2012-2014 Enterprise Housing Goals, 67535-67557 [2012-27121]

Agencies

• FEDERAL HOUSING FINANCE AGENCY

[Federal Register Volume 77, Number 219 (Tuesday, November 13, 2012)]
[Rules and Regulations]
[Pages 67535-67557]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27121]



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Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / 
Rules and Regulations

[[Page 67535]]



FEDERAL HOUSING FINANCE AGENCY

12 CFR Part 1282

RIN 2590-AA49


2012-2014 Enterprise Housing Goals

AGENCY: Federal Housing Finance Agency.

ACTION: Final rule.

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SUMMARY: The Federal Housing Enterprises Financial Safety and Soundness 
Act of 1992 (Safety and Soundness Act) requires the Federal Housing 
Finance Agency (FHFA) to establish annual housing goals for mortgages 
purchased by the Federal National Mortgage Association (Fannie Mae) and 
the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, 
the Enterprises). FHFA previously established housing goals for the 
Enterprises through 2011. This final rule establishes new levels for 
the housing goals for 2012 through 2014, consistent with the 
requirements of the Safety and Soundness Act.

DATES: This rule is effective December 13, 2012.

FOR FURTHER INFORMATION CONTACT: Paul Manchester, Principal Economist, 
(202) 649-3115; Ian Keith, Senior Program Analyst, (202) 649-3114; 
Office of Housing and Regulatory Policy; Jay Schultz, Senior Economist, 
(202) 649-3117, Office of National Mortgage Database; Kevin Sheehan, 
Assistant General Counsel, (202) 649-3086, Office of General Counsel. 
These are not toll-free numbers. The mailing address for each contact 
is: Office of General Counsel, Federal Housing Finance Agency, Eighth 
Floor, 400 Seventh Street SW., Washington, DC 20024. The telephone 
number for the Telecommunications Device for the Hearing Impaired is 
(800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

A. Statutory and Regulatory Background

    The Safety and Soundness Act, as amended by the Housing and 
Economic Recovery Act of 2008 (HERA), provides for the establishment, 
monitoring and enforcement of housing goals for Fannie Mae and Freddie 
Mac.\1\ FHFA previously established housing goals for the Enterprises 
for 2010 and 2011 through a final rule published on September 14, 
2010.\2\
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    \1\ See 12 U.S.C. 4561-4566.
    \2\ See 75 FR 55892 (September 14, 2010).
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    Section 1332(a) of the Safety and Soundness Act requires FHFA to 
establish three single-family owner-occupied purchase money mortgage 
goals, one subgoal, and one single-family refinancing mortgage goal. 
The single-family housing goals target:
     Home purchase mortgages for
    [cir] Low-income families,
    [cir] Families that reside in low-income areas (goal and subgoal), 
and
    [cir] Very low-income families; and
     Refinancing mortgages for low-income families.\3\
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    \3\ See 12 CFR 1282.12.
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    Section 1333(a) of the Safety and Soundness Act requires FHFA to 
establish one multifamily special affordable housing goal, as well as 
providing for a multifamily special affordable housing subgoal. These 
target multifamily housing affordable to:
     Low-income families, and
     Very low-income families.\4\
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    \4\ See 12 CFR 1282.13.
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B. Conservatorship

    On September 6, 2008, the Director of FHFA appointed FHFA as 
conservator of the Enterprises to maintain the Enterprises in a safe 
and sound financial condition and to help assure performance of their 
public mission. The Enterprises remain under conservatorship at this 
time.
    Although the Enterprises' substantial market presence has been key 
to retaining market stability, neither company is capable of serving 
the mortgage market today without the ongoing financial support 
provided by the U.S. Department of the Treasury (Treasury) under their 
respective Senior Preferred Stock Purchase Agreements (Agreements). 
FHFA has projected a range of substantial cumulative draws in Treasury 
support under the Agreements through 2014. While reliance on the 
Treasury Department will continue until legislation produces a final 
resolution to the Enterprises' future, FHFA is monitoring the 
activities of the Enterprises to: (a) Minimize losses on the mortgages 
already on their books; (b) ensure profitability in the new book of 
business without deterring market participation or hindering market 
recovery; and (c) limit their risk exposure by avoiding new products 
and lines of business.
    While the Enterprises are in conservatorship, all Enterprise 
activities, including those in support of affordable housing, must be 
consistent with the requirements of conservatorship under the Safety 
and Soundness Act, as amended by HERA. If FHFA determines that the 
Enterprise housing goals cannot be achieved consistent with the goals 
and requirements of conservatorship or in light of market conditions, 
FHFA, as conservator for each Enterprise, may take additional action, 
including suspension of the Enterprise housing goals until they can be 
achieved and in a manner consistent with the conservatorships. In the 
meantime, FHFA is continuing with the existing structure of the housing 
goals, including the market-based approach that was adopted for 2010 
and 2011, with new benchmark levels in place through 2014.

C. Prospective and Market-Based Approach

    The current housing goals regulation sets forth single-family 
housing goals for 2010-2011 that include: (1) An assessment of 
Enterprise performance, as compared to the actual share of the market 
that meets the criteria for each goal; and (2) a benchmark level to 
measure Enterprise performance. For the single-family housing goals, an 
Enterprise has met a goal if it achieves the benchmark level for that 
goal, even if the actual market size for the year is higher than the 
benchmark level. An Enterprise has failed to meet a goal if its annual 
performance falls below both the benchmark level and the actual share 
of the market that meets the criteria for a particular goal for that 
year. FHFA determined that this approach is appropriate in light of 
recent market turmoil, especially while the Enterprises are operating 
in conservatorship, and in light of the difficulty of making

[[Page 67536]]

projections accurately even in more stable economic environments. For 
those reasons too, and because the correspondence between available 
market data and the Enterprises' actual goals-qualifying activity is 
not exact, FHFA reserves some flexibility in determining whether an 
Enterprise has substantially complied with one or more goals.

II. Proposed Rule

    On June 11, 2012, FHFA published in the Federal Register a proposed 
rule to establish new levels for the Enterprise housing goals for 2012 
through 2014. The 45-day comment period closed July 26, 2012.\5\
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    \5\ See 77 FR 34263 (June 11, 2012).
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A. Summary of Comments

    FHFA received a total of 23 comments on the proposed rule; all are 
available on FHFA's Web site, https://www.fhfa.gov. Comments were 
received from six trade associations, ten housing or other advocacy 
organizations, five individuals, and both Enterprises. A number of the 
comments addressed issues specific to this rulemaking, including 
comments on the proposed benchmark levels for the single-family housing 
goals, comments on the proposed levels for the multifamily housing 
goals, and comments on the treatment of certain multifamily properties 
under the housing goals. These comments are discussed in more detail in 
the sections below pertaining to each of these issues.
    FHFA also received comments on issues that were outside the scope 
of this rulemaking. For example, FHFA received comments recommending, 
among other things: (1) That chattel (personal property) mortgages on 
manufactured housing should count toward the housing goals; (2) that 
FHFA should award goals credit to the Enterprises for ``prioritizing 
their relationship'' with housing finance agencies; (3) that FHFA 
should establish a subgoal to the low-income refinance goal for low-
income loan modifications; and (4) that FHFA should take into account 
forthcoming regulations with regard to ``qualified mortgages'' and 
``qualified residential mortgages.'' In addition, FHFA received 
comments addressing issues not related to the Enterprise housing goals. 
FHFA has reviewed all comments received in response to the proposed 
rule, but comments that raised issues beyond the scope of the proposed 
rule are not addressed in this final rule.

B. Use of Term ``Minority''

    FHFA received one comment letter from an advocacy organization 
questioning the use of the term ``minority'' in the proposed rule. FHFA 
has determined that the consideration of race in establishing the 
housing goals is appropriate and necessary to address specific 
provisions in the Safety and Soundness Act.
    Specifically, section 1332(a) of the Safety and Soundness Act 
requires the Director to establish a single-family housing goal for 
families that reside in low-income areas, which are defined in section 
1303 of the Safety and Soundness Act to include low- and moderate-
income families in census tracts where at least 30 percent of the 
population consists of minorities. In order for FHFA to establish the 
housing goal for families that reside in low-income areas, it is 
necessary for FHFA to consider the distribution of minorities among 
different census tracts.

