FHFA Offers Affordable Housing For Minority Communities

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The FHA’s proposed affordable housing targets for Fannie Mae and Freddie Mac from 2022 to 2024 include a subcategory covering lending to minority neighborhoods for the first time.

A new home buying target in a plan released Wednesday will set a 10 percent target for qualified single-family lending in census areas that meet certain demographic and income targets. Minorities must constitute at least 30% of the population of these territories. In addition, the borrower’s income must be at or below the median.

The move builds on the Biden administration’s growing efforts to reduce lending racial gaps. Recent examples include new pilot Fannie Mae, underwriting based on rental histories, but Memorandum of understanding between FHFA and Department of Housing and Urban Development officials on ensuring fair credit.

“The goals for housing businesses for the next three years are to support equal access to sustainable affordable housing opportunities,” FHFA Acting Director Sandra Thompson said in a press release.

“This proposal will help ensure that the GSE is fulfilling its mission of serving all homeowners and tenants, including low-income homeowners in communities of color,” said Senator Sherrod Brown, DC, chairman of the Senate Banking and Housing Committee. and City Affairs, in a separate issue.

One mortgage industry trade group welcomed the move, but asked if the restrictions imposed by FHFA on the purchase of loans with specific characteristics under preferred share purchase agreements contradicted its objectives.

“CHLA welcomes FHFA’s announcement of ambitious housing targets. However, this action clearly heightens the need for the Treasury and FHFA to immediately suspend the January PSPA volume limits for the so-called high risk loansThe Association of Community Housing Lenders said in a statement.

In addition to creating a new sub-target for minority territories, the FHFA proposal will also add a benchmark for lending to low-income census areas and raise the bar for existing single and multi-family targets.

Unit-based benchmarks for multiple families will grow as follows: low-income 415,000 (up from 300,000); very low income – 88,000 (versus 60,000); and small buildings – 23,000 (versus 10,000). The benchmark for small buildings refers to properties with five to 50 apartments serving low-income tenants.



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