Mortgage

FHFA objects to Fannie Mae and Freddie Mac’s underserved markets plans

FHFA objects to Fannie Mae and Freddie Mac’s underserved markets plans
Written by Publishing Team

The Federal Housing Finance Agency has registered a formal objection to Fannie Mae and Freddie Mac’s 2022-2024 plans to meet targets established by legislation that the two agencies must support disadvantaged communities.

The two government-sponsored companies that buy a large proportion of US mortgages will need to draft a review. duty of service Objectives for rural, factory and affordable housing in response.

“Neither company’s plan meets the DTS no-objection criterion for any of the three disadvantaged markets,” the FHFA said in a January 5 statement. All three underserved DTS markets.

Fannie and Freddie will be able to move forward with their current goals while they work on the revisions. The FHFA declined to provide additional comment beyond its statement about the types of changes that might be necessary to meet its criteria.

Both accredited delegates issued statements in response to the objection.

“We welcome the opportunity to enhance our DTS plan with input from the FHFA and will continue our ongoing work to serve these disadvantaged markets,” Fannie Mae said in an email.

“Since 2018, Freddie Mac has implemented innovative solutions for rural housing, manufactured housing, and maintaining affordable housing through our Duty of Service efforts,” Freddy Mac said in a separate email. We are committed to providing more impactful support to these underserved markets in our 2022-2024 plan.”

Service duty plans typically go through a review process. Those under review have raised some special objections from Alliance of Affordable Housing Groups last year. Among those objections were current concerns Capital Considerations Restrictions on targeted capital investments can hamper the ability of GSE companies to meet the needs of underserved communities. The alliance also reiterated its long-standing concern about the lack of a target that would bring GSE companies into the relatively low-cost market. chattel manufactured homes. The mortgage lenders Fannie and Freddie who work with them often aren’t comfortable offering these loans because they hold a personal property title rather than secured by real estate.

The Mortgage Markets Alliance, which raised concerns about the lack of a manufactured housing target and other aspects of its 2022-2024 disadvantaged market plans in a letter to the FHFA last year, has yet to convene to discuss the FHFA’s objection to the deadline. But one group member welcomed the FHFA’s work.

“We are very pleased with the FHFA’s decision to veto the Duty-to-Serve plans and hope that Fannie Mae and Freddie Mac will accept us by helping them refine their plans into something that can be bypassed,” Jim said. Gray, a senior fellow at the Lincoln Institute, in an email.

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