2021 Enterprise Housing Goals, 49312-49322 [2020-15959]

Agencies

• FEDERAL HOUSING FINANCE AGENCY

[Federal Register Volume 85, Number 157 (Thursday, August 13, 2020)]
[Proposed Rules]
[Pages 49312-49322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15959]


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FEDERAL HOUSING FINANCE AGENCY

12 CFR Part 1282

RIN 2590-AB04


2021 Enterprise Housing Goals

AGENCY: Federal Housing Finance Agency.

ACTION: Proposed rule.

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SUMMARY: The Federal Housing Finance Agency (FHFA) is proposing a rule 
and seeking comments on proposed benchmark levels for the 2021 housing 
goals for Fannie Mae and Freddie Mac (the Enterprises). The housing 
goals apply to mortgages purchased by the Enterprises and include 
separate categories for single-family and multifamily housing that is 
affordable to low-income and very low-income families, among other 
categories. This proposed rule would establish benchmark levels for 
each of the housing goals for 2021.

DATES: Comments must be received on or before October 13, 2020.

ADDRESSES: You may submit your comments on the proposed rule, 
identified by regulatory information number (RIN) 2590-AB04, by any one 
of the following methods:
     Agency Website: https://www.fhfa.gov/open-for-comment-or-input.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. If you submit your 
comment to the Federal eRulemaking Portal, please also send it by email 
to FHFA at [email protected] to ensure timely receipt by FHFA. 
Include the following information in the subject line of your 
submission: Comments/RIN 2590-AB04.
     Hand Delivered/Courier: The hand delivery address is: 
Alfred M. Pollard, General Counsel, Attention: Comments/RIN 2590-AB04, 
Federal Housing Finance Agency, Eighth Floor, 400 Seventh Street SW, 
Washington, DC 20219. Deliver the package at the Seventh Street 
entrance Guard Desk, First Floor, on business days between 9 a.m. and 5 
p.m.
     U.S. Mail, United Parcel Service, Federal Express, or 
Other Mail Service: The mailing address for comments is: Alfred M. 
Pollard, General Counsel, Attention: Comments/RIN 2590-AB04, Federal 
Housing Finance Agency, Eighth Floor, 400 Seventh Street SW, 
Washington, DC 20219. Please note that all mail sent to FHFA via U.S. 
Mail is routed through a national irradiation facility, a process that 
may delay delivery by approximately two weeks.

FOR FURTHER INFORMATION CONTACT: Ted Wartell, Associate Director, 
Housing & Community Investment, Division of Housing Mission and Goals, 
at (202) 649-3157, [email protected]; Padmasini Raman at (202) 649-
3633, [email protected]; or Kevin Sheehan, Associate General 
Counsel, Office of General Counsel, (202) 649-3086, 
[email protected]. These are not toll-free numbers. The mailing 
address is: Federal Housing Finance Agency, 400 Seventh Street SW, 
Washington, DC 20219. The telephone number for the Telecommunications 
Device for the Deaf is (800) 877-8339.

SUPPLEMENTARY INFORMATION: 

I. Comments

    FHFA invites comments on all aspects of the proposed rule and will 
take all comments into consideration before issuing a final rule. 
Copies of all comments on the proposed rule will be posted without 
change, including any personal information you provide such as your 
name, address, email address, and telephone number, on the FHFA website 
at https://www.fhfa.gov. In addition, copies of all comments received 
will be available for examination by the public through the electronic 
rulemaking docket for this proposed rule also located on the FHFA 
website.

II. Background

    Uncertainty over public health and the economic impacts of the 
COVID-19 pandemic has caused significant disruption in both the single-
family and multifamily housing markets since March. For reasons 
explained in more detail later in the proposed rule, due to the 
unexpectedly severe nature of the COVID-19 pandemic and associated 
economic uncertainty, FHFA is proposing benchmark levels for the 
single-family and multifamily goals for calendar year 2021 only. The 
proposed benchmark levels are set forth below and would be the same as 
those for 2018-2020. FHFA will subsequently conduct a new round of 
notice and comment rulemaking to establish benchmark levels for 2022 
and beyond.

A. Statutory and Regulatory Background for the Existing Housing Goals

    The Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 (Safety and Soundness Act) requires FHFA to establish several 
annual housing goals for both single-family and multifamily mortgages 
purchased by Fannie Mae and Freddie Mac.\1\ The annual housing goals 
are one measure of the extent to which the Enterprises are meeting 
their public purposes, which include ``an affirmative obligation to 
facilitate the financing of affordable housing for low- and moderate-
income families in a manner consistent with their overall public 
purposes, while maintaining a strong financial condition and a 
reasonable economic return.'' \2\
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    \1\ See 12 U.S.C. 4561(a).
    \2\ See 12 U.S.C. 4501(7).
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    FHFA has established annual housing goals for Enterprise purchases 
of single-family and multifamily goals consistent with the requirements 
of the Safety and Soundness Act. The structure of the housing goals and 
the rules for determining how mortgage purchases are counted or not 
counted are defined in the housing goals regulation.\3\ The most recent 
rule established benchmark levels for the housing goals for 2018-
2020.\4\ This proposed rule would establish benchmark levels for 2021, 
but it would not make any other changes to the housing goals 
regulation.
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    \3\ See 12 CFR part 1282.
    \4\ See 83 FR 5878 (Feb. 12, 2018).
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    Single-family goals. The single-family goals defined under the 
Safety and Soundness Act include separate categories for home purchase 
mortgages for low-income families, very low-income families, and 
families that reside in low-income areas.\5\ FHFA has also established 
a subgoal within the low-income areas goal that is limited to families 
in low-income census tracts and moderate-income families in minority 
census tracts. Performance on the single-family home purchase goals is 
measured as the percentage of the total home purchase mortgages 
purchased by an Enterprise each year that qualify for each goal or 
subgoal. There is also a separate goal for refinancing mortgages for 
low-income families, and

