As mandated by the Federal Housing Finance Agency (FHFA), government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac have published their final Duty to Serve Underserved Markets plans, which outline their ongoing efforts to give lower-income Americans greater access to affordable housing.
Although the plans set out to achieve the same general goal, each takes a slightly different approach. As per the FHFA’s mandate, the three main areas of focus include exploring new financing options for manufactured housing; preserving affordable housing, including keeping established affordable properties available as low-cost housing alternatives; and improving housing finance for high-needs rural regions and populations.
“This is an important milestone in Fannie Mae’s ongoing efforts to improve access to mortgage financing and create affordable housing opportunities for people of modest means across the country,” says Jeffery Hayward, executive vice president and head of multifamily for Fannie Mae, in a statement.
“Our plan will use analysis, testing, innovative partnerships and loan purchases to serve markets that need help the most. We are excited to expand on our mission to make affordable housing options available to Americans in all markets and enhance our efforts to identify solutions to the tough challenges that underserved markets face.”
The GSEs put their respective plans out for public comment in May. The final plans represent feedback from the public, the industry and the FHFA.
Freddie Mac’s plan is broken down into multifamily and single-family plans and includes the following highlights:
Multifamily
- Re-entering the Low-Income Housing Tax Credit (LIHTC) equity market;
- Increasing liquidity for developers that qualify for federal subsidies, including Section 8 vouchers;
- Preserving affordable units by supporting the U.S. Department of Agriculture’s (USDA) housing programs; and
- Expanding support for manufactured housing communities, including solutions that increase tenant protections.
Single-Family
- Developing a new renovation mortgage product to help rehabilitate aging housing stock;
- Increasing liquidity for manufactured housing loan originators by purchasing loans titled as real property and personal property; and
- Supporting energy efficiency initiatives and shared equity programs, which help preserve home affordability.
“For more than 45 years, our innovations have brought liquidity, stability and affordability to the mortgage markets, and Duty to Serve is an important continuation of those efforts,” says David D. Leopold, vice president of targeted affordable sales and investments at Freddie Mac Multifamily, in a statement. “Freddie Mac is uniquely suited to tackle some of America’s most persistent housing problems, and we look forward to deepening this work.”
“We’re developing responsible solutions to help make ‘home possible’ for more American families,” adds Danny Gardner, vice president of single-family affordable lending at Freddie Mac. “Addressing the affordability crisis today will benefit our country for decades to come.”
The three-year plans take effect on Jan. 1, 2018.
To access highlights of Freddie Mac’s plan, click here, and for the full plan, click here.
To access Fannie Mae’s full plan, click here.