III. Summary of Final Rule

    The final rule establishes new benchmark levels for the single-
family housing goals for 2012, 2013 and 2014.\6\ The final rule lowers 
the benchmark levels for these goals from those in effect for 2010 and 
2011, but raises the low-income home purchase goal level above the 
level in the proposed rule, and lowers the low-income refinance goal 
level from that in the proposed rule. The final rule also establishes 
new levels for the multifamily housing goals for 2012-2014. Both 
Enterprises exceeded the multifamily housing goal levels for 2011, and 
the final rule increases those goal levels above the 2010-2011 levels. 
However, in light of uncertainty about the multifamily market, and the 
Enterprises' role in that market, the goal levels for 2013 are set 
below the 2012 level, and are further decreased for 2014. The final 
rule does not make any other changes to the housing goals that have 
been in effect since 2010.
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    \6\ The low-income areas goal in a given year includes 
Federally-declared disaster areas from the previous three years, 
thus this goal will not be determined for 2013 until January 2013 
and for 2014 until January 2014.
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    Specifically, the proposed and final goals are:

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                                       2012         2013         2014
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Low-income home purchase goal:
    Proposed rule................  ...........          20%  ...........
    Final rule...................  ...........          23%  ...........
Very-low income home purchase
 goal:
    Proposed rule................  ...........           7%  ...........
    Final rule...................  ...........           7%  ...........
Low-income areas home purchase
 subgoal:
    Proposed rule................  ...........          11%  ...........
    Final rule...................  ...........          11%  ...........
Low-income areas home purchase
 goal:
    Proposed rule................          20%           NA           NA
    Final rule...................          20%           NA           NA
Low-income refinance goal:
    Proposed rule................  ...........          21%  ...........
    Final rule...................  ...........          20%  ...........
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    Multifamily special affordable goals (low-income units):

[[Page 67537]]



------------------------------------------------------------------------
                                       2012         2013         2014
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Fannie Mae:
    Proposed rule................      251,000      245,000      223,000
    Final rule...................      285,000      265,000      250,000
Freddie Mac:
    Proposed rule................      191,000      203,000      181,000
    Final rule...................      225,000      215,000      200,000
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    Multifamily special affordable subgoals (very low-income units):

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                                       2012         2013         2014
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Fannie Mae:
    Proposed rule................       60,000       59,000       53,000
    Final rule...................       80,000       70,000       60,000
Freddie Mac:
    Proposed rule................       32,000       31,000       27,000
    Final rule...................       59,000       50,000       40,000
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IV. Single-Family Housing Goals

A. Analysis of Factors for Single-Family Housing Goals

    Section 1332(e)(2) of the Safety and Soundness Act requires FHFA to 
consider the following seven factors in setting the single-family 
housing goals:
    (1) National housing needs;
    (2) Economic, housing, and demographic conditions, including 
expected market developments;
    (3) The performance and effort of the Enterprises toward achieving 
the housing goals under this section in previous years;
    (4) The ability of the Enterprise to lead the industry in making 
mortgage credit available;
    (5) Such other reliable mortgage data as may be available;
    (6) The size of the purchase money conventional mortgage market, or 
refinance conventional mortgage market, as applicable, serving each of 
the types of families described, relative to the size of the overall 
purchase money mortgage market or the overall refinance mortgage 
market, respectively; and
    (7) The need to maintain the sound financial condition of the 
Enterprises.\7\
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    \7\ 12 U.S.C. 4562(e)(2).
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    FHFA's consideration of the size of the market for each housing 
goal includes consideration of the percentage of goal-qualifying 
mortgages under each housing goal, as calculated based on Home Mortgage 
Disclosure Act (HMDA) data for the three most recent years for which 
data is available.\8\ FHFA's analysis of each of the factors, which has 
been updated since the proposed rulemaking, is set forth below.
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    \8\ See 12 U.S.C. 4562(e)(2)(A).
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1. National Housing Needs
    The recent single-family housing market has been characterized by 
falling homeownership rates, high vacancy rates, weak sales, lower home 
prices, high foreclosure rates, and stricter underwriting. These trends 
are likely to continue in the near term. In many instances, they have 
had differing impacts for homeowners and home seekers of different 
ethnicities. Despite demand spurred by the ``First Time'' and ``Move Up 
Home Buyer'' tax credits in 2009 and 2010, the seasonally adjusted 
overall U.S. homeownership rate was 65.6 percent in the second quarter 
of 2012, after peaking at 69.1 percent in 2004. The homeownership rate 
for non-Hispanic whites declined from a peak of 76 percent in 2004 to 
73.5 percent in the second quarter of 2012. For black households, the 
decline was more pronounced, going from a peak of 49.1 percent in 2004 
to 43.8 percent in the second quarter of 2012. The homeownership rate 
for Hispanic households also had a noticeable decline, going from a 
peak of 49.7 percent in 2006 and 2007 to 46.5 percent in the second 
quarter of 2012.
    The homeowner vacancy rate--the proportion of housing inventory for 
homeowners that is vacant and for sale--dropped slightly to 2.1 percent 
in the second quarter of 2012, from a record high of 2.9 percent in 
2008. But the vacancy rate may not fully capture the inventory of 
distressed and at-risk homes that have not yet completed the 
foreclosure process, but will add to the housing supply.\9\
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    \9\ See generally, Daniel Indiviglio, ``The `Shadow' Foreclosure 
Inventory,'' The Atlantic (Sept. 23, 2009), available at https://www.theatlantic.com/business/archive/2009/09/the-shadow-foreclosure-inventory/27093/.
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    First-time homebuyers have experienced lower-priced housing. 
According to the 2011 National Association of Realtors (NAR) survey of 
homebuyers and sellers, the median age for first-time homebuyers was 31 
years, and the median income was $62,400. The typical first-time 
homebuyer purchased a $155,000 home, up from $152,000 in the 2010 
survey. Fifty-four percent of entry-level buyers financed their 
purchase with a Federal Housing Administration (FHA) loan, and 6 
percent used the Veterans Administration (VA) loan program.
    For 2011, NAR reported that existing home sales were up by 1.7 
percent from 2010, and sales through August 2012 are running an 
additional 7.4 percent above the 2011 level. New home sales for 2011, 
as reported by the Census Bureau, were down by 5.3 percent from 2010, 
but sales through August 2012 are running at a rate of 18.1 percent 
above the 2011 level. A composite index of housing affordability for 
July 2012 showed that families earning the median income had 182.0 
percent of the income needed to purchase a median-priced existing 
single-family home, which is very high by historical standards.
    HMDA data for 2011, the most recent year for which such data are 
available, indicated that in comparison with 2010, applications for 
conventional home purchase loans from black borrowers fell by 1 
percent, following a 31 percent decrease in 2010. Applications by 
Hispanic borrowers increased by 2 percent in 2011, following a 34 
percent decrease in 2010. Applications from white borrowers were 
unchanged in 2011, following a 23 percent decrease in 2010.

[[Page 67538]]

    Denial rates for black and Hispanic applicants, however, decreased 
from 2009 to 2011. For black applicants, the denial rate dropped from 
32.3 percent in 2009 to 30.9 percent in 2010 and 2011, while the denial 
rate for Hispanics dropped from 25.6 percent in 2009 to 22.9 percent in 
2010 and 21.7 percent in 2011.\10\
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    \10\ See Board of Governors of the Federal Reserve, ``The 2009 
HMDA Data: The Mortgage Market in a Time of Low Interest Rates and 
Economic Distress,'' Federal Reserve Bulletin, available at https://www.federalreserve.gov/pubs/bulletin/2010/pdf/2009_HMDA_final.pdf; 
``The Mortgage Market in 2010: Highlights from the Data Reported 
under the Home Mortgage Disclosure Act,'' available at https://www.federalreserve.gov/pubs/bulletin/2011/pdf/2010_HMDA_final.pdf; 
and ``The Mortgage Market in 2011: Highlights from the Data Reported 
under the Home Mortgage Disclosure Act,'' available at https://www.federalreserve.gov/pubs/bulletin/2012/pdf/2011_HMDA.pdf.
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    Low housing prices impacted existing homeowners as the number of 
foreclosures and underwater mortgages--where a homeowner owes more than 
the value of the home--remained at elevated levels. Although the number 
of homes with foreclosure filings fell 34 percent relative to 2010, 1.9 
million homes were foreclosed on in 2011.\11\ Foreclosure figures 
likely would have been higher in 2011 had it not been for processing 
slowdowns as a result of concerns about foreclosure practices and 
documentation, including some state foreclosure rules that 
significantly lengthen foreclosure times. Some housing analysts project 
higher foreclosure rates in 2012, with a downward trend beginning in 
2013. As of the second quarter of 2012, the share of underwater 
mortgages was at a near-record high of 22.3 percent, and 4.7 percent of 
mortgaged homes had less than 5 percent equity.\12\ The concentration 
of underwater borrowers is even higher for non-Enterprise loans. FHFA 
has estimated that less than 10 percent of borrowers with Enterprise 
loans had negative equity in their homes (9.9 percent in June 2011), 
whereas loans backing private label securities were more than three 
times more likely to have negative equity (35.5 percent in June 
2011).\13\
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    \11\ See ``2011 Year-End Foreclosure Report: Foreclosures on the 
Retreat (January 9, 2012), available at https://www.realtytrac.com/content/foreclosure-market-report/2011-year-end-foreclosure-market-report-6984.
    \12\ See CoreLogic ``Q22012 Negative Equity Report,'' available 
at: https://www.corelogic.com/about-us/researchtrends/asset_upload_file486_16724.pdf.
    \13\ See https://www.fhfa.gov/webfiles/23056/PrincipalForgivenessltr12312.pdf.
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    According to the Mortgage Bankers Association (MBA), single-family 
mortgage activity totaled $363 billion in the first quarter of 2012, 
compared to $302 billion in the first quarter of 2011. Total 
originations in 2011 were $1,262 billion, with 68 percent of the total 
being refinancings.\14\
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    \14\ See https://www.mbaa.org/ResearchandForecasts/ForecastsandCommentary.
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    One result of the mortgage crisis is that the mortgage market now 
has stricter and less flexible lending standards. According to the 
Board of Governors of the Federal Reserve System's Senior Loan Officer 
Opinion Survey, underwriting standards tightened beginning in late 2006 
and have not significantly eased since that time.\15\ In the near term, 
underwriting standards can be expected to continue to be conservative. 
In addition, high vacancy rates, foreclosures and unemployment may 
continue to dampen the housing recovery.
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    \15\ Board of Governors of the Federal Reserve System, Senior 
Loan Officer Opinion Survey (November 7, 2011).
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    FHFA has considered the above data in assessing national housing 
needs as required by the Safety and Soundness Act. FHFA has concluded 
that it is not necessary to adjust the benchmark levels based 
specifically on this factor.
2. Economic, Housing and Demographic Conditions
    Increased role of FHA in the marketplace. The composition of the 
affordable conventional mortgage market is also influenced by FHA's 
market share. FHA loans generally are pooled into mortgage-backed 
securities (MBS) guaranteed by the Government National Mortgage 
Association (GNMA). Enterprise purchases of mortgages insured by FHA 
and mortgages guaranteed by VA generally do not receive housing goals 
credit. As a result, a higher FHA share of the market results in a 
smaller proportion of affordable loans among loans that can be counted 
for purposes of the housing goals. FHA's share of the market rose 
significantly during 2008 through 2010, reaching a share of the home 
purchase mortgage market of nearly 40 percent in 2010 before falling to 
30 percent in 2011, as measured by HMDA data. FHA announced last year 
an annual mortgage insurance (MI) premium increase of 25 basis points, 
effective April 18, 2011.\16\
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    \16\ See U.S. Dept. of Housing and Urban Development., Mortgagee 
Letter 11-10 (Feb. 14, 2011), available at https://portal.hud.gov/hudportal/documents/huddoc?id=11-10ml.pdf.
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    High unemployment. In addition to being an indicator of the health 
of the economy in general, labor market conditions affect the housing 
market more directly because buying a house is considered a large 
investment and a long-term commitment that requires stable employment. 
Nonfarm payroll employment increased by 114,000 in September 2012, 
following increases of 181,000 in July and 142,000 in August. The 
unemployment rate has steadily fallen from 9.1 percent in August 2011 
to 7.8 percent in September 2012. NeighborWorks, a national network of 
community-based organizations actively involved in foreclosure 
mitigation counseling, has estimated that the two leading causes of 
mortgage default rates were a reduction in income (37 percent of 
defaults) and loss of income (21 percent of defaults).\17\ To the 
extent that high unemployment rates impact lower-income wage earners 
more than higher-income wage earners, there could be fewer mortgage 
originations for goal-qualifying borrowers and, therefore, fewer such 
mortgages available for purchase by the Enterprises.
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    \17\ See NeighborWorks, ``National Foreclosure Mitigation 
Counseling Program--Congressional Update--Activity Through January 
31, 2010'' p. 41 (May 28, 2010), available at https://www.nw.org/network/nfmcp/documents/CongressionalReportandAppendices.pdf.
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    State of the refinance market. The size of the refinance mortgage 
market has an impact on the share of affordable refinance mortgages. 
Historically, refinance mortgage volume increases when the refinancing 
of mortgages is motivated by low interest rates, i.e., ``rate and term 
refinances,'' and this increased volume is dominated by higher-income 
borrowers. As a result, in periods of low interest rates, the share of 
lower-income borrowers will decrease. Likewise, refinancings that 
occurred when interest rates were high tended to have a higher 
proportion of lower-income homeowners who were consolidating their 
debts or who were drawing equity out of their homes for other uses. 
While there are fewer mortgage refinancings for both lower-income and 
higher-income borrowers during high interest rate periods, the decrease 
is larger for higher-income borrowers.
    In the current economic environment, lower-income homeowners tend 
to have less equity--or negative equity--in their homes because the 
prices of lower-valued homes have fallen more than the prices of 
higher-valued homes.\18\ At the same time, lenders have tightened 
underwriting requirements, requiring higher down payments and higher 
credit scores. As a result, fewer lower-income homeowners may be able 
to refinance in 2012 and 2013. In addition,