[[Page 49313]]

performance on the refinancing goal is determined in a similar way.
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    \5\ The low-income areas housing goal includes (1) families in 
``low-income census tracts,'' defined as census tracts with median 
income less than or equal to 80 percent of AMI; (2) families with 
incomes less than or equal to area median income who reside in 
minority census tracts (defined as census tracts with a minority 
population of at least 30 percent and a tract median income of less 
than 100 percent of AMI); and (3) families with incomes less than or 
equal to 100 percent of area median income who reside in designated 
disaster areas.
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    Under the Safety and Soundness Act, the single-family housing goals 
are limited to mortgages on owner-occupied housing with one to four 
units total. The single-family goals cover conventional, conforming 
mortgages, defined as mortgages that are not insured or guaranteed by 
the Federal Housing Administration or another government agency and 
with principal balances that do not exceed the conforming loan limits 
for Enterprise mortgages.
    Two-part evaluation approach. The performance of the Enterprises on 
the housing goals is evaluated using a two-part approach, comparing the 
goal-qualifying share of the Enterprise's mortgage purchases to two 
separate measures: A benchmark level; and a market level. In order to 
meet a single-family housing goal, the percentage of mortgage purchases 
by an Enterprise that meet each goal must equal or exceed either the 
benchmark level or the market level for that year. The benchmark level 
is set prospectively by rulemaking based on various factors set forth 
in the Safety and Soundness Act.\6\ The market level is determined 
retrospectively for each year, based on the actual goal-qualifying 
share of the overall market as measured by the Home Mortgage Disclosure 
Act (HMDA) data for that year. The overall market that FHFA uses for 
setting both the prospective benchmark level and the retrospective 
market level consists of all single-family owner-occupied conventional 
conforming mortgages that would be eligible for purchase by either 
Enterprise. It includes loans purchased by the Enterprises as well as 
comparable loans held in a lender's portfolio. It also includes any 
loans that are part of a private label security (PLS), though very few 
such securities have been issued for conventional conforming mortgages 
since 2008.
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    \6\ See 12 U.S.C. 4562(e).
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    While both the benchmark level and the retrospective market level 
are designed to measure the current year's mortgage originations, the 
performance of the Enterprises on the housing goals includes all 
Enterprise purchases in that year, regardless of the year in which the 
loan was originated. This includes housing goals credit when the 
Enterprises acquire qualified seasoned loans. (Seasoned loans are loans 
that were originated in prior years and acquired by the Enterprise in 
the current year.)
    Multifamily goals. The multifamily goals defined under the Safety 
and Soundness Act include categories for mortgages on multifamily 
properties (properties with five or more units) with rental units 
affordable to low-income families and mortgages on multifamily 
properties with rental units affordable to very low-income families. 
FHFA has also established a small multifamily low-income subgoal for 
properties with 5-50 units. The multifamily housing goals include all 
Enterprise multifamily mortgage purchases, regardless of the purpose of 
the loan. The multifamily goals evaluate the performance of the 
Enterprises based on numeric targets, not percentages, for the number 
of affordable units in properties backed by mortgages purchased by an 
Enterprise. FHFA has not established a retrospective market level 
measure for the multifamily goals, due in part to a lack of 
comprehensive data about the multifamily market. As a result, FHFA 
currently measures Enterprise multifamily goals performance against the 
benchmark levels only.
    The Safety and Soundness Act requires that affordability for rental 
units under the multifamily goals be determined based on rents that 
``[do] not exceed 30 percent of the maximum income level of such income 
category, with appropriate adjustments for unit size as measured by the 
number of bedrooms.'' \7\ The housing goals regulation considers the 
net rent paid by the renter and, therefore, nets out any subsidy 
payments that the renter may receive, including housing assistance 
payments.
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    \7\ See 12 U.S.C. 4563(c). This affordability definition is 
sometimes referred to as the ``Brooke Amendment,'' which states that 
to be affordable at the 80 percent of area median income level, the 
rents must not exceed 30 percent of the renter's income which must 
not exceed 80 percent of the area median income. See https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_092214.html 
for a description of the Brooke Amendment and background on the 
notion of affordability embedded in the housing goals.
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B. Adjusting the Housing Goals

    If, after publication of a final rule establishing the housing 
goals for 2021, FHFA determines that any of the single-family or 
multifamily housing goals should be adjusted in light of market 
conditions, to ensure the safety and soundness of the Enterprises, or 
for any other reason, FHFA will take any steps that are necessary and 
appropriate to adjust that goal such as reducing the benchmark levels 
through the processes in the existing regulation. FHFA recognizes that 
2021 is likely to be a year of disrupted economic activity. While FHFA 
is taking this uncertainty into consideration in proposing the 
benchmark levels for 2021, FHFA may take other actions consistent with 
the Safety and Soundness Act and the Enterprise housing goals 
regulation based on new information or developments that occur after 
publication of a final rule.
    For example, under the Safety and Soundness Act and the Enterprise 
housing goals regulation, FHFA may reduce the benchmark levels in 
response to an Enterprise petition for reduction for any of the single-
family or multifamily housing goals in a particular year based on a 
determination by FHFA that: (1) Market and economic conditions or the 
financial condition of the Enterprise require a reduction; or (2) 
efforts to meet the goal or subgoal would result in the constraint of 
liquidity, over-investment in certain market segments, or other 
consequences contrary to the intent of the Safety and Soundness Act or 
the purposes of the Enterprises' charter acts.\8\
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    \8\ 12 CFR 1282.14(d).
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    The Safety and Soundness Act and the Enterprise housing goals 
regulation also take into account the possibility that achievement of a 
particular housing goal may or may not have been feasible for an 
Enterprise. If FHFA determines that a housing goal was not feasible for 
an Enterprise to achieve, then the statute and regulation provide for 
no further enforcement of that housing goal for that year.\9\
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    \9\ 12 CFR 1282.21(a); 12 U.S.C. 4566(b).
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    If FHFA determines that an Enterprise failed to meet a housing goal 
and that achievement of the housing goal was feasible, then the statute 
and regulation provide FHFA with discretion to require the Enterprise 
to submit a housing plan describing the specific actions the Enterprise 
will take to improve its performance. FHFA is requesting comments on 
factors that FHFA should consider in determining whether to require an 
Enterprise to submit a housing plan. For example, are there other 
Enterprise activities such as forbearance actions, loss mitigation 
efforts, loan modifications, and other market support activities that 
FHFA should take into account while reviewing Enterprise goals 
performance for 2021 on both the single-family and multifamily side? 
While FHFA is not proposing any change to the regulation regarding 
housing plans, FHFA welcomes input from the public on factors that FHFA 
should consider in making discretionary determinations on whether to 
require a housing plan.

C. Housing Goals Under Conservatorship

    On September 6, 2008, FHFA placed each Enterprise into 
conservatorship.

[[Page 49314]]

Although the Enterprises remain in conservatorship at this time, they 
continue to have the mission of supporting a stable and liquid national 
market for residential mortgage financing. FHFA has continued to 
establish annual housing goals for the Enterprises and to assess their 
performance under the housing goals each year during conservatorship.

III. Summary of Proposed Rule

    Due to the unexpectedly severe nature of the COVID-19 pandemic and 
associated economic uncertainty, FHFA is proposing benchmark levels for 
the single-family and multifamily goals for calendar year 2021 only. 
FHFA will subsequently conduct a new round of notice and comment 
rulemaking to establish benchmark levels for 2022 and beyond. The 
proposed benchmark levels are set forth below and would be the same as 
those for 2018-2020.

