Enterprise Urges FHFA to Increase the Affordable Housing Goals for Fannie Mae and Freddie Mac
Today the Enterprise Policy Team submitted comments to the Federal Housing Finance Agency (FHFA) in response to the proposed affordable housing goals for Fannie Mae and Freddie Mac for 2015-2017. Since the early 1990s, the federal government has set annual targets for Fannie- and Freddie-backed single-family and multifamily lending to low- and very low-income communities.
Among other provisions, FHFA’s proposed rule would steadily increase Freddie’s low-income and very low-income multifamily production goals, while keeping Fannie’s goals steady. FHFA also proposes new goals for affordable small multifamily lending at both companies.
Considering FHFA’s expectations for the multifamily market in the coming years, as well as the agency’s new strategic priority of supporting “multifamily housing needs with a focus on the affordable and underserved segments of the market,” we make the following recommendations to strengthen the affordable housing goals:
- Increase the low-income and very low-income multifamily goals to ensure that the Fannie and Freddie are incentivized to expand, or at least maintain, their current support to affordable rental housing.
- Provide guidance to Fannie and Freddie as they continue to develop the products necessary to expand their small multifamily businesses, with a focus on promoting competitiveness while protecting taxpayers from excessive risks.
- Consider awarding “bonus” credit for affordable multifamily loans that incorporate basic energy-efficiency standards and affordable small multifamily loans in particularly underserved segments of the market, such as secondary and tertiary markets, high-poverty neighborhoods and rural and tribal communities.
We also make clear that the affordable housing goals, while critical, must be part of a broader strategy for meeting FHFA’s goal of supporting the “affordable and underserved segments” of the multifamily market. Such a strategy must also include lifting the suspension of Fannie’s and Freddie’s legal obligations to fund the National Housing Trust Fund and the Capital Magnet Fund, finalizing the long-delayed Duty to Serve regulations and working with both companies to develop innovative new products for meeting the needs of low- and very low-income renters.