[[Page 67539]]

programs established in the wake of the financial crisis have affected 
refinancings. The Home Affordable Refinance Program (HARP), which 
became effective in March 2009 and was expanded in 2011, is an effort 
to enhance the opportunity for owners to refinance. Homeowners whose 
mortgages are owned or guaranteed by Fannie Mae or Freddie Mac and who 
are current on their mortgages have the opportunity to reduce their 
monthly mortgage payments to take advantage of historically low 
mortgage interest rates. An essential element of this program is the 
permission to carry forward into the new loan any existing MI from 
prior mortgages or, if no MI existed, none would be required for the 
refinanced mortgage. Even under favorable interest rate conditions, 
however, refinancings may not mirror previous years, thus FHFA is 
reducing the low-income refinance goal from 21 percent in the proposed 
rule to 20 percent in this final rule.
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    \18\ See The Joint Center for Housing Studies of Harvard 
University, ``The State of the Nation's Housing, 2011,'' p. 40 
(2011) (Table A-8), available at https://www.jchs.harvard.edu/research/publications/state-nation%E2%80%99s-housing-2011.
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3. The Performance and Effort of the Enterprises Toward Achieving the 
Single-Family Housing Goals in Previous Years
    Section 1332(a) of the Safety and Soundness Act, as amended by 
section 1128(b) of HERA, requires FHFA to establish three single-family 
owner-occupied home purchase mortgage goals for the Enterprises: A goal 
for low-income families; a goal for families that reside in low-income 
areas; and a goal for very low-income families. Section 1332(a) also 
requires FHFA to establish a goal for single-family refinancing 
mortgages for low-income families. The following section discusses the 
Enterprises' performance on these single-family goals in 2010-2011 and, 
to provide perspective, reviews what performance would have been on 
these four single-family goals had they been in effect from 2006 
through 2009.
    The figures shown in Tables 1-4 for 2010 and 2011 are official 
performance results as determined by FHFA, based on loan-level 
information submitted by the Enterprises. The housing goals in the 
Safety and Soundness Act, as amended, apply to the Enterprises' 
acquisitions of ``conventional, conforming, single-family, purchase 
money mortgages financing owner-occupied housing'' for the targeted 
groups. The figures exclude units financed by Enterprise purchases of 
private label securities (PLS), since such units were not counted 
toward the goals in 2010 or 2011.
    Low-Income Families Home Purchase Goal. The low-income families 
home purchase goal applies to mortgages made to ``low-income 
families,'' defined as families with incomes no greater than 80 percent 
of area median income (AMI).\19\ As indicated in Table 1, Fannie Mae's 
performance in 2011 (25.8 percent) was comparable to its performance in 
2010 (25.1 percent) and to what it would have been in 2009 (25.5 
percent), somewhat higher than it would have been in 2008 (23.1 
percent), and somewhat lower than it would have been in 2006 and 2007 
(27.7 percent and 26.0 percent). Freddie Mac's performance in 2011 
(23.3 percent) was below its performance in 2010 (26.8 percent) but 
comparable with what it would have been in any year from 2006-2009 
(22.1 percent-25.4 percent).
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    \19\ See 12 U.S.C. 4502(14).
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    Very Low-Income Families Home Purchase Goal. The very low-income 
families home purchase goal applies to mortgages made to ``very low-
income families,'' defined as families with incomes no greater than 50 
percent of AMI. In essence, this operates as a subgoal of the low-
income families housing goal, which applies to families with incomes no 
greater than 80 percent of AMI.
    As indicated in Table 2, Fannie Mae's performance in 2011 (7.6 
percent) was comparable to its performance in 2010 (7.2 percent) and to 
what it would have been in 2009 (7.3 percent), higher than it would 
have been in 2007 and 2008 (6.4 percent and 5.5 percent), and lower 
than it would have been in 2006 (7.7 percent). Freddie Mac's 
performance in 2011 (6.6 percent was below its performance in 2010 (7.9 
percent), but comparable with what it would have been in the 2006-2009 
period (5.3 percent-7.2 percent).
BILLING CODE 8070-01-P

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[GRAPHIC] [TIFF OMITTED] TR13NO12.000


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[GRAPHIC] [TIFF OMITTED] TR13NO12.001


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    Low-Income Areas Home Purchase Goal and Subgoal. Three categories 
of mortgages qualify for the low-income areas housing goal:
    (1) Home purchase mortgages for families in low-income census 
tracts, defined as tracts with median family income no greater than 80 
percent of AMI;
    (2) Home purchase mortgages for families with incomes no greater 
than 100 percent of AMI who reside in minority census tracts, defined 
as tracts with minority population of at least 30 percent and a median 
family income less than 100 percent of AMI; and
    (3) Home purchase mortgages for families with incomes no greater 
than 100 percent of AMI who reside in Federally-declared disaster areas 
(regardless of the minority share of the population in the tract or the 
ratio of tract median family income to AMI).
    FHFA established an overall goal for this category of home purchase 
mortgages of 24 percent for 2010-2011. As indicated in Table 3, Fannie 
Mae's performance in 2011 (22.4 percent) was below its performance in 
2010 (24.0 percent) and also lower than it would have been in 2009 
(26.9 percent) and in 2008 (25.5 percent). Freddie Mac's performance in 
2011 (19.2 percent) was much lower than in 2010 (23.0 percent) and also 
much lower than it would have been in 2009 (25.0 percent) and in 2008 
(25.5 percent).
    The 2010-2011 final rule also established a subgoal for the low-
income and high-minority census tracts components of the goal. For 2010 
and 2011, FHFA set the benchmark level for this subgoal at 13 
percent.\20\ As indicated in Table 3, Fannie Mae's performance on the 
subgoal in 2011 (11.6 percent) was somewhat lower than in 2010 (12.4 
percent) and also lower than it would have been in 2009 (13.3 percent) 
and in 2008 (15.1 percent). Freddie Mac's performance on the subgoal in 
2011 (9.2 percent) was lower than in 2010 (10.4 percent) and also lower 
than it would have been in 2009 (11.6 percent) and in 2008 (15.2 
percent).
---------------------------------------------------------------------------

    \20\ Affordability levels in low-income and high-minority areas, 
but not for disaster areas, can be adequately modeled using 
econometric time series forecast models.

