The Federal Housing Finance Agency on Wednesday officially increased the target for loans purchased by Fannie Mae and Freddie Mac that benefit affordable housing, but the uptick is not satisfying housing advocates.
Under the FHFA's final rule, the share of single-family loans purchased by the government-sponsored enterprises that benefit borrowers who are below median-income levels must rise by one percentage point to 24%.
Yet that figure is below the target of 28% urged by the National Community Reinvestment Coalition. In an interview, John Taylor, the NCRC's chief executive, expressed concern that new affordable housing goals don't put enough pressure on the GSEs and lenders to increase financing for low-income homebuyers.
"Fannie Mae and Freddie Mac have enormous potential to lead the market on access to credit for low- and moderate-income families, and truly make a positive difference," Taylor said. "Unfortunately, FHFA has not set the goals for Fannie and Freddie to better serve working families and underserved communities."
Meanwhile, even though the FHFA had solicited comments on ways to change how Fannie and Freddie's compliance with the goals is measured, the final rule ultimately made no changes to the methodology. How many loans meet the target will still be determined by Home Mortgage Disclosure Act data.
However, the rule will bring about a significant change for multifamily affordable housing goals. For the first time ever, the targets for multifamily housing will be the same for Fannie as they are for Freddie. The multifamily targets for both were raised to 300,000 units. That is a 50,000-unit increase from the 2014 goal for Fannie and a 100,000-unit increase for Freddie.
The FHFA also created a new "subgoal" for low-income rental units in multifamily properties with less than 50 units. The two mortgage giants must each back at least 6,000 of these small rental property loans in 2015 and 8,000 in 2016.