Last week, the Federal Housing Finance Agency (FHFA) issued a final rule establishing the new housing goals for Fannie Mae (Fannie) and Freddie Mac (Freddie) over the next three years (2015-2017). The final rule creates new benchmarks for the purchase of both single-family mortgages and multifamily mortgages by Fannie and Freddie. The final rule also revises the housing goal regulations to provide greater clarity and transparency with respect to the mortgages that will qualify for the goals and/or subgoals.
The multifamily goal for both Fannie and Freddie was increased to 300,000 units for families of low income (i.e., income no greater than 80% of area median income). This is higher than the goal set for 2014 (250,000 units for Fannie and 200,000 units for Freddie) and higher than the goal provided in the proposed rule. FHFA cites (1) a larger multifamily market size in 2015 and (2) an expanded number of exclusions from the cap on the dollar volume of multifamily financing established by FHFA in the May 2015 Scorecard released by FHFA, as reasons for the increase in the overall benchmark level. The rule also sets the multifamily very low income subgoal for both Fannie and Freddie at 60,000 units for families with incomes not exceeding 50% of area median income. This benchmark level is the same for Fannie and higher for Freddie than it was in 2014 (40,000 units). FHFA also established a new subgoal targeted at small multifamily properties (i.e., 5 to 50 units), which is set at 6,000 units in 2015 and then increases by 2,000 units each year thereafter. These units must be affordable to families with incomes no greater than 80% of the area median income.