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New GSE Initiative Aims to Close the Housing Gap

In a move to further create housing opportunities for all, the Federal Housing Finance Agency (FHFA) has proposed housing goals for Fannie Mae and Freddie Mac (the GSEs) for 2022 to 2024. The proposed goals are designed to ensure the GSEs responsibly promote fair access to affordable housing that reaches low- and moderate-income families, minority communities, rural areas, and other underserved populations.

This year, FHFA is proposing two new single-family home purchase subgoals to replace the existing low-income areas subgoal. One new subgoal targets minority communities; the other continues to target low-income neighborhoods.

The new minority census tract subgoal is designed to improve access to fair and sustainable mortgage financing in communities of color. A mortgage qualifies under the new subgoal if:

  • The borrower has an income at or below area median income (AMI); and
  • The property is in a census tract where the median income is at or below AMI, and minorities make up at least 30% of the population.

“The new subgoal for minority census tracts was designed to help preserve and support affordable housing in communities of color. The subgoal benefits families at or below area median income, allowing them to stay in the communities they helped build," said FHFA Acting Director Sandra L. Thompson. “The Enterprises' housing goals over the next three years should support equitable access to sustainable affordable housing opportunities in a safe and sound manner that bolsters the health of communities."

Single-Family Housing Goals


To meet a single-family housing goal or subgoal, the percentage of mortgage purchases by a GSE in that category must exceed either the benchmark level set in advance by FHFA or the market level for that year. The market level is determined retrospectively each year, based Home Mortgage Disclosure Act (HMDA) data showing the actual goal-qualifying share of the overall market, as measured by FHFA.

Multifamily Housing Goals

To meet a multifamily housing goal or subgoal, a GSE must purchase mortgages on multifamily properties (properties with five or more units) with rental units affordable to families in each category. FHFA measures GSE multifamily goals performance against benchmark levels set in advance.

While the GSEs remain in conservatorship, 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 GSEs and to assess their performance under the housing goals each year during conservatorship.

"FHFA’s new housing goals for Fannie Mae and Freddie Mac are an important step towards increasing liquidity of the affordable housing mortgage market," said David M. Dworkin, President and CEO, National Housing Conference (NHC). "They will significantly improve the impact Fannie Mae and Freddie Mac have on home mortgage lenders’ ability to increase homeownership opportunities to historically underserved communities. They are also well within historic risk levels to ensure the Enterprises operate safely and soundly while protecting homebuyers from taking irresponsible risks."

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

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