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[[Page 67543]]

[GRAPHIC] [TIFF OMITTED] TR13NO12.002


[[Page 67544]]


    Low-Income Families Refinancing Housing Goal. The refinancing 
housing goal is targeted to low-income families, i.e., families with 
incomes no greater than 80 percent of AMI, and applies to mortgages 
that are given to pay off or prepay an existing loan secured by the 
same property. Thus, the goal does not apply to home equity or home 
purchase loans.
    Qualifying permanent modifications of loans for low-income families 
under the Administration's Home Affordable Modification Program (HAMP) 
are counted toward the refinancing housing goal. The impact of such 
modifications on goal performance is shown in Table 4.
    Table 4 shows the Enterprises' performance on this goal for 2010-
11, as well as what performance would have been if the goal had been in 
effect for the preceding four years. Performance shown for all years 
excludes units financed by Enterprise purchases of PLS, because such 
units were not counted toward the goals in 2010 or 2011.
    As indicated in Table 4, Fannie Mae's performance in 2011 (23.1 
percent) was higher than in 2010 (20.9 percent) and comparable with 
what it would have been in 2006-2009 (23.0 percent-26.6 percent). 
Freddie Mac's performance in 2011 (23.4 percent) was higher than in 
2010 (22.0 percent) and in 2009 (21.7 percent), but comparable with 
what it would have been in 2006-2008 (23.2 percent-26.0 percent).

[[Page 67545]]

[GRAPHIC] [TIFF OMITTED] TR13NO12.003

4. The Ability of the Enterprises To Lead the Industry in Making 
Mortgage Credit Available
    Leading the industry in making mortgage credit available includes 
making mortgage credit available to primary market borrowers at 
differing income levels with varying credit profiles living in various 
markets. Leadership also relates to the Enterprises' loss mitigation 
efforts, implementation of loan modification and refinance programs and 
support for state and local housing finance agencies.
    The Enterprises, along with FHA and VA, now lead the market in 
making mortgage credit available. In 2011, the Enterprises remained the 
largest issuers of MBS, guaranteeing 72 percent of single-family MBS. 
Policymakers have expressed concern with the extent of

[[Page 67546]]

government support for housing. The Enterprises' losses have depleted 
their capital and resulted in their being sustained only by infusions 
of capital from the U.S. Treasury under the Senior Preferred Stock 
Purchase Agreements. FHFA as conservator exercises statutory authority 
to conserve and preserve the Enterprises' assets, and to place the 
Enterprises in a sound and stable condition. Consistent with those 
responsibilities, FHFA has announced a number of steps to encourage 
more private participation in the mortgage market. FHFA has taken into 
account all of the foregoing considerations in assessing the 
Enterprises' ability to lead the industry in making mortgage credit 
available as required by the Safety and Soundness Act. FHFA has 
concluded that it is not necessary to adjust the benchmark levels based 
specifically on this factor.
5. Other Mortgage Data
    HMDA data reported by loan originators is the primary source of 
reliable mortgage data for establishing the single-family housing 
goals. In setting the housing goal benchmark levels, FHFA evaluates the 
Enterprises' performance with respect to leading or lagging the housing 
market under specific goals and compares HMDA data with mortgage 
purchase data provided by the Enterprises. FHFA also uses other 
reliable data sources including: The American Housing Survey (AHS); 
U.S. Census Bureau demographics; commercial sources such as Moody's; 
and other industry and trade research sources, e.g., MBA, Inside 
Mortgage Finance Publications, NAR, National Association of Home 
Builders (NAHB), and the Commercial Mortgage Securities Association. 
The FHFA Monthly Interest Rate Survey (MIRS) is used to complement 
forecast models for home purchase loan originations by making intra-
annual adjustments prior to the public release of HMDA mortgage data.
    In the development of economic forecasts, FHFA uses data and 
information from Wells Fargo, PNC, Fannie Mae, Freddie Mac, and The 
Wall Street Journal Survey. In addition, FHFA uses market and economic 
data from the Bureau of Labor Statistics, the Federal Reserve Board, 
the Department of Commerce Bureau of Economic Analysis, and FedStats.
6. Market Size
    Expectations for the 2012 and 2013 single-family mortgage market 
are for slow growth. Quantifiable factors influencing FHFA's outlook 
for the mortgage market include general growth in the economy, 
employment, inflation, and the interest rate environment. Industry 
observers expect subprime mortgage market activity to remain minimal 
through 2013. The FHA-insured mortgage market share is expected by 
industry observers to continue to be a major factor in the 
affordability levels in the conventional market as FHA loans will 
continue to be an attractive option for low-income homebuyers.\21\ The 
effects of unemployment, FHA market share, and refinancing have been 
discussed previously (see Section 2). The effects of interest rates, 
house prices, the overall housing market, manufactured housing, and the 
market outlook are discussed below.
---------------------------------------------------------------------------

    \21\ FHFA monitors the economic, housing and mortgage market 
forecasts of 12 industry and government entities. These entities are 
referred to as ``industry observers.'' For more information, and 
specifically which economic indicators each entity forecasts, see 
``Market Estimation Model for the 2012-2014 Enterprise Single-Family 
Housing Goals'' published at FHFA's Web site, www.fhfa.gov.
---------------------------------------------------------------------------

    Market outlook. Industry observers' economic and mortgage market 
forecasts are presented in Tables 5 and 6. On average, industry 
forecasters project the economy to continue to grow in 2012 and 2013, 
with Real Gross Domestic Product (GDP) growing at rates of just over 
2.0 percent over the period. These industry observers also expect the 
unemployment rate to remain just above 8.0 percent during the remainder 
of 2012, and falling to 7.8 percent in the fourth quarter of 2013.

[[Page 67547]]

[GRAPHIC] [TIFF OMITTED] TR13NO12.004


[[Page 67548]]


[GRAPHIC] [TIFF OMITTED] TR13NO12.005

BILLING CODE 8070-01-C
    Interest rates. Affordability in the mortgage market depends in 
part on the interest rate environment. Mortgage interest rates are 
impacted by many factors. Interest rates on longer term financial 
instruments such as mortgages typically follow the fluctuations of the 
10-Year Treasury note yield, with approximately a 190 basis point 
spread reflecting the differences in liquidity and credit risk in 2012 
and 180 basis point spread expected in 2013. With uncertainty in the 
financial markets of the European Union, the U.S. financial markets 
have seen increased demand as financial instruments here are seen as a 
``safe haven.'' Overall, interest rates in the United States are 
heavily influenced by the monetary policies of the Federal Reserve 
Board's Federal Open Market Committee (FOMC). During the current 
economic environment, since mid-2008, the FOMC has maintained an 
accommodative monetary policy in support of its dual mandate of 
fostering maximum employment and price stability. In its September 12-
13, 2012 meeting, the FOMC stated that it is committed to a low federal 
funds rate policy (at 0 to 0.25 percent) through mid-2015: ``[t]o 
support continued progress toward maximum employment and price 
stability, the Committee expects that a highly accommodative stance of 
monetary policy will remain appropriate for a considerable time after

[[Page 67549]]

the economic recovery strengthens.'' \22\ This monetary policy, 
combined with the international demand for U.S. financial instruments, 
has led to historically low interest rates in the mortgage market. The 
longer term 30-year fixed-rate mortgage interest rate has fallen from 
4.9 percent at the beginning of 2011 to 3.49 percent in Freddie Mac's 
September 20, 2012 Primary Mortgage Market Survey. Shorter term fixed- 
and adjustable-rate mortgage interest rates remain at historical lows, 
for example, on September 20, 2012, Freddie Mac reported that the 
average one-year adjustable-rate mortgage rate was 2.61 percent. As a 
major contributor to the cost of mortgage financing, lower interest 
rates directly affect the affordability of buying a home or refinancing 
a mortgage. As the economic recovery strengthens in the near future and 
if the European situation stabilizes, it is expected that interest 
rates, particularly longer term interest rates, will rise. For the 
2012-2013 period, as shown in Table 6, forecasts show that all interest 
rates are expected to remain at historical lows, including the interest 
rate on a 30-year fixed-rate mortgage, which is expected to remain near 
3.6 percent in the fourth quarter of 2012 and to only reach 3.9 percent 
by the fourth quarter of 2013.
---------------------------------------------------------------------------

    \22\ Federal Open Market Committee, Press Release, September 13, 
2012.
---------------------------------------------------------------------------

