FHFA Proposes Rule on GSEs’ Duty to Serve Low Income Markets

The Federal Housing Finance Agency today proposed a rule that would require Fannie Mae and Freddie Mac to submit plans for improving the distribution and availability of safe and sound residential mortgage financing in underserved markets. Under the rule, the GSEs would be required to submit three-year draft plans detailing their planned activities and objectives for manufactured housing, affordable housing preservation and rural housing.

The rule would implement the Duty to Serve provisions outlined in the GSEs’ authorizing statutes, establishing a method for annual evaluation of the GSEs and awarding Duty to Serve credit based on activities detailed in the reports.

The proposed rule also invites public comment on whether the final rule should authorize Duty to Serve credit for the purchase of “chattel” loans — that is, loans made for the purchase or refinance of mobile homes.