FHFA Final Rule to Provide Increased Mortgage Financing for Underserved Borrowers
To help underserved borrowers, the Federal Housing Finance Agency (FHFA) sent to the Federal Register for publication a final rule on the Federal Home Loan Banks’ (FHLBanks) Housing Goals. The new goals take effect in 2021 and enforcement of the rule will be phased in over three years.
“By creating housing goal targets that are achievable for the Federal Home Loan Banks, the final rule helps ensure they make meaningful contributions to affordable homeownership,” said Director Mark Calabria. “This rule will expand responsible homeownership opportunities for underserved communities across the country.”
The final rule amends the FHLBanks’ housing goals to:
- Eliminate the retrospective evaluation using HMDA data and set a single prospective mortgage purchase housing goal as a share of each FHLBank’s total Acquired Member Asset (AMA) purchases;
- Set a new small member participation housing goal for participation by small institutions;
- Eliminate the volume threshold and instead allow FHLBanks to propose different levels for the goals for mortgage purchases and small member participation, subject to FHFA approval; and
- Simplify and clarify the eligibility criteria to enable federally backed loans sold by small institutions eligible to count for goals purposes.
By creating housing goal targets that are achievable for the FHLBanks, the final rule helps ensure the FHLBanks make meaningful contributions to affordable homeownership.