    House prices. Trends in house prices influence the housing and 
mortgage markets. In periods of house price appreciation, home sales 
and mortgage originations increase as the expected return on investment 
rises. In periods of price depreciation or price uncertainty, home 
sales and mortgage originations decrease as risk-averse homebuyers are 
reluctant to enter the market. House prices fell during 2009 through 
2011, but are expected to end 2012 up slightly from the fourth quarter 
2011. House prices are expected to continue with modest increases 
through 2013 (see Table 6).
    Housing market. An active housing market is generally good for the 
affordable home market. When there are more homes for sale, potential 
home buyers have more options, prices tend to be more competitive and 
the search costs to find affordable housing decrease. Historical 
volumes for sales of both new and existing houses are shown in Table 6, 
along with forecasts for 2012-2013. Total home sales reached a 10-year 
annual low in 2010 at 4.5 million units. Home sales increased slightly 
in 2011 to 4.6 million units, and industry observers expect that home 
sales will increase to 4.9 million units in 2012 and to 5.3 million 
units in 2013--well below 2004-2006 levels.
    During 2009 and early 2010, special homebuyers tax credits were 
available for first-time and repeat homebuyers. Mortgages to first-time 
homebuyers tend to be more likely to qualify for housing goals than 
those for repeat homebuyers, who tend to be older and have higher 
incomes. Many first-time homebuyers whose mortgages might otherwise 
have been available to receive goal-qualifying loans for home purchases 
in 2012-2014 instead bought their homes in 2009 or 2010 to take 
advantage of the first-time homebuyers tax credit.
    Manufactured housing loans. Between 2009 and 2011, 63 percent of 
manufactured housing loans were higher priced, according to HMDA data. 
Because chattel-financed loans do not count towards achievement of the 
housing goals, it was necessary to adjust the HMDA figures with respect 
to market estimates to account for this part of the manufactured 
housing market. Accordingly, FHFA down-weighted the average 2009 to 
2011 manufactured housing contribution to the goals market estimates by 
80 percent for the home purchase mortgage goals and 40 percent for the 
refinance mortgage goal. This resulted in the market estimate for the 
low-income home purchase housing goal being reduced by 1.4 percent, the 
very low-income home purchase housing goal and the low-income areas 
home purchase housing goal by 0.6 percent, and the low-income borrower 
refinance housing goal by 0.2 percent. The projected market estimates 
in Table 5 reflect these adjustments.
    Housing goal outlook. FHFA's estimates of the market performance 
for the two single-family owner-occupied home purchase housing goals 
and one subgoal, and the refinancing mortgage housing goal, are 
provided in Table 5. For 2012 and 2013, FHFA estimates that the low-
income borrower shares of the home purchase mortgage market will be 
27.0 percent and 26.3 percent, respectively. FHFA estimates that the 
very low-income borrower share of the home purchase mortgage market 
will be 8.3 percent for 2012 and 8.2 percent for 2013. FHFA estimates 
that the share of subgoal-qualifying mortgages in low-income areas in 
the home purchase mortgage market, excluding designated disaster areas, 
will be 11.8 percent in 2012 and 11.9 percent in 2013.
    The refinance share of the market, as measured by the MBA, averaged 
68 percent in 2011. With interest rates projected to rise during 2012-
2013, industry observers expect the refinance share of total 
originations to decrease. Generally speaking, decreasing refinance 
share leads to a higher percentage of refinance originations made up of 
lower-income borrowers. Accordingly, with a projected refinance share 
of 72 percent in 2012 and 52 percent in 2013, FHFA's market model 
estimates that 19.9 percent of refinance mortgages will be made to low-
income borrowers in 2012 and 22.6 percent in 2013. These estimates are 
reflective of historical lending patterns and trends. However, as 
evidenced by the Federal Reserve Bank of Philadelphia's Community 
Outlook Survey, the tightening of underwriting standards will impact 
the access to credit of lower-income borrowers. In this survey of 
organizations servicing low- and moderate-income populations (those 
with incomes less than 80 percent of AMI), only 2 percent of the 
respondents saw an increase in the access to credit in the second 
quarter of 2012, and only 4 percent of the respondents saw an increase 
in the access to credit in the first quarter of 2012.\23\
---------------------------------------------------------------------------

    \23\ Federal Reserve Bank of Philadelphia, Second Quarter 2012 
Community Outlook Survey, August 2012.
---------------------------------------------------------------------------

    To arrive at the market estimates, FHFA used an econometric state 
space methodology to extend the trends of the market performance for 
each goal, based on a monthly time series database provided by the 
Federal Financial Institutions Examination Council (FFIEC) and the 
Federal Reserve Board. For the low-income areas goal, this model 
produced the market estimates for only the subgoal. The remainder of 
the market estimates for this goal relates to the designated disaster 
areas. FHFA will provide the 2012-14 estimates of the share of home 
purchase mortgages that will qualify for the designated disaster areas 
portion of the low-income areas goal to the Enterprises in January of 
each year.
7. Need To Maintain the Sound Financial Condition of the Enterprises
    FHFA's duties as conservator require the conservation and 
preservation of the Enterprises' assets. While reliance on the 
Treasury's backing will continue until legislation produces a final 
resolution to the Enterprises' future, FHFA is monitoring the 
activities of the Enterprises to: (a) Limit their risk exposure by 
avoiding new lines of business; (b) ensure profitability in the new 
book of business without deterring market participation or hindering 
market recovery; and (c) minimize losses on the mortgages already on 
their books. Given the importance of the Enterprises to the housing 
market, any goal-setting must be closely linked to

[[Page 67550]]

putting the Enterprises in sound and solvent condition.

B. Single-Family Housing Goal Benchmark Levels

    FHFA used all relevant information when determining the benchmark 
levels for the 2012 and 2013 housing goals. While the tightening of 
underwriting standards is not included in the market estimates 
calculation, it was considered in the determination of the benchmark 
levels. FHFA attempts to use the most current data possible when 
estimating market size, including information from FHFA's MIRS and 
combined Fannie Mae and Freddie Mac refinance goal performance data to 
extend HMDA performance data. FHFA used estimated market series of 
goal-qualifying shares provided by Freddie Mac that are based on MIRS 
data from January 2004 to May 2012. In addition, FHFA used the combined 
Enterprise performance data from January 2001 to July 2012 to inform 
the market estimates for the refinance goal. Guidance for calculating 
market size using historical HMDA data is provided in the ``Market 
Estimation Model for the 2012-2014 Enterprise Single-Family Housing 
Goals'' published by FHFA on its Web site.\24\
---------------------------------------------------------------------------

    \24\ See https://www.fhfa.gov/Default.aspx?Page=72.
---------------------------------------------------------------------------

    Summary of comments. FHFA received a number of comments on the 
benchmark levels of the single-family housing goals that were in the 
proposed rule. Three housing advocacy groups and one trade association 
stated that the proposed level for the low-income home purchase goal 
benchmark (20 percent) was too low. They pointed out that it was 
considerably below actual performance by both Enterprises in 2010 and 
2011, which ranged from 23.3 percent to 26.8 percent. One of the 
advocacy groups said that a low level of this benchmark could become a 
``self-fulfilling prophecy.''
    One advocacy organization argued that FHFA should not use the lower 
end of the projected range of market estimates in setting this goal, 
and that it should ``supplement its econometric state space model with 
other forecasting techniques.'' A trade association stated that its 
forecast of the housing market is more positive than that projected by 
FHFA at the time of the proposed rule. An advocacy group noted that 
FHA's market share had declined between 2009 and 2011, and felt that 
this could lead to more goal-qualifying mortgages in the conventional 
market. Also, a trade association stated that the proposed low-income 
refinance goal (21 percent) was low relative to FHFA's market forecast 
for 2013.
    FHFA determination. FHFA has updated its forecasts of the goal-
qualifying shares of conventional conforming mortgages in 2012-2014, as 
explained elsewhere in this final rule. Based on new housing data, more 
recent forecasts from outside experts, and the factors described above, 
Sec.  1282.12 of the final rule establishes the benchmark levels for 
the single-family housing goals for 2012, 2013, and 2014 as follows:
    Housing goal for low-income families. The benchmark level of the 
annual goal for each Enterprise's purchases of purchase money mortgages 
on owner-occupied single-family housing for low-income families is 23 
percent of the total number of such mortgages purchased by that 
Enterprise, an increase from the 20 percent level in the proposed rule. 
This increase is supported by the fact that one of the statutory 
factors to be used in setting goals is past performance, which, as 
shown in Table 1, significantly exceeded the proposed goal level of 20 
percent in 2010-2011.
    Housing goal for very low-income families. The benchmark level of 
the annual goal for each Enterprise's purchases of purchase money 
mortgages on owner-occupied single-family housing for low-income 
families is 7 percent of the total number of such mortgages purchased 
by that Enterprise, as in the proposed rule.
    Housing subgoal for families in low-income areas. The 2012-2014 
benchmark level of the annual subgoal for each Enterprise's purchases 
of purchase money mortgages on owner-occupied single-family housing for 
families in low-income census tracts and for low- and moderate-income 
families in minority census tracts is 11 percent of the total number of 
such mortgages purchased by that Enterprise, as in the proposed rule.
    Housing goal for families in low-income areas. The benchmark level 
of the annual goal for each Enterprise's purchases of purchase money 
mortgages on owner-occupied single-family housing for families in low-
income areas is set annually by notice from FHFA. The benchmark level 
is based on the benchmark level for the low-income areas subgoal, plus 
an adjustment factor that reflects the incremental percentage share 
that mortgages for low- and moderate-income families in designated 
disaster areas had in the most recent year for which data is available. 
For 2012, this adjustment factor is 9 percentage points.
    Impact of 2010 Census. This subgoal and goal were established for 
2010-2011 based on data from the 2000 census. FHFA has also used 2000 
census data in its modeling for forecasting the benchmark levels for 
the single-family housing goals. However, the Enterprises are in the 
process of transitioning from 2000 census data to 2010 census data as 
the basis for reporting performance on this goal and subgoal. Due to 
inadequate data, FHFA has not formulated this goal and subgoal in terms 
of 2010 census data, but FHFA notes that there was an increase in the 
number of low-income tracts and, especially, high-minority tracts 
between 2000 and 2010. Thus, FHFA anticipates that this transition will 
increase performance on this goal and subgoal.
    Housing goal for refinancing mortgages. The benchmark level of the 
annual goal for each Enterprise's purchases of refinancing mortgages on 
owner-occupied single-family housing for low-income families is 20 
percent of the total number of such mortgages purchased by that 
Enterprise, a slight reduction from the 21 percent level in the 
proposed rule.

