GSEs Release ‘Duty to Serve’ Plans

The Federal Housing Finance Agency today outlined how Fannie Mae and Freddie Mac will work to improve the distribution and availability of safe and sound residential mortgage financing in underserved markets. Under a 2016 final rule implementing the new “duty to serve” requirements, Fannie Mae and Freddie Mac must submit three-year draft plans detailing their planned activities and objectives for serving three underserved markets: manufactured housing, affordable housing preservation and rural housing. The plans are effective Jan. 1.

As part of the plans, both Fannie and Freddie will re-enter the market for low income housing tax credits, which ABA has opposed in previous comments to the FHFA. FHFA last month announced that the GSEs will be allowed limited re-entry as equity investors into the market, and will be subject to an annual investment limit of $500 million, with any investments beyond $300 million in a given year required to be in areas identified by FHFA as having difficulty attracting investors. For more information, contact ABA’s Joe Pigg.