The Federal Housing Finance Agency today released a draft of its strategic plan for 2022-2026 for public comment. Comments are due March 11. The agency’s strategic goals include securing the regulated entities’ safety and soundness, fostering housing finance markets that promote equitable access to affordable and sustainable housing and responsibly stewarding FHFA’s infrastructure.
FHFA flagged several challenges that could influence its success in achieving its goals, including the unpredictable path of the COVID-19 pandemic, a changing interest rate environment, supply-side constraints affecting housing affordability and climate change. Disasters like hurricanes, wildfires, and floods could increase credit risk and credit related expenses at the regulated entities, FHFA said adding that “a scenario of multiple simultaneous disaster events could stress the regulated entities and their business counterparties who service mortgages and insure property.”
FHFA added that the regulatory environment could also affect its ability to achieve its strategic goals, noting that it does not have the power to examine important counterparties of its regulated entities such as nonbank servicers. The agency said this “could interfere with FHFA’s ability to ensure the safety and soundness of the regulated entities.”