A. Proposed Benchmark Levels for the Single-Family Housing Goals for 
2021

    This proposed rule would establish the benchmark levels for the 
single-family housing goals and subgoal for 2021 as follows:

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                                                                                      Current        Proposed
                                                                                     benchmark       benchmark
                    Goal                                   Criteria                  level for       level for
                                                                                     2018-2020         2021
                                                                                     (percent)       (percent)
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Low-Income Home Purchase Goal..............  Home purchase mortgages on single-               24              24
                                              family, owner-occupied properties
                                              with borrowers with incomes no
                                              greater than 80 percent of area
                                              median income.
Very Low-Income Home Purchase Goal.........  Home purchase mortgages on single-                6               6
                                              family, owner-occupied properties
                                              with borrowers with incomes no
                                              greater than 50 percent of area
                                              median income.
Low-Income Areas Home Purchase Subgoal.....  Home purchase mortgages on single-               14              14
                                              family, owner-occupied properties
                                              with:
                                              Borrowers in census tracts
                                              with tract median income of no
                                              greater than 80 percent of area
                                              median income; or
                                              Borrowers with income no
                                              greater than 100 percent of area
                                              median income in census tracts
                                              where (i) tract income is less
                                              than 100 percent of area median
                                              income, and (ii) minorities
                                              comprise at least 30 percent of
                                              the tract population.
Low-Income Refinancing Goal................  Refinancing mortgages on single-                 21              21
                                              family, owner-occupied properties
                                              with borrowers with incomes no
                                              greater than 80 percent of area
                                              median income.
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    The single-family housing goals also include a Low-Income Areas 
Home Purchase Goal that the regulation defines as the benchmark level 
for the Low-Income Areas Home Purchase Subgoal plus an additional 
``disaster areas'' increment that FHFA determines each year based on 
Federal Emergency Management Agency declarations of disasters that are 
applicable to that year. The proposed rule would not make any change to 
the criteria or process for setting the additional ``disaster areas'' 
increment for 2021.

B. Proposed Benchmark Levels for the Multifamily Housing Goals for 2021

    The proposed rule would also establish the benchmark levels for the 
multifamily goal and subgoals for 2021 as follows:

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                                                                                      Current
                                                                                     benchmark       Proposed
                    Goal                                   Criteria                  level for       benchmark
                                                                                     2018-2020       level for
                                                                                      (units)      2021  (units)
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Low-Income Goal............................  Units affordable to families with           315,000         315,000
                                              incomes no greater than 80 percent
                                              of area median income in
                                              multifamily rental properties with
                                              mortgages purchased by an
                                              Enterprise.
Very Low-Income Subgoal....................  Units affordable to families with            60,000          60,000
                                              incomes no greater than 50 percent
                                              of area median income in
                                              multifamily rental properties with
                                              mortgages purchased by an
                                              Enterprise.
Low-Income Small Multifamily Subgoal.......  Units affordable to families with            10,000          10,000
                                              incomes no greater than 80 percent
                                              of area median income in small
                                              multifamily rental properties (5
                                              to 50 units) with mortgages
                                              purchased by an Enterprise.
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IV. Single-Family Housing Goals

    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 in previous years;
    4. The ability of the Enterprises 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.\10\ FHFA has considered each of these

[[Page 49315]]

seven statutory factors in setting the proposed benchmark levels for 
each of the single-family housing goals and subgoal.
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    \10\ 12 U.S.C. 4562(e)(2)(B).
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    In setting the benchmark levels for the single-family housing 
goals, FHFA typically relies on statistical market models to evaluate 
these statutory factors and generate a point forecast for each goal as 
well as a confidence interval for the point forecast. FHFA then 
considers other statutory factors, as well as other relevant policy 
issues, to select a specific point forecast within the confidence 
interval as the proposed benchmark level. However, due to the 
unexpectedly severe nature of the COVID-19 pandemic and the current 
associated uncertainty going forward, FHFA has determined that the data 
used to create the statistical market models is not sufficient to 
reflect economic conditions for 2021. As a result, FHFA is proposing to 
keep the benchmark levels for 2021 at the same level as for 2020.
    In proposing the benchmark levels for the single-family housing 
goals for 2021, FHFA considered the statutory factors, including the 
current economic conditions, national housing needs, recent market 
developments, and the past performance of the Enterprises on the 
housing goals.

Current Economic Conditions

    Uncertainty over public health and the economic impacts of the 
COVID-19 pandemic have dealt a severe blow to the U.S. economy. The 
sudden drop in economic activity has created widespread disruptions and 
resulted in an unprecedented level of job losses. The unemployment rate 
jumped from 3.5 percent in February to 14.7 percent in April.\11\ 
Inflation-adjusted consumer expenditures, which account for about two-
thirds of gross domestic product (GDP), declined 7.3 percent in March. 
On June 8, the Business Cycle Dating Committee of the National Bureau 
of Economic Research officially declared that the U.S. economy fell 
into a recession in February, ending one of the longest economic 
expansions in history.\12\
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    \11\ The Bureau of Labor Statistics (BLS), which publishes the 
unemployment rate and other labor statistics each month, noted that 
the April unemployment rate probably understated the share of 
unemployed workers in the labor force because many workers who 
should have been classified as ``unemployed on temporary layoff'' 
were most likely misclassified as ``employed absent from work'' in 
the Current Population Survey. A BLS analysis of the underlying data 
suggests that, had that misclassification not occurred, the April 
unemployment rate would have been nearly 5 percentage points higher. 
See Bureau of Labor Statistics, ``Frequently Asked Questions: The 
Impact of the Coronavirus (COVID-19) Pandemic on the Employment 
Situation for April 2020'' (May 8, 2020), https://go.usa.gov/xvM73.
    \12\ See https://www.nber.org/cycles/june2020.html.
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    The depth and duration of this recession and the path to economic 
recovery remain highly uncertain. According to the most recent estimate 
published by the Congressional Budget Office (CBO),\13\ the COVID-19 
pandemic and associated social distancing triggered a sharp contraction 
in output in the second quarter of 2020 but the CBO projects that real 
Gross Domestic Product (GDP) will grow rapidly in the second half of 
2020 and the first half of 2021. Strong GDP growth is projected to 
continue thereafter but at a slower pace. The unemployment rate is 
projected to peak at over 14 percent in the third quarter of this year 
and then to fall quickly as output increases in the second half of 2020 
and throughout 2021. Nonetheless, real GDP growth is projected to be 
negative 5.8 percent for 2020 while the unemployment rate will be 10.6 
percent for 2020. However, the CBO notes that there is an ``unusually 
high degree of uncertainty'' surrounding its projections due to the 
nature of the pandemic and the behavioral and policy responses aimed at 
containing its spread, and the difficulties of recording and compiling 
economic data during the unusually strong economic disruption in the 
second quarter of 2020.
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    \13\ Congressional Budget Office, ``An Update to the Economic 
Outlook: 2020-2030,'' published on July 2, 2020, accessed on 7/8/
2020 at https://www.cbo.gov/publication/56442.
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    The implications for the primary and secondary mortgage markets are 
still unfolding as policy makers consider responses to the economic 
disruption caused by COVID-19. Congress passed the CARES Act to address 
some of the most pressing impacts of the economic disruption, including 
by extending unemployment benefits. Nevertheless, the availability of 
credit has contracted in the mortgage market due to a variety of 
factors, including additional down payment and loan-to-value 
restrictions and generally tightened underwriting requirements.
    FHFA is monitoring how these unfolding changes may impact various 
segments of the market, including those targeted by the housing goals. 
For instance, while the economic disruption has resulted in tightening 
of credit, job losses and uncertainty may also lead many low-income 
households to exit the market of potential homebuyers. However, the 
size of the impact on the share of low-income households among all home 
purchase mortgages is uncertain.