V. Multifamily Housing Goals

A. Analysis of Factors for Multifamily Housing Goals

    Section 1333(a)(4) of the Safety and Soundness Act requires FHFA to 
consider the following six factors in setting the multifamily special 
affordable housing goals:
    (1) National multifamily mortgage credit needs and the ability of 
the Enterprise to provide additional liquidity and stability for the 
multifamily mortgage market;
    (2) The performance and effort of the Enterprise in making mortgage 
credit available for multifamily housing in previous years;
    (3) The size of the multifamily mortgage market for housing 
affordable to low-income and very low-income families, including the 
size of the multifamily markets for housing of a smaller or limited 
size;
    (4) The ability of the Enterprise to lead the market in making 
multifamily mortgage credit available, especially for multifamily 
housing affordable to low-income and very low-income families;
    (5) The availability of public subsidies; and
    (6) The need to maintain the sound financial condition of the 
Enterprise.\25\
---------------------------------------------------------------------------

    \25\ 12 U.S.C. 4563(a)(4).
---------------------------------------------------------------------------

    FHFA's analysis of each of the factors is set forth below.
1. National Multifamily Mortgage Credit Needs
    In 2011, total multifamily mortgage originations increased by 60 
percent as

[[Page 67551]]

commercial banks and thrifts significantly increased their multifamily 
lending, according to MBA survey data.\26\ This trend has continued in 
the first half of 2012. Life insurance companies, and to a limited 
extent, commercial mortgage-backed securities (CMBS) issuers, increased 
their lending volumes in the first half of 2012 compared to the first 
half of 2011. As a result of traditional multifamily lenders re-
entering the market, the Enterprises' market share in terms of dollars 
returned to pre-2008 levels.\27\
---------------------------------------------------------------------------

    \26\ MBA Analysis Pegs 2011 Multifamily Lending at $110.1 
Billion, Up 60% from 2010, MBA October 4, 2012, https://www.mortgagebankers.org/NewsandMedia/PressCenter/82273.htm.
    \27\ Mortgage Bankers' Commercial/Multifamily Originations up 55 
Percent to $184.3 Billion in 2011, MBA April 11, 2012, https://www.mortgagebankers.org/NewsandMedia/PressCenter/80430.htm.
---------------------------------------------------------------------------

    Record low interest rates and robust performance by the multifamily 
market have attracted banks and thrifts back to multifamily lending. 
Banks and thrifts have helped to fill in the void left by the exit of 
conduit lenders from multifamily lending in 2008. FHFA expects that in 
2012 the Enterprises will likely see a decrease in their market share 
of originations, based on second quarter 2012 loan origination data 
provided by the MBA.\28\ Freddie Mac's first half 2012 multifamily 
production was about $12 billion in financing, which is about 67 
percent higher than in the first half of 2011. Likewise, Fannie Mae has 
seen a sharp increase in first half 2012 multifamily production volume. 
Through June 30, 2012, Fannie Mae had purchased around $14 billion in 
multifamily loans, compared to $10.5 billion in the first half of 2011. 
The Enterprises' market share should continue to decline over the 2013-
2014 period, although the overall multifamily mortgage market should 
slowly grow as the economy recovers. In arriving at this conclusion, 
FHFA considered, among other factors, vacancy rates, demand for 
multifamily housing, interest rates, property values, and new 
multifamily starts.
---------------------------------------------------------------------------

    \28\ Second Quarter Commercial/Multifamily Mortgage Originations 
Up 25 Percent from Q2 2011, MBA July 31, 2012, https://www.mortgagebankers.org/NewsandMedia/PressCenter/81459.htm.
---------------------------------------------------------------------------

    Vacancy rates and demand for multifamily housing. Declining vacancy 
rates are usually associated with increased rents and greater investor 
interest in multifamily properties. According to the U.S. Census 
Bureau, rental vacancy rates fell from 9.2 percent in the second 
quarter of 2011 to 8.6 percent in the second quarter of 2012. 
``Effective rents,'' which are the rents that tenants actually pay, 
increased at an annual rate of over 4 percent in markets tracked by 
Axiometrics, a provider of commercial real estate data.\29\ Although 
vacancy rates decreased and property values and rents increased, 
multifamily construction permits were issued at an annualized rate of 
274,000 in July 2012, which is still well below historical levels. 
Continued low interest rates and increased demand for multifamily 
housing should spur further increases in new multifamily construction. 
Likewise, the lack of new units coming onto the market and the 
prevailing low interest rates should continue to encourage multifamily 
property owners to refinance. However, a rise in interest rates would 
likely temper any increase in multifamily mortgage activity in 2013-
2014.
---------------------------------------------------------------------------

    \29\ ``Axiometrics: National Effective Rents Up Slightly In 
July,'' MortgageOrb.com (August 28, 2012), available at https://www.mortgageorb.com/e107_plugins/content/content.php?content.12282.
---------------------------------------------------------------------------

    Property values. As of the end of June 2012, multifamily property 
values were up over 24 percent from their low point in the third 
quarter of 2009.\30\ However, multifamily property values are still 
below peak levels reached in 2007. FHFA anticipates a continued rise in 
multifamily property values in most markets for the rest of 2012 and 
for the subsequent two years. Rising multifamily property values 
usually spur increased refinancings, property sales, and new 
construction activity.
---------------------------------------------------------------------------

    \30\ ``June Swoon: CRE Pricing Recovery Hits Soft Patch,'' 
CoStar (August 2012), available at https://www.costar.com/News/Article/June-Swoon-CRE-Pricing-Recovery-Hits-Soft-Patch/140696.
---------------------------------------------------------------------------

2. The Performance and Effort of the Enterprises in Making Mortgage 
Credit Available for Multifamily Housing in Previous Years
    Multifamily Low-Income Housing Goal. The multifamily low-income 
housing goal includes units affordable to low-income families (those 
with incomes no greater than 80 percent of AMI, as defined in HERA). 
Both Enterprises played major roles in funding multifamily units for 
low-income families between 2006 and 2009, as shown in Table 7. Fannie 
Mae financed an average of 346,000 such units over this period, peaking 
at 447,000 units in 2008, while Freddie Mac financed an average of 
226,000 such units over this period, peaking at 298,000 units in 2007. 
The Enterprises followed different approaches to providing financing 
for affordable multifamily properties, with Freddie Mac relying to a 
significant extent on the purchase of CMBS or the issuance of Tax-
Exempt Bond Securitizations, while Fannie Mae depended to a greater 
extent on the direct purchase of multifamily loans originated by its 
Delegated Underwriting and Servicing (DUS) lenders.
    In the final rule establishing the housing goals for 2010-2011, 
FHFA set the minimum goal for Fannie Mae at 177,750 low-income 
multifamily units per year, and the minimum goal for Freddie Mac at 
161,250 such units per year, which were below the Enterprises' average 
levels of purchases in 2006-2009. FHFA determined that in 2010 Fannie 
Mae financed 214,997 low-income multifamily units, or 121 percent of 
its goal, while Freddie Mac financed 161,500 such units, or 100.2 
percent of its goal. In 2011, Fannie Mae financed 301,244 low-income 
multifamily units, or 169 percent of its goal, while Freddie Mac 
financed 229,001 such units, or 142 percent of its goal.
BILLING CODE 8070-01-P

[[Page 67552]]

[GRAPHIC] [TIFF OMITTED] TR13NO12.006

    Multifamily Very Low-Income Subgoal. The multifamily very low-
income housing subgoal includes units affordable to very low-income 
families (those with incomes no greater than 50 percent of AMI, as 
defined in HERA). Enterprise financing of rental units for very low-
income families over the 2006-2011 period is reported in Table 8. On 
average, from 2006 to 2009, Fannie Mae financed 83,000 such units each 
year, peaking at 95,000 units in 2008, and Freddie Mac financed 39,000 
such units each year, peaking at 59,000 units in 2007. The 2010-2011 
housing goals regulation set the minimum subgoal for Fannie Mae at 
42,750 very low-income multifamily units, and for Freddie Mac at 21,000 
such units, which were below the Enterprises' average levels of loan 
purchases in 2006-2009. FHFA determined that, in 2010, Fannie Mae 
financed 53,908 very low-income multifamily units, or 126 percent of 
its subgoal, while Freddie Mac financed 29,650 such units, or 141 
percent of its subgoal. In 2011, Fannie Mae financed 84,244 very low-
income multifamily units, or 197 percent of its subgoal, while Freddie 
Mac financed 35,471 such units, or 169 percent of its subgoal.

[[Page 67553]]

[GRAPHIC] [TIFF OMITTED] TR13NO12.007

    Financing of low-income units in small multifamily properties. 
Section 1333(a)(3) of the Safety and Soundness Act provides that the 
Director shall require each Enterprise to report on its purchases of 
mortgages on multifamily housing ``of a smaller or limited size that is 
affordable to low-income families.'' \31\ Consistent with industry 
practice, FHFA has defined small multifamily properties as those 
containing 5 to 50 units.
---------------------------------------------------------------------------

    \31\ 12 U.S.C. 4563(a)(3).
---------------------------------------------------------------------------

    Small multifamily properties play an important role as a source of 
affordable rental housing. According to the 2007 American Housing 
Survey, multifamily properties containing 5-50 units constituted 77 
percent of all multifamily units and 74 percent of the multifamily 
units constructed in the previous 4 years. Table 9 reports information 
on low-income units in small multifamily properties that were financed 
by the Enterprises in 2006-2011.

