Fannie Mae and Freddie Mac are ramping up their efforts to address the needs of the United States’ most challenging housing markets and aid low-income households.
The government-sponsored enterprises (GSEs) announced their Underserved Markets Plans for 2018-2020 under the Duty to Serve provisions that were mandated by the Housing and Economic Recovery Act of 2008. These provisions require the GSEs to support three challenging markets: affordable housing preservation, rural housing, and manufactured housing. The plans become effective Jan. 1.
Freddie Mac’s plan includes increased loan purchases in these three markets as well as new products, research, and expanded consumer education.
“For more than 45 years, our innovations have brought liquidity, stability, and affordability to the mortgage markets, and Duty to Serve is an important continuation of those efforts,” said David Leopold, vice president of targeted affordable sales and investments at Freddie Mac Multifamily. “Freddie Mac is uniquely suited to tackle some of America’s most persistent housing problems, and we look forward to deepening this work.”
For Freddie Mac, highlights of the plan include re-entering the low-income housing tax credit (LIHTC) market; increasing liquidity for developers that qualify for federal subsidies, including Sec. 8 vouchers; supporting the U.S. Department of Agriculture’s housing programs to preserve affordable units; and expanding its support for manufactured housing communities.
Fannie Mae’s plan also expands its work to help very low- and moderate-income households access affordable housing. It also plans to re-enter the LIHTC market. In addition, it will support the financing of housing for targeted high-needs rural areas and populations; preserve established affordable housing properties; and explore financing options for manufactured housing.
“This is an important milestone in Fannie Mae’s ongoing efforts to improve access to mortgage financing and create affordable housing opportunities for people of modest means across the country,” said Jeffery Hayward, executive vice president and head of multifamily at Fannie Mae. “Our plan will use analysis, testing, innovative partnerships, and loan purchases to serve markets that need help the most.”
Under the conservatorship of the Federal Housing Finance Agency (FHFA), the GSEs’ plans will be subject to FHFA review and approval to ensure compliances with the enterprises’ charter acts, safety and soundness, and conservatorship and regulatory agreements, said the agency.
“I congratulate Fannie Mae, Freddie Mac, and FHFA staff for the work they’ve done to reach this significant milestone,” said FHFA director Mel Watt. “The rough challenges associated with implementation are still ahead, however, to ensure that the plans meet affordable housing needs in underserved markets around the country.”