National Housing Needs

    At the start of 2020, the American housing market overall was in a 
strong position. After falling for 12 consecutive years, the U.S. 
homeownership rate reached 65.1 percent in 2019, with first-time 
homebuyers becoming an increasingly larger share of the homebuying 
market, helping to drive its overall expansion.\14\ Affordability 
challenges for low-income households remained, however. While interest 
rates have remained low since the recession, home prices have climbed 
steadily, with real prices back within 2 percent of their 2006 peak at 
the end of 2018, according to the FHFA House Price Index. The ratio of 
median home price to median household income is a common yardstick for 
measuring affordability, indicating how difficult it is for would-be 
buyers to qualify for a mortgage and save for a down payment. 
Nationwide, this ratio declined from a peak of 4.7 in 2005 to a low of 
3.3 in 2011 and then rose to 4.1 in 2018.\15\ However, during 2019, 
house price growth was starting to align with the growth in median 
household incomes.
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    \14\ U.S. Census Bureau, ``Quarterly Residential Vacancies and 
Homeownership,'' Fourth Quarter 2019, Release Number: CB20-05, 
available at https://www.census.gov/housing/hvs/files/qtr419/Q419press.pdf.
    \15\ Joint Center for Housing Studies of Harvard University, 
``The State of the Nation's Housing 2019,'' available at https://www.jchs.harvard.edu/state-nations-housing-2019.
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Recent Market Developments

    In response to the COVID-19 pandemic, financial markets endured a 
severe dislocation in March, and housing markets were no exception. 
What is known to date is preliminary, as key housing market 
indicators--on housing construction, sales, prices, inventory, and 
more--indicate that the extent of disruption is extensive. At the same 
time housing supply remains tight, providing support to house prices. 
At least initially, the combination of social distancing measures and 
heightened economic concerns caused home sales to drop significantly 
and homebuilders to pull back on new housing starts. Single-family 
housing starts declined 17.5 percent in March and another 25.4 percent 
in April. Housing starts rose 4.3 percent in May, but this still leaves 
the rate down 23.2 percent compared to May 2019.\16\
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    \16\ U.S. Census Bureau, ``Monthly New Residential 
Construction,'' May 2020, Release Number: CB20-90, available at 
https://www.census.gov/construction/nrc/pdf/newresconst.pdf.
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    The full impact of the COVID-19 pandemic on the low-income home 
purchase market is unknown. However, the levels of output and 
employment

[[Page 49316]]

remain far below their pre-pandemic levels, and significant uncertainty 
remains about the timing and strength of the recovery. It is likely 
that the full picture of the COVID-19 pandemic's impact on housing 
markets will not be known until well after the virus is contained. 
While the Enterprises showed strong goals performance in 2020 before 
the onset of the COVID-19 pandemic, it is unclear whether this will 
continue in the light of evolving market conditions and continued 
tightening of underwriting by lenders.
    Thus, while recent Enterprise performance on the housing goals has 
tended to exceed the benchmark levels set by FHFA, the economic 
disruption and uncertainty seen so far in 2020 support keeping the 
levels unchanged from 2018-2020.

Past Performance of the Enterprises

    Table 1 provides the annual performance of both Enterprises on the 
single-family housing goals between 2010 and 2019.\17\ The performance 
of the Enterprises in the two most recent years (2018 and 2019) shows 
that both Enterprises exceeded the benchmark levels set by FHFA for 
each of the single-family housing goals.
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    \17\ The 2019 data is preliminary data reported by the 
Enterprises. FHFA will make the official determinations on 
Enterprise performance under the 2019 housing goals later in 2020.
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    While the final determinations of Enterprise goal compliance for 
2019 are pending FHFA's determination of the market level based on HMDA 
data, both Enterprises report that their performance exceeded the 
benchmark levels, continuing the recent trend of Enterprise performance 
above the benchmark levels for the single-family housing goals for 
2018-2020.

                                         Table 1--Enterprise Single-Family Housing Goals Performance (2010-2019)
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                                                                  2010     2011     2012     2013     2014     2015     2016     2017     2018     2019
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                                                              Low-Income Home Purchase Goal
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Actual Market.................................................     27.2     26.5     26.6       24     22.8     23.6     22.9     24.3     25.5      TBD
Benchmark.....................................................       27       27       23       23       23       24       24       24       24       24
Fannie Mae Performance........................................   * 25.1   * 25.8     25.6     23.8     23.5   * 23.5     22.9     25.5     28.2     27.8
Freddie Mac Performance.......................................     27.8   * 23.3     24.4   * 21.8     * 21   * 22.3     23.8   * 23.2     25.8     27.4
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                                                           Very Low-Income Home Purchase Goal
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Actual Market.................................................      8.1        8      7.7      6.3      5.7      5.8      5.4      5.9      6.5      TBD
Benchmark.....................................................        8        8        7        7        7        6        6        6        6        6
Fannie Mae Performance........................................    * 7.2    * 7.6      7.3      * 6      5.7    * 5.6    * 5.2      5.9      6.7      6.5
Freddie Mac Performance.......................................      8.4    * 6.6      7.1    * 5.5    * 4.9    * 5.4      5.7    * 5.7      6.3      6.8
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                                                           Low-Income Areas Home Purchase Goal
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Actual Market.................................................       24       22     23.2     22.1     22.1     19.8     19.7     21.5     22.6      TBD
Benchmark.....................................................       24       24       20       21       18       19       17       18       18       19
Fannie Mae Performance........................................     24.1     22.4     22.3     21.6     22.7     20.4     20.2     22.9     25.1     24.5
Freddie Mac Performance.......................................   * 23.8   * 19.2     20.6     * 20     20.1       19     19.9     20.9     22.6     22.9
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                                                         Low-Income Areas Home Purchase Subgoal
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Actual Market.................................................     12.1     11.4     13.6     14.2       15     15.2     15.9     17.1       18      TBD
Benchmark.....................................................       13       13       11       11       11       14       14       14       14       14
Fannie Mae Performance........................................     12.4     11.6     13.1       14     15.5     15.6     16.2     18.3     20.1     19.5
Freddie Mac Performance.......................................   * 10.8    * 9.2     11.4     12.3     13.6     14.5     15.6     16.4     17.3     18.0
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                                                                Low-Income Refinance Goal
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Actual Market.................................................     20.2     21.5     22.3     24.3       25     22.5     19.8     25.4     30.7      TBD
Benchmark.....................................................       21       21       20       20       20       21       21       21       21       21
Fannie Mae Performance........................................     20.9     23.1     21.8     24.3     26.5     22.1   * 19.5     24.8     31.2     23.8
Freddie Mac Performance.......................................       22     23.4     22.4     24.1     26.4     22.8       21     24.8     27.3     22.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

