Fannie, Freddie release plans to serve underserved markets

Fannie Mae and Freddie Mae have released new plans to increase access to mortgages for low- to moderate-income families in underserved markets.

The Federal Housing Finance Agency announced May 8 it it is seeking public input on Fannie Mae and Freddie Mac’s proposed Underserved Markets Plans under the Duty to Serve program.  Comments on the plans are due by July 10.

“I strongly encourage stakeholders to submit feedback on Fannie Mae and Freddie Mac’s proposed Duty to Serve Underserved Markets Plans,” FHFA Director Melvin L. Watt said in a news release.  “FHFA will evaluate stakeholder input as part of our review process to ensure that the plans help the Enterprises meet their statutory obligations in a safe and sound manner.”

The FHFA issued a final rule on Dec. 13, 2016 to implement the Duty to Serve provisions mandated by the Housing and Economic Recovery Act of 2008. The rule requires both Freddie Mac and Freddie Mac to adopt a three-year Underserved Markets Plan to fulfill the mandate. The draft plans aim to address the needs of the nation’s most underserved housing markets in three key areas: manufactured housing, affordable housing preservation and rural housing.

If the FHFA does not object to the plans, they will take effect on Jan. 1, 2018.

“Fannie Mae welcomes the opportunity to create housing opportunities that are affordable and we are prepared to bring all our experience, knowledge, and capabilities to bear in fulfilling our Duty to Serve.” Jeffery Hayward, Executive Vice President and Head of Multifamily, Fannie Mae, said in a news release. “We recognize that there are no easy solutions to the tough and often long-standing challenges that characterize underserved markets. It will take research, education, and innovative partnerships to make housing more affordable in all markets.”

The Duty to Serve program presents “a welcome opportunity to lead the mortgage industry and help more American families with their housing needs,” Danny Gardner, Freddie Mac’s vice president of affordable lending and access to credit, said in a news release.

“Our plan includes increased loan purchases in these underserved markets, new offerings, market research, increased homebuyer education, community engagement and local outreach,” Gardner added in the release. “We intend to work with our customers and the many dedicated organizations that are deeply knowledgeable about these markets at the local, regional and national levels.”

More information about the plans are available on the FHFA website.