Responsible oversight of Fannie Mae and Freddie Mac, ensuring the safety and soundness of the Federal Home Loan Bank system, and efficient management of U.S. federal housing operations are among the goals laid out by the Federal Housing Finance Agency in its new five-year strategic for U.S. housing.
The plan, for fiscal years 2026-2030, has been issued for public commentary, which is due by Nov. 5.
To ensure the safety and soundness of the GSEs, FHFA will conduct risk-focused supervision and examination work, including:
- Ensuring regulated entity compliance with applicable laws and regulations and adherence to financial standards;
- Developing and administering supervisory tests, as appropriate;
- Monitoring emerging risks, industry trends, supervisory standards, and macroeconomic market conditions to inform risk assessments and adjust supervisory approaches, when appropriate
Management of the GSEs will include:
- Communication of annual objectives, expectations, and priorities to the boards and management
- Monitoring of boards and board-level committees
- Assessment of performance against FHFA priorities and objectives
Also critical in the responsible oversight of the GSEs will be identifying and combatting fraud and misconduct and reducing unnecessary regulatory burdens, the proposed strategic plan said.
Ensuring Safety and Soundness
Many of the safety and soundness guidelines overlap those of responsible oversight, with risk-based supervision and combatting fraud two of the main objectives.
Other safety and soundness objectives include ensuring that the FHLBanks fulfill their statutory responsibilities and encouraging efforts to expand housing supply to meet national demand.
To efficiently manage operations, FHFA plans to:
- Develop and strengthen internal controls and risk management to ensure compliance and sound operational resilience;
- Produce financial statements that demonstrate a commitment to compliance, transparency and accountability
- Execute an employee performance management system that drives a high-performance, high accountability culture;
- Comply with Executive Orders and other related guidance promoting accountability, cost effectiveness, and operational efficiency.
“This focus on “efficiency” could be a very positive for multi-family projects,” said Rick Porras, CFO of Neology Group, a Miami, FL-based real estate development firm. “Currently, timelines in having projects approved and funded can take upwards of nine months from the start of the application process to final approval. Traditional lenders can do the entire process in as little as two months. Many developers simply do not have the time to invest in this long process. Aside from the extended timeline, receiving approval could even delay the project’s ground-breaking, which would be a deal breaker for most developers.”