    Tables 2 through 5 provide additional detail on the recent 
performance of the Enterprises for each of the goals and the subgoal. 
The tables show the number as well as the share of goal-qualifying 
loans that the Enterprises acquired from 2013-2019. In 2018 and 2019, 
the Enterprises increased the number of goals-qualifying loans they 
acquired at the same time that their overall single-family mortgage 
purchase volume increased.

                                                         Table 2--Low-Income Home Purchase Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Performance
                         Year                          -------------------------------------------------------------------------------------------------
                                                            2013          2014          2015          2016          2017          2018          2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual Market.........................................         24.0%         22.8%         23.6%         22.9%         24.3%         25.5%           TBD
Benchmark.............................................           23%           23%           24%           24%           24%           24%           24%
Fannie Mae Performance:

[[Page 49317]]

 
    Low-Income Home Purchase Mortgages................       193,660       177,846       188,891       221,628       263,296       294,559     * 298,702
    Total Home Purchase Mortgages.....................       814,066       757,870       802,432       966,800     1,032,567     1,044,098   * 1,075,032
    Low-Income % of Home Purchase Mortgages...........         23.8%         23.5%         23.5%         22.9%         25.5%       28.21/o       * 27.8%
Freddie Mac Performance:
    Low-Income Home Purchase Mortgages................        93,425       108,948       129,455       153,434       165,555       199,429     * 235,811
    Total Home Purchase Mortgages.....................       429,086       519,731       579,340       644,988       713,901       774,394     * 860,669
    Low-Income % of Home Purchase Mortgages...........         21.8%         21.0%         22.3%         23.8%         23.2%         25.8%       * 27.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.


                                                       Table 3--Very Low-Income Home Purchase Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Performance
                         Year                          -------------------------------------------------------------------------------------------------
                                                            2013          2014          2015          2016          2017          2018          2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual Market.........................................         6.30%         5.70%         5.80%         5.40%         5.90%         6.50%           TBD
Benchmark.............................................            7%            7%            6%            6%            6%            6%            6%
Fannie Mae Performance:
    Very Low-Income Home Purchase Mortgages...........        48,810        42,872        45,022        49,932        60,561        69,952      * 70,214
    Total Home Purchase Mortgages.....................       814,066       757,870       802,432       966,800     1,032,567     1,044,098   * 1,075,032
    Very Low-Income % of Home Purchase Mortgages......          6.0%          5.7%          5.6%          5.2%          5.9%          6.7%        * 6.5%
Freddie Mac Performance:
    Very Low-Income Home Purchase Mortgages...........        23,705        25,232        31,146        36,837        40,848        48,823      * 58,136
    Total Home Purchase Mortgages.....................       429,086       519,731       579,340       644,988       713,901       774,394     * 860,669
    Very Low-Income % of Home Purchase Mortgages......          5.5%          4.9%          5.4%          5.7%          5.7%          6.3%        * 6.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.


                                                     Table 4--Low-Income Areas Home Purchase Subgoal
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Performance
                         Year                          -------------------------------------------------------------------------------------------------
                                                            2013          2014          2015          2016          2017          2018          2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual Market.........................................         14.2%         15.2%         15.2%         15.9%         17.1%         18.0%           TBD
Benchmark.............................................           11%           11%           14%           14%           14%           14%           14%
Fannie Mae Performance:
    Low-Income Area Home Purchase Mortgages...........        86,430        91,691        99,723       125,956       152,102       167,265     * 166,709
    High-Minority Area Home Purchase Mortgages........        27,425        25,650        25,349        30,535        36,942        42,099      * 42,732
    Subgoal-Qualifying Total Home Purchase Mortgages..       113,855       117,341       125,072       156,491       189,044       209,364     * 209,441
    Total Home Purchase Mortgages.....................       814,066       757,870       802,432       966,800     1,032,567     1,044,098   * 1,075,032
    Low-Income Area % of Home Purchase Mortgages......         14.0%         15.5%         15.6%         16.2%         18.3%         20.1%       * 19.5%
Freddie Mac Performance:
    Low-Income Area Home Purchase Mortgages...........        40,444        55,987        67,172        80,805        94,961       106,815     * 123,953
    High-Minority Area Home Purchase Mortgages........        12,177        14,808        16,601        19,788        22,190        27,310      * 30,770

[[Page 49318]]

 
    Subgoal-Qualifying Total Home Purchase Mortgages..        52,621        70,795        83,773       100,593       117,151       134,125     * 154,723
    Total Home Purchase Mortgages.....................       429,086       519,731       579,340       644,988       713,901       774,394     * 860,669
    Low-Income Area % of Home Purchase Mortgages......         12.3%         13.6%         14.5%         15.6%         16.4%         17.3%       * 18.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.


