The Federal Housing Finance Agency (FHFA) released a final rule that updates the procedure for requiring an action plan in the event that an Enterprise fails to meet specific goals and sets new affordable housing targets for the loan purchases of Fannie Mae and Freddie Mac (the Enterprises) over the next three years.
The housing goals, which are typically established by FHFA regulations every three years, establish yearly benchmarks for the Enterprises’ acquisitions in 2025–2027 to promote fair housing access for low-income families and families in low-income communities.
| Single-Family Goals (percentage of overall qualified single-family loan purchases) | |
|---|---|
| Single-Family Goals | Benchmark Level 2025–2027 |
| Low-Income Home Purchase Goal | 25% |
| Very Low-Income Home Purchase Goal | 6% |
| Minority Census Tracts Home Purchase Subgoal | 12% |
| Low-Income Census Tracts Home Purchase Subgoal | 4% |
| Low-Income Refinance Goal | 26% |
“The affordable housing goals better enable the Enterprises to effectively advance their missions and support housing finance markets in a safe and sound manner,” said Sandra L. Thompson, FHFA Director. “It is critical that the Enterprises meet these goals, as required by law and regulation.”
The benchmark level or real market level of loans for each category shown in the table below must be met by the Enterprises in order to accomplish the single-family housing goals. Using data from the Home Mortgage Disclosure Act (HMDA), the real market level is calculated retroactively for the year.
To assist evaluate whether an Enterprise must create a housing strategy—an action plan that outlines how it will improve its performance—if it fails to meet specific single-family housing targets during the 2025–2027 cycle, the final rule also creates additional “measurement buffers.” If the Enterprise doesn’t reach a target and the difference between the Enterprise’s performance and the market level is more than the buffer specified in the final rule, a housing plan might be necessary.
To achieve the multifamily housing targets, the Enterprises must reach the benchmark levels. The percentage of units in multifamily buildings with loans that the enterprise has acquired that are affordable to renters in the corresponding income categories serves as the benchmark for the low-income and extremely low-income targets. The percentage of units in small (5–50 unit) multifamily properties that are affordable for low-income families is measured by a different subgoal.
| Multifamily Goals (percentage of overall qualified units) | |
|---|---|
| Multifamily Goals | Benchmark Level 2025–2027 |
| Low-Income Goal | 61% |
| Very Low-Income Goal | 14% |
| Low-Income Small (5–50 unit) Subgoal | 2% |
Three single-family home purchase goals and one refinance target must be set by the FHFA. Two more single-family home purchase subgoals have been created by FHFA specifically for low-income and minority census tracts.
The following are the definitions of the single-family refinance goal and the single-family home purchase goals and subgoals:
- Low-Income Home Purchase (LIP) Goal: This goal measures the share of each
Enterprise’s goal-qualifying purchase loans made to families with incomes no greater than 80% of Area Median Income (AMI). - Very Low-Income Home Purchase (VLIP) Goal: This goal measures the share of each
Enterprise’s goal-qualifying purchase loans made to families with incomes no greater than 50% of AMI. - Minority Census Tracts Purchase (MCT) Subgoal: This goal measures the share of each
Enterprise’s goal-qualifying purchase loans made to families with incomes no greater than 100% of AMI in minority census tracts. - Low-Income Census Tracts Purchase (LCT) Subgoal: This goal measures the share of
each Enterprise’s goal-qualifying purchase loans made to two subgroups: (1) families
(regardless of income) in low-income census tracts that are not minority census tracts, and (2)
families with incomes greater than 100% of AMI in low-income census tracts that are
also minority census tracts. - Low-Income Areas Home Purchase (LIA) Goal: This goal measures the shares of each
Enterprise’s goal-qualifying purchase loans that are included in the minority census tracts and
low-income census tracts subgoals, plus purchase mortgages made to families with incomes
no greater than 100% of AMI living in a federally-declared disaster area. - Low-Income Refinance (LIR) Goal: This goal measures the share of each Enterprise’s
goal-qualifying refinance loans made to families with incomes no greater than 80% of
AMI.
The final rule is effective February 28, 2025.
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