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The Federal Housing Finance Agency has proposed new housing goals for Fannie Mae and Freddie Mac that would increase the share of mortgages purchased by the government-sponsored enterprises in minority and low-income neighborhoods.

The proposal, which would set housing goals for 2022 through 2024, is designed to ensure that Fannie Mae and Freddie Mac “responsibly promote equitable access to affordable housing that reaches low- and moderate-income families, minority communities, rural areas, and other underserved populations,” the FHFA said in a statement this week.

The FHFA has proposed replacing an existing subgoal for single-family purchase mortgages in low-income areas with two new subgoals for minority communities and low-income neighborhoods.

The subgoal for single-family purchase mortgages in minority communities would look at whether the borrower has an income at or below area median income and whether the property is in a census tract where the median income is below AMI and minorities make up at least 30 percent of the population.

“The new subgoal for minority census tracts was designed to help preserve and support affordable housing in communities of color,” FHFA Acting Director Sandra L. Thompson said in the statement. “The subgoal benefits families at or below area median income, allowing them to stay in the communities they helped build. 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.”

In addition to changing goals for single-family purchase mortgages, the proposal would also increase Fannie and Freddie’s refinancing target for low-income borrowers from the current benchmark of 21 percent to 26 percent of purchases.

The FHFA is accepting comments on the proposal for 60 days.

FHFA Seeks to Up GSE Minority Homebuying Targets

by Banker & Tradesman time to read: 1 min