WASHINGTON—The Federal Housing Finance Agency (FHFA) has released Fannie Mae and Freddie Mac's Underserved Markets Plans for 2018-2020.
The government-sponsored enterprises' (GSEs) final plans include their launch into chattel loan pilot programs, which NAFCU has urged be approached "in a slow and steady manner.”
Under the FHFA's final duty-to-serve rule, Fannie Mae and Freddie Mac are required to adopt plans to improve the distribution and availability of mortgage financing for residential properties that serve very low-, low- and moderate-income families in three specified underserved markets: manufactured housing, affordable housing preservation and rural housing. These plans will become effective Jan. 1.
In a July letter responding to the proposed plans, NAFCU Regulatory Affairs Counsel Ann Kossachev requested that the FHFA closely evaluate the GSEs proposals with regard to the regulatory activities laid out in their plans – including chattel lending and the purchasing of affordable housing and rural housing loans from small financial institutions – to ensure that "credit unions' vital role in these markets is recognized and their access to the secondary mortgage market is expanded."
Kossachev had also raised concerns about the number of rural housing loans the GSEs plan to purchase and requested the GSEs work more closely with credit union lenders and aggregators; both GSEs' final plans reflect NAFCU's recommendations, the trade association said. Fannie Mae plans to increase its rural loan purchases each year to hit as many as 21,000 in 2020, while Freddie Mac plans to increase its purchases to as many as 6,000.
Fannie Mae also has a specific goal to meet with a credit union service organization or a large aggregator to help small financial institutions access the secondary market in this area, while Freddie Mac notes the importance of increasing engagement with small financial institutions to meet its rural markets goals, NAFCU noted.