The agency said their proposed plans fell short of the minimum standard for underserved markets. Learn more.
In early January, the Federal Housing Finance Agency (FHFA) rejected both Fannie Mae’s and Freddie Mac’s 2022-2024 Duty to Serve plans for failing to meet the minimum standard for any of the required underserved markets.
In response to the 2008 Great Recession, legislation was passed which established that the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac had a “duty to serve” very low-, low-, and moderate-income households in three particular markets:
- Manufactured housing
- Affordable housing preservation
- Rural markets
As the regulator of the GSEs, the FHFA requires that they each submit a plan every three years to outline specific goals for providing service to these households.
FHFA did not provide additional details regarding the reason for the recent rejection. However, a coalition of twenty affordable housing advocacy organizations wrote to FHFA Director Thompson in October 2021 arguing that the plans reduce loan purchases in the target markets and inexplicably drop key programs.
The status of these Duty to Serve plans has substantial implications for the rental industry. Between them, Fannie Mae and Freddie Mac may acquire up to $156 billion in multifamily loans in 2022. The GSEs’ current Duty Serve Plans will remain in effect until new ones have been created with stakeholder feedback.
For more information on housing finance policy, reach out to Ben Harrold, Manager of Public Policy.