                                                           Table 5--Low-Income Refinance Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Performance
                         Year                          -------------------------------------------------------------------------------------------------
                                                            2013          2014          2015          2016          2017          2018          2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual Market.........................................         24.3%         25.0%         22.5%         19.8%         25.4%         30.7%           TBD
Benchmark.............................................           20%           20%           21%           21%           21%           21%           21%
Fannie Mae Performance:
    Low-lncome Refinance Mortgages....................       531,611       222,329       231,380       248,698       223,768       196,230     * 234,249
    Total Refinance Mortgages.........................     2,186,541       840,506     1,045,258     1,274,342       902,123       629,816     * 985,932
    Low-lncome % of Refinance Mortgages...............         24.3%         26.5%         22.1%         19.5%         24.8%         31.2%       * 23.8%
Freddie Mac Performance:
    Low-Income Refinance Mortgages....................       320,962       131,921       182,594       174,708       143,475       104,843     * 159,322
    Total Refinance Mortgages.........................     1,331,034       514,936       800,369       830,888       578,548       384,593     * 712,376
    Low-lncome % of Refinance Mortgages...............         24.1%         25.6%         22.8%         21.0%         24.8%         27.3%       * 22.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

Proposed Benchmark Levels for the Single-Family Housing Goals for 2021

    FHFA is proposing to establish the benchmark levels for each of the 
single-family housing goals and the subgoal for 2021 at the same levels 
that applied for 2018-2020. While recent Enterprise performance and 
market data have tended to exceed the established benchmark levels, 
FHFA expects that both the market levels and Enterprise performance 
could decline in 2021 due to impacts related to economic disruption 
caused by the COVID-19 pandemic. Information on Enterprise goals 
performance remains confidential until it is reported after the end of 
the year. However, FHFA monitors this confidential information on a 
regular basis. FHFA recognizes that the performance trends in the first 
half of 2020 reflect disruption due to COVID-19, and FHFA expects this 
to continue into 2021. Based on the above factors, FHFA believes that 
extending the benchmark levels from 2020 to 2021 will provide 
achievable yet challenging targets for the Enterprises.

V. Multifamily Housing Goals

    The Safety and Soundness Act requires FHFA to consider the 
following six factors in setting the multifamily housing goals:
    1. National multifamily mortgage credit needs and the ability of 
the Enterprises to provide additional liquidity and stability for the 
multifamily mortgage market;
    2. The performance and effort of the Enterprises 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 Enterprises 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 
Enterprises.\18\
---------------------------------------------------------------------------

    \18\ 12 U.S.C. 4563(a)(4).
---------------------------------------------------------------------------

    FHFA has considered each of these statutory factors in setting the 
proposed benchmark levels for each of the multifamily goals.
    The multifamily housing goals are measured based on the total 
volume of affordable multifamily mortgage purchases rather than on a 
percentage of multifamily mortgage purchases. Unlike the single-family 
housing goals, performance on the multifamily housing goals is measured 
solely against a benchmark level, without any retrospective market 
measure. The absence of a retrospective market measure for the 
multifamily housing goals results, in part, from the lack of 
comprehensive data about the multifamily mortgage market. Unlike the 
single-family market, for which HMDA provides a reasonably 
comprehensive dataset about single-family mortgage originations each 
year, the multifamily market (including the affordable multifamily 
market segment) has no comparable source. Consequently, it can be 
difficult to correlate different datasets that usually rely on 
different reporting formats.
    Another difference between the single-family and multifamily goals 
is that there are separate single-family housing goals for home 
purchase and refinancing mortgages, while the multifamily goals include 
all Enterprise multifamily mortgage purchases,

[[Page 49319]]

regardless of the purpose of the loan. In addition, unlike the single-
family housing goals, the multifamily housing goals are measured based 
on the total volume of affordable multifamily mortgage purchases rather 
than on a percentage of multifamily mortgage purchases. The use of 
total volumes, which FHFA measures by the number of eligible units, 
rather than percentages of each Enterprises' overall multifamily 
purchases, requires that FHFA take into account the expected size of 
the overall multifamily mortgage market and the affordable share of the 
market, as well as the expected volume of the Enterprises' overall 
multifamily purchases and the affordable share of those purchases. The 
lack of comprehensive data for the multifamily mortgage market is even 
more acute with respect to the segments of the market that are targeted 
to low-income families, defined as families with incomes at or below 80 
percent of AMI, and very low-income families, defined as families with 
incomes at or below 50 percent of AMI. As required by the Safety and 
Soundness Act, FHFA determines affordability of multifamily units based 
on a unit's rent and utility expenses not exceeding 30 percent of the 
area median income standard for low- and very low-income families.\19\
---------------------------------------------------------------------------

    \19\ 12 U.S.C. 4563(c).
---------------------------------------------------------------------------

Current Economic Conditions, National Housing Needs, and Recent Market 
Developments

    Even as late as February 2020, the multifamily originations market 
appeared as strong as it had been in 2019. At that time, FHFA noted a 
number of trends that have continued for multiple years, including the 
continued market focus on the construction of high-end, luxury 
apartments and the steady decline in the number of low-cost rentals. 
While completed rentals nearly reached a 30-year high in 2018 with an 
addition of 360,000 units, supply dropped by 340,000 units between 2016 
and 2017.\20\ Nationwide, there has been a loss of four million low-
cost rental units (rents less than $800 per month) since 2011.\21\ 
There is a particularly acute shortfall of affordable units for 
extremely low-income renters (earning up to 30 percent of area median 
income) that was acknowledged as a persistent problem even before the 
COVID-19 pandemic began. For instance, as a recent report from the 
Department of Housing and Urban Development \22\ notes, it is 
increasingly difficult for housing developers and landlords to provide 
decent rental housing at rates that are affordable to American working 
families and more vulnerable households. In 2017, the most recent year 
for which such data are available, only 59 affordable units were 
available per 100 very low-income renter households, and only 40 units 
were available per 100 extremely low-income renter households.
---------------------------------------------------------------------------

    \20\ Joint Center for Housing Studies of Harvard University, 
``The State of the Nation's Housing 2019,'' available at 
www.jchs.harvard.edu/research/state_nations_housing.
    \21\ Id.
    \22\ U.S. Department of Housing and Urban Development, ``Worst 
Case Housing Needs: 2019 Report to Congress'', June 19, 2020 
accessed on 7/10/2020 at https://www.huduser.gov/PORTAL/sites/default/files/pdf/worst-case-housing-needs-2020.pdf.
---------------------------------------------------------------------------

    The full impact on the stock of low-cost rental units in the wake 
of the COVID-19 pandemic and broader economic downturn is not yet 
known. In the short-term, the pandemic might exacerbate the already-
constrained supply as lower housing mobility rates limit the number of 
low-cost options for renters and current residents stay in place. As 
one study using the 2018 American Community Survey data shows, demand 
for low-cost units was already high while their availability was 
extremely low.\23\ Additional tightening at the low end of the market 
could pose significant affordability challenges to low- and middle-
income renters.
---------------------------------------------------------------------------

