enterprises' multifamily businesses that started in
2011.
In September 2019, FHFA established multifamily loan purchase caps
at $100 billion for each Enterprise during the five quarters beginning
on October 1, 2019, and ending on December 31, 2020. The new cap
framework requires that each Enterprise meet a target of 37.5 percent
of its multifamily business as mission-driven, affordable housing.
There is significant overlap between the types of multifamily mortgages
that count toward the conservatorship scorecard target of 37.5 percent
and the multifamily mortgages that contribute to the performance of the
Enterprises under the affordable housing goals.
While the conservatorship scorecard caps and target level for
mission-driven loans play a significant role in determining the
multifamily purchase volume and affordable share for the Enterprise
multifamily businesses, the multifamily housing goals target specific
segments of the multifamily business and ensure appropriate Enterprise
focus on those segments as required by the Safety and Soundness Act. In
proposing benchmark levels for the Enterprise housing goals, FHFA has
considered the required statutory factors and is proposing benchmark
levels that would be achievable if the conservatorship scorecard caps
and target levels for 2021 are similar to the conservatorship scorecard
limits in effect for 2020. If the conservatorship scorecard has
established the multifamily purchase
[[Page 49320]]
volume caps applicable for 2021 at the time FHFA publishes a final rule
setting benchmark levels for the multifamily housing goals, FHFA may
adjust the benchmark levels based on those purchase volume caps.
Past Performance on the Multifamily Low-Income Housing Goal
The multifamily low-income housing goal is based on the total
number of rental units in multifamily properties financed by mortgages
purchased by the Enterprises that are affordable to low-income
families, defined as families with incomes less than or equal to 80
percent of the area median income. Since 2016, each Enterprise has
performed significantly above the benchmark level for the multifamily
low-income housing goal each year.
Table 6--Low-Income Multifamily Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year 2012 2013 2014 2015 2016 2017 2018 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Benchmark............................ 285,000 265,000 250,000 300,000 300,000 300,000 315,000 315,000
Freddie Mac Benchmark........................... 225,000 215,000 200,000 300,000 300,000 300,000 315,000 315,000
Fannie Mae Performance:
Low-Income Multifamily Units................ 375,924 326,597 262,050 307,510 352,368 401,145 421,813 * 384,572
Total Multifamily Units..................... 501,256 430,751 372,072 468,798 552,785 630,868 628,230 * 596,137
Low-Income % Total.......................... 75.0% 75.8% 70.4% 65.6% 63.7% 63.6% 67.1% * 64.5%
Freddie Mac Performance:
Low-Income Multifamily Units................ 298,529 254,628 273,434 379,042 406,958 408,096 474,062 * 455,451
Total Multifamily Units..................... 377,522 341,490 366,377 514,275 597,399 630,037 695,587 * 661,417
Low-Income % of Total Units................. 79.1% 74.6% 74.6% 73.7% 68.1% 64.8% 68.2% * 68.9%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.
Past Performance on the Multifamily Very Low-Income Housing Subgoal
The multifamily very low-income housing subgoal includes units
affordable to very low-income families, defined as families with
incomes no greater than 50 percent of area median income. Both
Enterprises have surpassed the benchmark level for the multifamily very
low-income housing subgoal by a significant margin in recent years.
Table 7--Very Low-Income Multifamily Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year 2012 2013 2014 2015 2016 2017 2018 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Benchmark............................ 80,000 70,000 60,000 60,000 60,000 60,000 60,000 60,000
Freddie Mac Benchmark........................... 59,000 50,000 40,000 60,000 60,000 60,000 60,000 60,000
Fannie Mae Performance:
Very Low-Income Multifamily Units........... 100,878 78,071 60,542 69,078 65,910 82,674 80,891 * 78,835
Total Multifamily Units..................... 501,256 430,751 372,072 468,798 552,785 630,868 628,230 * 596,137
Very Low-Income % of Total Units............ 21.7% 18.1% 16.3% 14.7% 11.9% 13.1% 12.9% * 13.2%
Freddie Mac Performance:
Very Low-Income Multifamily Units........... 60,084 56,742 48,689 76,935 73,030 92,274 105,612 * 112,785
Total Home Purchase Mortgages............... 377,522 341,490 366,377 514,275 597,399 630,037 695,587 * 661,417
Very Low-Income % of Total Units............ 15.9% 16.6% 13.3% 15.0% 12.2% 14.6% 15.2% * 17.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.
