The Federal Housing Finance Agency (FHFA) is seeking comments on a proposal for the Duty-to-Serve provisions of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008, which requires Fannie Mae and Freddie Mac (the GSEs) to serve three specified underserved markets: manufactured housing, affordable housing preservation and rural markets.
The GSEs would be required to adopt plans to improve the distribution and availability of mortgage financing in a safe and sound manner for residential properties that serve very low-, low- and moderate-income families within the three markets.
“The Federal Housing Finance Agency (FHFA) is issuing and seeking comments on a proposed rule that would provide Duty-to-Serve credit for eligible [GSE] activities that facilitate a secondary market for mortgages related to: manufactured homes titled as real property; blanket loans for certain categories of manufactured housing communities; (and) preserving the affordability of housing for renters and homebuyers and housing in rural markets. The proposed rule would establish a method for evaluating and rating the [GSEs’] compliance with the Duty to Serve each underserved market,” the agency’s notice of proposed rulemaking stated.
The FHFA expects the GSEs to show tangible results in each underserved market and to be a catalyst for mortgage lending to very low-, low- and moderate-income families. The GSEs should expect mortgage purchases and activities pursuant to the Duty to Serve to earn a reasonable economic return, which may be less than the return earned on activities that do not serve these underserved markets.
Each GSE would be required to prepare an Underserved Markets Plan identifying the activities and related objectives in each underserved market that it will pursue to serve that market. Each plan would be mandatory and have a three-year term.
FHFA invites interested parties to submit comments on all aspects of the proposed rule within 90 days of publication in the Federal Register via FHFA.gov.