    \23\ Joint Center for Housing Studies of Harvard University, 
``The Continuing Decline of Low-Cost Rentals,'' May 11, 2020 
accessed on 6/30/2020 at https://www.jchs.harvard.edu/blog/the-continuing-decline-of-low-cost-rentals/.
---------------------------------------------------------------------------

    Further, renters living in single-family homes and smaller 
multifamily buildings, along with the owners of those properties, are 
more likely to be negatively affected by the COVID-19 economic 
downturn. According to one study, over half of renters with at-risk 
wages \24\ due to the pandemic live in single-family rental housing 
with 1-4 units. The same study estimates that nearly 20 percent of 
renters in small multifamily (5 to 50 units) dwellings may have 
difficulty paying full rent if at-risk wages are lost, compared to 12 
percent of renters living in larger dwellings. This could, in turn, 
make it difficult for the owners of those properties, who are more 
likely to be small, individual investors, to remain financially stable 
through the pandemic.\25\
---------------------------------------------------------------------------

    \24\ ``At risk wages'' are wages associated with ``At Risk 
Jobs'' which are defined as those in services, retail, recreation, 
transportation and travel, and oil extraction. Joint Center for 
Housing Studies of Harvard University, ``Pandemic Will Worsen 
Housing Affordability for Service, Retail, and Transportation 
Workers'' March 30, 2020 accessed on 6/30/2020 at https://www.jchs.harvard.edu/blog/pandemic-will-worsen-housing-affordability-for-service-retail-and-transportation-workers/.
    \25\ Joint Center for Housing Studies of Harvard University, 
``COVID-19 Rent Shortfalls in Small Buildings,'' May 26, 2020 
accessed on 6/30/2020 at https://www.jchs.harvard.edu/blog/covid-19-rent-shortfalls-in-small-buildings/.
---------------------------------------------------------------------------

Conservatorship Scorecard Caps

    Enterprise performance on the multifamily housing goals is heavily 
influenced by the caps on total multifamily business that FHFA has 
established as conservator of the Enterprises. The multifamily volume 
caps are intended to further FHFA's conservatorship goal: Maintaining 
the presence of the Enterprises as a backstop for the multifamily 
finance market, while not impeding the participation of private 
capital. The multifamily volume caps reflect an Enterprise share of the 
multifamily origination market that FHFA has determined to be an 
appropriate market share for the Enterprises during normal market 
conditions. The multifamily volume caps are intended to prevent the 
Enterprises from crowding out other capital sources and restrain the 
rapid growth of the Enterprises' multifamily businesses that started in 
2011.
    In September 2019, FHFA established multifamily loan purchase caps 
at $100 billion for each Enterprise during the five quarters beginning 
on October 1, 2019, and ending on December 31, 2020. The new cap 
framework requires that each Enterprise meet a target of 37.5 percent 
of its multifamily business as mission-driven, affordable housing. 
There is significant overlap between the types of multifamily mortgages 
that count toward the conservatorship scorecard target of 37.5 percent 
and the multifamily mortgages that contribute to the performance of the 
Enterprises under the affordable housing goals.
    While the conservatorship scorecard caps and target level for 
mission-driven loans play a significant role in determining the 
multifamily purchase volume and affordable share for the Enterprise 
multifamily businesses, the multifamily housing goals target specific 
segments of the multifamily business and ensure appropriate Enterprise 
focus on those segments as required by the Safety and Soundness Act. In 
proposing benchmark levels for the Enterprise housing goals, FHFA has 
considered the required statutory factors and is proposing benchmark 
levels that would be achievable if the conservatorship scorecard caps 
and target levels for 2021 are similar to the conservatorship scorecard 
limits in effect for 2020. If the conservatorship scorecard has 
established the multifamily purchase

[[Page 49320]]

volume caps applicable for 2021 at the time FHFA publishes a final rule 
setting benchmark levels for the multifamily housing goals, FHFA may 
adjust the benchmark levels based on those purchase volume caps.

Past Performance on the Multifamily Low-Income Housing Goal

    The multifamily low-income housing goal is based on the total 
number of rental units in multifamily properties financed by mortgages 
purchased by the Enterprises that are affordable to low-income 
families, defined as families with incomes less than or equal to 80 
percent of the area median income. Since 2016, each Enterprise has 
performed significantly above the benchmark level for the multifamily 
low-income housing goal each year.

                                                          Table 6--Low-Income Multifamily Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Year                            2012         2013         2014         2015         2016         2017         2018         2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Benchmark............................      285,000      265,000      250,000      300,000      300,000      300,000      315,000      315,000
Freddie Mac Benchmark...........................      225,000      215,000      200,000      300,000      300,000      300,000      315,000      315,000
Fannie Mae Performance:
    Low-Income Multifamily Units................      375,924      326,597      262,050      307,510      352,368      401,145      421,813    * 384,572
    Total Multifamily Units.....................      501,256      430,751      372,072      468,798      552,785      630,868      628,230    * 596,137
    Low-Income % Total..........................        75.0%        75.8%        70.4%        65.6%        63.7%        63.6%        67.1%      * 64.5%
Freddie Mac Performance:
    Low-Income Multifamily Units................      298,529      254,628      273,434      379,042      406,958      408,096      474,062    * 455,451
    Total Multifamily Units.....................      377,522      341,490      366,377      514,275      597,399      630,037      695,587    * 661,417
    Low-Income % of Total Units.................        79.1%        74.6%        74.6%        73.7%        68.1%        64.8%        68.2%      * 68.9%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

Past Performance on the Multifamily Very Low-Income Housing Subgoal

    The multifamily very low-income housing subgoal includes units 
affordable to very low-income families, defined as families with 
incomes no greater than 50 percent of area median income. Both 
Enterprises have surpassed the benchmark level for the multifamily very 
low-income housing subgoal by a significant margin in recent years.

                                                        Table 7--Very Low-Income Multifamily Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Year                            2012         2013         2014         2015         2016         2017         2018         2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Benchmark............................       80,000       70,000       60,000       60,000       60,000       60,000       60,000       60,000
Freddie Mac Benchmark...........................       59,000       50,000       40,000       60,000       60,000       60,000       60,000       60,000
Fannie Mae Performance:
    Very Low-Income Multifamily Units...........      100,878       78,071       60,542       69,078       65,910       82,674       80,891     * 78,835
    Total Multifamily Units.....................      501,256      430,751      372,072      468,798      552,785      630,868      628,230    * 596,137
    Very Low-Income % of Total Units............        21.7%        18.1%        16.3%        14.7%        11.9%        13.1%        12.9%      * 13.2%
Freddie Mac Performance:
    Very Low-Income Multifamily Units...........       60,084       56,742       48,689       76,935       73,030       92,274      105,612    * 112,785
    Total Home Purchase Mortgages...............      377,522      341,490      366,377      514,275      597,399      630,037      695,587    * 661,417
    Very Low-Income % of Total Units............        15.9%        16.6%        13.3%        15.0%        12.2%        14.6%        15.2%      * 17.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

Past Performance on the Small Multifamily Low-Income Housing Subgoal

    The small multifamily low-income housing subgoal is based on the 
total number of units in small multifamily properties financed by 
mortgages purchased by the Enterprises that are affordable to low-
income families, defined as families with incomes less than or equal to 
80 percent of the area median income. A small multifamily property is 
defined as a property with 5 to 50 units. Both Enterprises have met the 
small multifamily low-income housing subgoal each year in recent years.