Past Performance on the Small Multifamily Low-Income Housing Subgoal
The small multifamily low-income housing subgoal is based on the
total number of units in small multifamily properties financed by
mortgages purchased by the Enterprises that are affordable to low-
income families, defined as families with incomes less than or equal to
80 percent of the area median income. A small multifamily property is
defined as a property with 5 to 50 units. Both Enterprises have met the
small multifamily low-income housing subgoal each year in recent years.
[[Page 49321]]
Table 8--Small (5-50) Low-Income Multifamily Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year 2012 2013 2014 2015 2016 2017 2018 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Low-Income Multifamily Benchmark.......... ........... ........... ........... 6,000 8,000 10,000 10,000 10,000
Fannie Mae Performance:
Small Low-Income Multifamily Units.......... 16,801 13,827 6,732 6,731 9,312 12,043 11,890 * 17,782
Total Small Multifamily Units............... 26,479 21,764 11,880 11,198 15,211 20,375 17,894 * 25,565
Low-Income % of Total Small Multifamily 63.5% 63.5% 56.7% 60.1% 61.2% 59.1% 66.4% * 69.6%
Units......................................
Freddie Mac Performance:
Small Low-Income Multifamily Units.......... 829 1,128 2,076 12,801 22,101 39,473 39,353 * 34,847
Total Small Multifamily Units............... 2,194 2,375 4,659 21,246 33,984 55,116 53,893 * 46,862
Low-Income % of Total Small Multifamily 37.8% 47.5% 44.6% 60.3% 65.0% 71.6% 73.0% * 74.4%
Units......................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.
Proposed Benchmark Levels for the Multifamily Housing Goals for 2021
FHFA is proposing to establish the benchmark levels for each of the
multifamily housing goal and subgoals for 2021 at the same levels that
applied for 2018-2020. In proposing the benchmark levels for the
multifamily low-income housing goal and the multifamily very low-income
housing goal, FHFA considered the statutory factors including current
economic conditions, national housing needs, recent market
developments, the most recent conservatorship scorecard cap levels, and
the past performance of the Enterprises in meeting each goal.
Due to the relatively low volume of small multifamily loans
purchased by each Enterprise, the conservatorship scorecard cap has
less impact on the ability of the Enterprises to meet the small
multifamily low-income housing goal. Based on the recent performance of
the Enterprises on the goal, FHFA believes the benchmark levels for
2018-2020 continue to be appropriate for 2021 to ensure that the
Enterprises maintain a meaningful presence in the market for small
multifamily loans.
While the recent performance of the Enterprises on the multifamily
housing goals suggests that each Enterprise may be able to meet a
higher benchmark level, FHFA has also considered a variety of factors
including recent market trends and especially the economic disruption
due to the COVID-19 emergency that support keeping the benchmark levels
for the multifamily housing goals at the same level as the 2018-2020
goals. Based on the above factors, FHFA believes that extending the
benchmark levels from 2020 to 2021 \26\ will provide achievable yet
challenging targets for the Enterprises.
---------------------------------------------------------------------------
\26\ The benchmark level for the Low-Income Areas Purchase goal
will be set by FHFA notice in 2021 pursuant to 12 CFR 1282.12(e).
The Low-Income Areas Purchase goal has a disaster component that is
dependent on the Federal disaster declarations in place at the
beginning of each calendar year. The regulation defines ``designated
disaster area'' as ``any census tract that is located in a county
designated by the federal government as adversely affected by a
declared major disaster administered by FEMA, where individual
assistance payments were authorized by FEMA.'' 12 CFR 1282.1
(emphasis added). While most of the country has been declared a
disaster area by reason of COVID-19, those declarations have not
been accompanied by FEMA authorizations of individual assistance
payments.
