New affordable housing benchmarks proposed by the Federal Housing Finance Agency (FHFA) are the latest policy change to try and boost the share of minority homeowners.
The proposed rule would set higher requirements for Fannie Mae and Freddie Mac loan purchases in minority and low-income Census tracts. If Fannie Mae and Freddie Mac do not make the proposed goals, which would take effect starting in 2022, they could be subject to enforcement action or penalties from their regulator, the FHFA.
That’s not far outside the realm of possibility: In the last 11 years, Fannie Mae has missed its low-income purchase goals three times and flubbed its very low income goals five times. Freddie Mac has missed its low and very low income goals five times each since 2010, per FHFA’s report on their performance.
Stakeholders have two months to comment on the proposal. But some were ready to share their initial thoughts.
Scott Olson, the executive director of the Community Home Lenders Association, said that this latest step is “validation that the new sheriff in town, FHFA, is focused on access to credit, and making sure Fannie and Freddie are actively doing well in terms of reaching low and moderate income families.”
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