FHFA extends comment period on GSE capital proposal

WASHINGTON — The Federal Housing Finance Agency is extending the comment period for a proposal to implement minimum capital requirements for the mortgage giants Fannie Mae and Freddie Mac.

The deadline was extended about two months, from Sept. 17 to Nov. 16, to allow the public extra time to weigh in. In a press release, the agency said multiple stakeholders had requested more time to evaluate the proposal.

The proposal would assess credit risk for different mortgage categories and include components for market and operational risk.

Andrew Harrer/Bloomberg

The agency also sought comment on two different minimum leverage ratio requirements for the government-sponsored enterprises: one where the GSEs would be required to hold capital equal to 2.5% of assets and off-balance-sheet guarantees, and another that would require the GSEs to hold capital equal to 1.5% of trust assets and 4% of nontrust assets.

However, this proposal would not go into effect unless Fannie and Freddie were to be released from conservatorship. In the meantime, the agency said, the minimum capital requirements would provide more transparency to the public.

According to the Federal Register, 27 comments have been submitted in response to the proposal as of Tuesday.