[[Page 67554]]

[GRAPHIC] [TIFF OMITTED] TR13NO12.008

BILLING CODE 8070-01-C
    Both Enterprises have decreased their purchases of small 
multifamily mortgages in the past few years due to a lack of CMBS 
issuances available for sale and a decline in the overall volume of 
small multifamily loans available for purchase. Fannie Mae financed 
58,931 low-income units in small multifamily properties in 2007, and an 
average of 38,901 such units per year over the 2007-2009 period. This 
number declined to only 12,460 units in 2010 but rebounded to 22,382 
units in 2011. Freddie Mac has played a smaller role in the small 
multifamily market, financing 2,147 low-income units in small 
multifamily properties in 2007, an average of 1,283 units per year in 
2007-2009, but only 459 units in 2010. Freddie Mac increased its small 
multifamily purchases to 2,172 in 2011. These figures do not include 
any units in small multifamily properties financed by the acquisition 
of CMBS, which are not eligible for housing goals credit in accordance 
with the 2010-2011 housing goals regulation. One trade association 
criticized the Enterprises for their lack of support for mortgages on 
small multifamily properties, and recommended reinstituting Department 
of Housing and Urban Development's 2001-2003 ``bonus points'' for 
purchase of such mortgages. It also stated that the Enterprises could 
do more work with state housing finance agencies in this area.
    FHFA does not believe expansion of small multifamily lending would 
be appropriate during conservatorship given the increased risks, 
resources and origination costs required to serve this market and given 
that FHFA is striving to gradually shrink the Enterprises' footprint in 
the market and shift credit risk to private capital. FHFA will continue 
to require the Enterprises to report on their financing of low-income 
unit in such properties, but this final rule does not establish 
explicit goals for such mortgage purchases.
3. Multifamily Mortgage Market Size
    With demand for multifamily housing increasing, the multifamily 
mortgage market should continue to grow, both in terms of total 
financing activity provided and total new multifamily units 
constructed. The number of new multifamily units completed in 2011 was 
129,000, according to the U.S. Census Bureau. The Census Bureau 
estimates that, as of August 2012, the annualized number of new 
multifamily completions was 209,000, a significant increase over 
2011.\32\ As stated previously, MBA estimates that multifamily mortgage 
originations totaled about $110 billion in 2011. Based on part year 
2012 survey data from the MBA, FHFA anticipates there will be about a 
25 percent increase in total multifamily originations in 2012, which 
would put the market size at almost $137 billion. Thereafter, 
multifamily originations should decline to near levels seen from 2000 
to 2008.
---------------------------------------------------------------------------

    \32\ ``New Residential Construction in August 2012,'' U.S. 
Census Bureau, (Sept. 19, 2012), https://www.census.gov/construction/nrc/pdf/newresconst_201208.pdf.
---------------------------------------------------------------------------

    As in prior years, multifamily housing goals are set separately for 
each Enterprise and are measured in units rather than in dollar volume. 
Several factors support continuing to establish different goal levels 
for each Enterprise. First, loan maturities will be increasing for both 
Fannie Mae and Freddie Mac from 2012 to 2014, but the increase for 
Fannie Mae will be much greater than for Freddie Mac, thus allowing 
Fannie Mae more opportunities to refinance maturing loans currently in 
its portfolio which can be counted towards future housing goals. 
Second, consistent with the 2010-2011 housing goals regulation, 
multifamily units financed through CMBS purchases are not goals-
eligible. Historically, Freddie Mac has relied more heavily on 
purchasing CMBS to obtain goals-eligible units than has Fannie Mae, so 
the exclusion of CMBS purchases has a greater impact on Freddie Mac's 
goals performance.

[[Page 67555]]

4. Ability of the Enterprises To Lead the Market in Making Multifamily 
Mortgage Credit Available
    The multifamily housing market has continued to improve in many 
geographic areas during 2012 (e.g., decreasing vacancy rates, 
increasing rents, rising property net operating income and rising 
property values). As discussed above, FHFA expects this improvement to 
continue through 2014. Fannie Mae and Freddie Mac have recently 
represented a larger than usual portion of the multifamily mortgage 
market. For example, the Enterprises estimate their average share of 
the multifamily mortgage market, excluding FHA-insured loans, was 37 
percent in the period from 2004 to 2007, before it jumped to 87 percent 
in 2009.
    By 2011, however, the Enterprises' multifamily mortgage market 
share declined to about 57 percent as traditional competitors such as 
life insurance companies, pension funds and banks re-entered 
multifamily lending. The decline in Enterprise multifamily mortgage 
market share should continue through 2013-2014, as these traditional 
competitors increase their presence in the multifamily mortgage market.
5. Availability of Public Subsidies
    Public subsidies for multifamily housing have been affected by the 
mortgage credit crisis. The value of low-income housing tax credits 
(LIHTCs), the most important source of equity for new low-income 
housing development, fell in 2009 but has since recovered to a point 
where the LIHTC market is substantially healthier. Total equity raised 
through the sale of LIHTCs in 2011 was estimated to be about $8 billion 
as compared to approximately $4.5 billion in 2009.\33\ In 2007, before 
the mortgage crisis, about $9 billion in equity was raised through 
LIHTCs. Demand for LIHTCs should continue in strong rental markets and 
in markets where bank investors seek to meet Community Reinvestment Act 
(CRA) goals. As LIHTC investments return to pre-2008 volumes, 
opportunities for the Enterprises to finance LIHTC properties with 
goals-eligible units should increase.
---------------------------------------------------------------------------

    \33\ ``LIHTC Market in 2012, A Rosy Path Ahead,'' Tax Credit 
Advisor, February 2012.
---------------------------------------------------------------------------

6. Need To Maintain the Sound Financial Condition of the Enterprises
    The financial condition of both Enterprises is discussed in more 
detail above. FHFA has considered the multifamily housing goals in 
light of the importance of the Enterprises to the housing market and in 
light of FHFA's duties as conservator to conserve and preserve the 
assets of the Enterprises. The multifamily housing goal levels for 
2012-2014 in the final rule are aligned with safe and sound practices, 
and market realities.

B. Multifamily Housing Goal Levels

    Summary of comments. FHFA received a number of comments on the 
levels of the multifamily housing goals in the proposed rule. While 
most commenters thought the proposed goals were appropriate, several 
commenters said the goals should be increased, especially for very low-
income units.
    Three housing advocacy groups and one trade association supported 
the proposed levels of the low-income multifamily goals. One of these 
commenters and another housing advocacy group recommended that these 
goal levels be reexamined and possibly adjusted at a later date. 
However, one trade association doubted that FHFA would raise these 
goals at a later date.
    One trade association and two housing advocacy groups stated that 
the proposed levels of both the low-income and very low-income 
multifamily housing goals were too low. One commenter specifically 
stated that the goals for 2014 should be increased. Fannie Mae stated 
that the proposed very low-income multifamily goal for Freddie Mac was 
very low, relative to its own goal. Freddie Mac made no comment on the 
proposed multifamily goals.
    Fannie Mae presented detailed arguments to support its case that 
the proposed multifamily goals might be too high, relative to the 2010-
2011 goals, and that they might be unattainable for 2013 and 2014 
(though not for 2012), especially if the overall market is flat and its 
share of the market declines, as it anticipates, with the return of 
more private capital to the market.
    Fannie Mae also stated that multifamily refinance volumes are 
likely to remain ``muted'' through 2014, following the heavy 
concentration of refinances in the 2005-2007 period.
    FHFA determination. FHFA believes that the Enterprises' share of 
multifamily mortgage originations in 2012 and 2013 will remain near or 
somewhat above 2011 levels, because of the return of banks and thrifts 
to multifamily lending. The CMBS market may rebound in 2013 and 2014 if 
investors are willing to purchase the subordinated or ``B'' tranches of 
these securities.
    FHFA notes that both Enterprises' low-income multifamily goal and 
very low-income multifamily subgoal performance last year exceeded the 
goals then in effect by wide margins. The Enterprises' 2011 performance 
also exceeded the levels of all of the proposed goals and subgoals for 
2012-2014, by significant margins. FHFA also notes that interest rates 
on multifamily properties have been very low, and are likely to remain 
low in light of the policies of the Federal Reserve Board. New 
construction of multifamily properties has also increased in recent 
months.
    In addition, both Enterprises have many multifamily mortgages that 
will mature and require refinancing over the next several years. 
Specifically, Fannie Mae's maturing multifamily mortgage volume is 
projected to be $10.2 billion in 2012, $18.1 billion in 2013, and $14.3 
billion in 2014. For Freddie Mac, maturing multifamily mortgage volume 
is projected to be $3.3 billion in 2012, $6.6 billion in 2013, and $8.4 
billion in 2014.
    Based on partial 2012 results, FHFA estimates that both Fannie Mae 
and Freddie Mac will surpass the goals in the proposed rule by 20 
percent or more. Freddie Mac should more than double its projected 
financing of very low-income units, while Fannie Mae's very low-income 
performance should be 50 percent above the proposed goal. As a result, 
in the final rule, FHFA has revised upward both the low-income and very 
low-income multifamily goal and subgoal levels for 2012 through 2014, 
measured in qualifying units financed, as follows:
    Multifamily low-income housing goal. Under the final rule, the 
annual goal for Fannie Mae's purchases of mortgages on multifamily 
housing affordable to low-income families is at least 285,000 units in 
2012; 265,000 units in 2013; and 250,000 units in 2014. The annual goal 
for Freddie Mac's purchases of mortgages on multifamily housing 
affordable to low-income families is at least 225,000 units in 2012; 
215,000 units in 2013; and 200,000 units in 2014. These goal levels 
reflect the Enterprises' increased financing activity and the slow 
return of other sources of capital to the multifamily mortgage market. 
The percentage increases in the goals for Freddie Mac are greater than 
for Fannie Mae over the 2012-2014 period because part year data for 
2012 show Freddie Mac closing the gap in financing low-income 
multifamily units.
    Multifamily very low-income housing subgoal. Under the final rule, 
the annual subgoal for Fannie Mae's purchases of mortgages on 
multifamily housing affordable to very low-income families is at least 
80,000 units in 2012, 70,000

[[Page 67556]]

in 2013, and 60,000 in 2014. The annual subgoal for Freddie Mac's 
purchase of mortgages on multifamily housing affordable to very low-
income families is at least 59,000 units in 2012, 50,000 in 2013, and 
40,000 in 2014. These very low-income goal levels for both Enterprises 
are substantially higher than in the proposed rule, because their 
actual financing of very low-income units has been significantly higher 
than what was forecast in the proposed rule.