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VI. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. 3501 et seq.) requires that
regulations involving the collection of information receive clearance
from the Office of Management and Budget (OMB). The proposed rule does
not contain any information collection requirement that would require
OMB approval under the Paperwork Reduction Act. Therefore, FHFA has not
submitted the rule to OMB for review.
VII. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that
a regulation that has a significant economic impact on a substantial
number of small entities, small businesses, or small organizations must
include an initial regulatory flexibility analysis describing the
regulation's impact on small entities. Such an analysis need not be
undertaken if the agency has certified that the regulation will not
have a significant economic impact on a substantial number of small
entities. 5 U.S.C. 605(b). FHFA has considered the impact of the
proposed rule under the Regulatory Flexibility Act. The General Counsel
of FHFA certifies that the proposed rule, if adopted as a final rule,
will not have a significant economic impact on a substantial number of
small entities because the regulation applies only to Fannie Mae and
Freddie Mac, which are not small entities for purposes of the
Regulatory Flexibility Act.
List of Subjects in 12 CFR Part 1282
Mortgages, Reporting and recordkeeping requirements.
Authority and Issuance
For the reasons stated in the Supplementary Information, under the
authority of 12 U.S.C. 4511, 4513, and 4526, FHFA proposes to amend
part 1282 of Title 12 of the Code of Federal Regulations as follows:
CHAPTER XII--FEDERAL HOUSING FINANCE AGENCY
SUBCHAPTER E--HOUSING GOALS AND MISSION
PART 1282--ENTERPRISE HOUSING GOALS AND MISSION
0
1. The authority citation for part 1282 continues to read as follows:
Authority: 12 U.S.C. 4501, 4502, 4511, 4513, 4526, 4561-4566.
[[Page 49322]]
0
2. Section 1282.12 is amended by revising paragraphs (c)(2), (d)(2),
(f)(2), and (g)(2) to read as follows:
Sec. 1282.12 Single-family housing goals.
* * * * *
(c) * * *
(2) The benchmark level, which for 2021 shall be 24 percent of the
total number of purchase money mortgages purchased by that Enterprise
in each year that finance owner-occupied single-family properties.
(d) * * *
(2) The benchmark level, which for 2021 shall be 6 percent of the
total number of purchase money mortgages purchased by that Enterprise
in each year that finance owner-occupied single-family properties.
* * * * *
(f) * * *
(2) The benchmark level, which for 2021 shall be 14 percent of the
total number of purchase money mortgages purchased by that Enterprise
in each year that finance owner-occupied single-family properties.
(g) * * *
(2) The benchmark level, which for 2021 shall be 21 percent of the
total number of refinancing mortgages purchased by that Enterprise in
each year that finance owner-occupied single-family properties.
* * * * *
0
3. Section 1282.13 is amended by revising paragraphs (b) through (d) to
read as follows:
Sec. 1282.13 Multifamily special affordable housing goal and
subgoals.
* * * * *
(b) Multifamily low-income housing goal. The benchmark level for
each Enterprise's purchases of mortgages on multifamily residential
housing affordable to low-income families shall be at least 315,000
dwelling units affordable to low-income families in multifamily
residential housing financed by mortgages purchased by the Enterprise
for 2021.
(c) Multifamily very low-income housing subgoal. The benchmark
level for each Enterprise's purchases of mortgages on multifamily
residential housing affordable to very low-income families shall be at
least 60,000 dwelling units affordable to very low-income families in
multifamily residential housing financed by mortgages purchased by the
Enterprise for 2021.
(d) Small multifamily low-income housing subgoal. The benchmark
level for each Enterprise's purchases of mortgages on small multifamily
properties affordable to low-income families shall be at least 10,000
dwelling units affordable to low-income families in small multifamily
properties financed by mortgages purchased by the Enterprise for 2021.
Mark A. Calabria
Director, Federal Housing Finance Agency.
[FR Doc. 2020-15959 Filed 8-12-20; 8:45 am]
BILLING CODE 8070-01-P