[[Page 49321]]



                                                    Table 8--Small (5-50) Low-Income Multifamily Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Year                            2012         2013         2014         2015         2016         2017         2018         2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Low-Income Multifamily Benchmark..........  ...........  ...........  ...........        6,000        8,000       10,000       10,000       10,000
Fannie Mae Performance:
    Small Low-Income Multifamily Units..........       16,801       13,827        6,732        6,731        9,312       12,043       11,890     * 17,782
    Total Small Multifamily Units...............       26,479       21,764       11,880       11,198       15,211       20,375       17,894     * 25,565
    Low-Income % of Total Small Multifamily             63.5%        63.5%        56.7%        60.1%        61.2%        59.1%        66.4%      * 69.6%
     Units......................................
Freddie Mac Performance:
    Small Low-Income Multifamily Units..........          829        1,128        2,076       12,801       22,101       39,473       39,353     * 34,847
    Total Small Multifamily Units...............        2,194        2,375        4,659       21,246       33,984       55,116       53,893     * 46,862
    Low-Income % of Total Small Multifamily             37.8%        47.5%        44.6%        60.3%        65.0%        71.6%        73.0%      * 74.4%
     Units......................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

Proposed Benchmark Levels for the Multifamily Housing Goals for 2021

    FHFA is proposing to establish the benchmark levels for each of the 
multifamily housing goal and subgoals for 2021 at the same levels that 
applied for 2018-2020. In proposing the benchmark levels for the 
multifamily low-income housing goal and the multifamily very low-income 
housing goal, FHFA considered the statutory factors including current 
economic conditions, national housing needs, recent market 
developments, the most recent conservatorship scorecard cap levels, and 
the past performance of the Enterprises in meeting each goal.
    Due to the relatively low volume of small multifamily loans 
purchased by each Enterprise, the conservatorship scorecard cap has 
less impact on the ability of the Enterprises to meet the small 
multifamily low-income housing goal. Based on the recent performance of 
the Enterprises on the goal, FHFA believes the benchmark levels for 
2018-2020 continue to be appropriate for 2021 to ensure that the 
Enterprises maintain a meaningful presence in the market for small 
multifamily loans.
    While the recent performance of the Enterprises on the multifamily 
housing goals suggests that each Enterprise may be able to meet a 
higher benchmark level, FHFA has also considered a variety of factors 
including recent market trends and especially the economic disruption 
due to the COVID-19 emergency that support keeping the benchmark levels 
for the multifamily housing goals at the same level as the 2018-2020 
goals. Based on the above factors, FHFA believes that extending the 
benchmark levels from 2020 to 2021 \26\ will provide achievable yet 
challenging targets for the Enterprises.
---------------------------------------------------------------------------

    \26\ The benchmark level for the Low-Income Areas Purchase goal 
will be set by FHFA notice in 2021 pursuant to 12 CFR 1282.12(e). 
The Low-Income Areas Purchase goal has a disaster component that is 
dependent on the Federal disaster declarations in place at the 
beginning of each calendar year. The regulation defines ``designated 
disaster area'' as ``any census tract that is located in a county 
designated by the federal government as adversely affected by a 
declared major disaster administered by FEMA, where individual 
assistance payments were authorized by FEMA.'' 12 CFR 1282.1 
(emphasis added). While most of the country has been declared a 
disaster area by reason of COVID-19, those declarations have not 
been accompanied by FEMA authorizations of individual assistance 
payments.
---------------------------------------------------------------------------

VI. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. 3501 et seq.) requires that 
regulations involving the collection of information receive clearance 
from the Office of Management and Budget (OMB). The proposed rule does 
not contain any information collection requirement that would require 
OMB approval under the Paperwork Reduction Act. Therefore, FHFA has not 
submitted the rule to OMB for review.

VII. 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 
proposed rule under the Regulatory Flexibility Act. The General Counsel 
of FHFA certifies that the proposed rule, if adopted as a final rule, 
will not have a significant economic impact on a substantial number of 
small entities because the regulation applies only to Fannie Mae and 
Freddie Mac, 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 proposes to amend 
part 1282 of Title 12 of the Code of Federal Regulations as follows:

CHAPTER XII--FEDERAL HOUSING FINANCE AGENCY

SUBCHAPTER E--HOUSING GOALS AND MISSION

PART 1282--ENTERPRISE HOUSING GOALS AND MISSION

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

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


[[Page 49322]]


0
2. Section 1282.12 is amended 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 2021 shall be 24 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 2021 shall be 6 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 2021 shall be 14 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 2021 shall be 21 percent of the 
total number of refinancing mortgages purchased by that Enterprise in 
each year that finance owner-occupied single-family properties.
* * * * *
0
3. Section 1282.13 is amended by revising paragraphs (b) through (d) to 
read as follows:


Sec.  1282.13  Multifamily special affordable housing goal and 
subgoals.

* * * * *
    (b) Multifamily low-income housing goal. The benchmark level for 
each Enterprise's purchases of mortgages on multifamily residential 
housing affordable to low-income families shall be at least 315,000 
dwelling units affordable to low-income families in multifamily 
residential housing financed by mortgages purchased by the Enterprise 
for 2021.
    (c) Multifamily very low-income housing subgoal. The benchmark 
level for each Enterprise's purchases of mortgages on multifamily 
residential housing affordable to very low-income families shall be at 
least 60,000 dwelling units affordable to very low-income families in 
multifamily residential housing financed by mortgages purchased by the 
Enterprise for 2021.
    (d) Small multifamily low-income housing subgoal. The benchmark 
level for each Enterprise's purchases of mortgages on small multifamily 
properties affordable to low-income families shall be at least 10,000 
dwelling units affordable to low-income families in small multifamily 
properties financed by mortgages purchased by the Enterprise for 2021.

Mark A. Calabria
Director, Federal Housing Finance Agency.
[FR Doc. 2020-15959 Filed 8-12-20; 8:45 am]
BILLING CODE 8070-01-P