VI. Special Counting Requirements--Multifamily Property Conversions

    Section 1282.15(d) requires the Enterprises to use tenant income to 
determine the affordability of rental units, when such information is 
available, and to use rent levels where tenant income information is 
not available. Some commenters on the proposed 2010-2011 housing goals 
rule raised concerns that using current rent information could lead to 
counting a multifamily mortgage as ``affordable'' in cases where the 
property is expected to convert from affordable rents to market rate 
rents. In the final 2010-2011 rule, FHFA indicated that it expected to 
address this issue in a subsequent rulemaking.\34\ In the proposed 
2012-2014 housing goals rule, FHFA did not propose any change to the 
existing counting rules for determining affordability for multifamily 
mortgages, but requested comment on whether the counting rules should 
be revised to require the Enterprises to use ``projected rents'' to 
determine affordability, if such projected rents are available.
---------------------------------------------------------------------------

    \34\ See 75 FR 55926.
---------------------------------------------------------------------------

    Summary of comments. Six commenters and both Enterprises addressed 
this issue. Two housing advocacy groups and one trade association 
stated that FHFA should take steps to avoid awarding credit toward the 
housing goals for properties which are subsequently converted from 
affordable rents to market rents. On the other hand, two other housing 
advocacy groups, a trade association and both Enterprises stated that 
any such adjustments would be costly to implement, and that it would be 
very difficult to use ``projected rents'' in measuring the 
affordability of rental units which might be converted from affordable 
to market rate units.
    Fannie Mae commented that the requirements to monitor such 
conversions would be burdensome and impractical, and based on its 
experience, it believes that such conversions are relatively rare. 
Fannie Mae further stated that it does not structure permanent loans 
using projected rents under its underwriting standards, and it raised 
concerns that such a provision could discourage capital expenditures to 
improve the condition of properties. In addition, Fannie Mae discussed 
the operational issues involved in collecting projected rents and the 
certification of projected rent rolls.
    This issue was the only one discussed by Freddie Mac in its 
comments on the proposed rule. Freddie Mac stated that its underwriting 
is based on actual rents, not projected rents, referring to this as a 
``matter of fundamental credit risk discipline.'' Freddie Mac added 
that use of projected rents could constrain the flow of Enterprise 
capital projects to geographic areas or specific projects for which 
rents might increase due to market forces. Freddie Mac also commented 
that if projected rents were used in determining affordability, 
logically such rents should be compared with projected incomes, thereby 
introducing additional subjectivity and costs into the process.
    FHFA determination. The arguments made by the Enterprises and 
several other commenters against the use of ``projected rents'' are 
compelling, and the operational issues involved could discourage the 
Enterprises from financing multifamily housing where these issues might 
arise. Thus, FHFA has decided to continue its current counting rules, 
which rely on the rent rolls at the time of mortgage origination, in 
determining the affordability of rental units in multifamily 
properties.
    The Enterprises' underwriting standards for multifamily properties 
use actual rents, as provided on the property rent roll at the time of 
underwriting, rather than post-closing projected rents. This limits the 
likelihood that an Enterprise will purchase a multifamily mortgage 
where the financing depends on a higher net operating income due to 
projected increases in current rents. The Enterprises may still 
purchase such loans indirectly through purchases of CMBS. For example, 
in one well-publicized case in New York City, rent-regulated properties 
were purchased by investors planning on raising rents to market levels. 
Both Enterprises invested in the private label CMBS that financed the 
purchases and they received housing goals credit for these transactions 
under the housing goals regulation then in effect. In the past, almost 
all affordable rent to market rate conversions involving the 
participation of the Enterprises were facilitated through their 
purchases of CMBS. However, FHFA's current regulation specifies that 
purchases of private label securities, including CMBS, are ineligible 
for housing goals credit, removing any incentive for the Enterprises to 
purchase CMBS to reach their multifamily housing goals. Accordingly, 
these transactions would not have received goals credit under the 
current regulation. Furthermore, in the New York City example, 
subsequent litigation resulted in significant restrictions on the new 
owners' ability to convert from rent-regulated to market rents, which 
illustrates the difficulty of projecting whether currently affordable 
rents can actually be raised.

VII. Paperwork Reduction Act

    The final rule does not contain any information collection 
requirement that requires the approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

VIII. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that 
a regulation that has a significant economic impact on a substantial 
number of small entities, small businesses, or small organizations must 
include an initial regulatory flexibility analysis describing the 
regulation's impact on small entities. Such an analysis need not be 
undertaken if the agency has certified that the regulation will not 
have a significant economic impact on a substantial number of small 
entities. 5 U.S.C. 605(b). FHFA has considered the impact of the final 
rule under the Regulatory Flexibility Act.
    The General Counsel of FHFA certifies that the final rule is not 
likely to have a significant economic impact on a substantial number of 
small entities because the regulation is applicable only to the 
Enterprises, which are not small entities for purposes of the 
Regulatory Flexibility Act.

List of Subjects in 12 CFR Part 1282

    Mortgages, Reporting and recordkeeping requirements.

Authority and Issuance

    For the reasons stated in the SUPPLEMENTARY INFORMATION, under the 
authority of 12 U.S.C. 4511, 4513, and 4526, FHFA amends part 1282 of 
title 12 of the Code of Federal Regulations as follows:

PART 1282--ENTERPRISE HOUSING GOALS AND MISSION

0
1. The authority citation for part 1282 is revised to read as follows:

    Authority:  12 U.S.C. 4501, 4502, 4511, 4513, 4526, 4561-4566.


[[Page 67557]]



0
2. Amend Sec.  1282.12 by revising paragraphs (c)(2), (d)(2), (f)(2) 
and (g)(2) to read as follows:


Sec.  1282.12  Single-family housing goals.

* * * * *
    (c) * * *
    (2) The benchmark level, which for 2012, 2013 and 2014 shall be 23 
percent of the total number of purchase money mortgages purchased by 
that Enterprise in each year that finance owner-occupied single-family 
properties.
    (d) * * *
    (2) The benchmark level, which for 2012, 2013 and 2014 shall be 7 
percent of the total number of purchase money mortgages purchased by 
that Enterprise in each year that finance owner-occupied single-family 
properties.
* * * * *
    (f) * * *
    (2) The benchmark level, which for 2012, 2013 and 2014 shall be 11 
percent of the total number of purchase money mortgages purchased by 
that Enterprise in each year that finance owner-occupied single-family 
properties.
    (g) * * *
    (2) The benchmark level, which for 2012, 2013 and 2014 shall be 20 
percent of the total number of refinancing mortgages purchased by that 
Enterprise in each year that finance owner-occupied single-family 
properties.

0
3. Amend Sec.  1282.13 by revising paragraphs (b) and (c) to read as 
follows:


Sec.  1282.13  Multifamily special affordable housing goal and subgoal.

* * * * *
    (b) Multifamily low-income housing goal.--(1) For the year 2012, 
the goal for each Enterprise's purchases of mortgages on multifamily 
residential housing affordable to low-income families shall be, for 
Fannie Mae, at least 285,000 dwelling units affordable to low-income 
families in multifamily residential housing financed by mortgages 
purchased by that Enterprise, and for Freddie Mac, at least 225,000 
such dwelling units.
    (2) For the year 2013, the goal for each Enterprise's purchases of 
mortgages on multifamily residential housing affordable to low-income 
families shall be, for Fannie Mae, at least 265,000 dwelling units 
affordable to low-income families in multifamily residential housing 
financed by mortgages purchased by that Enterprise, and for Freddie 
Mac, at least 215,000 such dwelling units.
    (3) For the year 2014, the goal for each Enterprise's purchases of 
mortgages on multifamily residential housing affordable to low-income 
families shall be, for Fannie Mae, at least 250,000 dwelling units 
affordable to low-income families in multifamily residential housing 
financed by mortgages purchased by that Enterprise, and for Freddie 
Mac, at least 200,000 such dwelling units.
    (c) Multifamily very low-income housing subgoal.--(1) For the year 
2012, the subgoal for each Enterprise's purchases of mortgages on 
multifamily residential housing affordable to very low-income families 
shall be, for Fannie Mae, at least 80,000 dwelling units affordable to 
very low-income families in multifamily residential housing financed by 
mortgages purchased by that Enterprise, and for Freddie Mac, at least 
59,000 such dwelling units.
    (2) For the year 2013, the subgoal for each Enterprise's purchases 
of mortgages on multifamily residential housing affordable to very low-
income families shall be, for Fannie Mae, at least 70,000 dwelling 
units affordable to very low-income families in multifamily residential 
housing financed by mortgages purchased by that Enterprise, and for 
Freddie Mac, at least 50,000 such dwelling units.
    (3) For the year 2014, the subgoal for each Enterprise's purchases 
of mortgages on multifamily residential housing affordable to very low-
income families shall be, for Fannie Mae, at least 60,000 dwelling 
units affordable to very low-income families in multifamily residential 
housing financed by mortgages purchased by that Enterprise, and for 
Freddie Mac, at least 40,000 such dwelling units.

    Dated: October 31, 2012.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2012-27121 Filed 11-9-12; 8:45 am]
BILLING CODE 8070-01-P