FHFA Finalizes Changes to FHLB Housing Goals

The Federal Housing Finance Agency today finalized several changes to the housing goals for the Federal Home Loan Banks. The changes affect all FHLBs that purchase mortgages through the Acquired Member Asset Program and will be phased in over a three-year period.

Under the existing framework, FHLBs whose AMA purchases exceed $2.5 billion in a given year are subject to the housing goals. Goals performance is evaluated by comparing the proportion of an FHLB’s purchases that were affordable with the proportion originated in its district reported as affordable in Home Mortgage Disclosure Act data.

The final rule eliminates the $2.5 billion volume threshold and the retrospective evaluation using HMDA data and instead sets a single prospective mortgage purchase housing goal as a share of each FHLB’s total AMA purchases. It also establishes a process through which FHLBs could propose alternative goals to the prospective goals set in the regulation and simplifies and expands the eligibility criteria to allow government-backed loans to count for goals purposes.