The Federal Housing Finance Agency today announced today Fannie Mae and Freddie Mac are issuing updates to their private mortgage insurer eligibility requirements, which are the financial and operational standards that private mortgage insurance companies must meet to provide insurance on mortgage loans acquired by the enterprises.
The enterprises have periodically reviewed the requirements since they were first issued in 2015. One change this year is that the updated standards differentiate between bonds based on credit quality and liquidity, according to FHFA. They also establish limits for assets backed by residential mortgages or commercial real estate to mitigate the effects if the assets lose value during periods of housing stress.
In related news, FHFA also issued a proposed rule to establish the housing goals for 2025-2027 that Fannie and Freddie must meet on an annual basis, including a new process for evaluating compliance with those goals.
Fannie’s and Freddie’s annual housing goals are used to measure whether each enterprise is meeting its public purpose. They were last updated in 2021 and include separate categories for single-family and multifamily mortgages on housing affordable to low-income and very low-income families, according to FHFA.
