FHFA Updates Guidelines for Adverse Classification of Assets at GSEs, FHLBs

The Federal Housing Finance Agency today updated its guidelines for adverse and non-adverse classification of assets at Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The guidelines describe sound practices for managing credit risk at the regulated entities. FHFA also outlined procedures for listing assets for special mention. The advisory bulletin issued by FHFA rescinds and replaces several previously issued bulletins on asset classifications.

The bulletin outlines how to make adverse classifications for single-family residential mortgage loans, multifamily residential mortgage loans, other real estate owned, other assets including off-balance sheet credit exposures, and FHLB advances.