[Federal Register Volume 85, Number 245 (Monday, December 21, 2020)]
[Rules and Regulations]
[Pages 82881-82896]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28083]


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FEDERAL HOUSING FINANCE AGENCY

12 CFR Part 1282

RIN 2590-AB04


2021 Enterprise Housing Goals

AGENCY: Federal Housing Finance Agency.

ACTION: Final rule.

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SUMMARY: The Federal Housing Finance Agency (FHFA) is issuing a final 
rule on the 2021 housing goals for Fannie Mae and Freddie Mac (the 
Enterprises). The Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (the Safety and Soundness Act) requires FHFA to 
establish annual housing goals for mortgages purchased by the 
Enterprises. The housing goals include separate categories for single-
family and multifamily mortgages on housing that is affordable to low-
income and very low-income families, among other categories. The final 
rule establishes benchmark levels for each of the housing goals for 
2021.

DATES: The final rule is effective on February 19, 2021.

FOR FURTHER INFORMATION CONTACT: Ted Wartell, Associate Director, 
Office of Housing & Community Investment, Division of Housing Mission 
and Goals, at (202) 649-3157, <a href="/cdn-cgi/l/email-protection#a7f3c2c389f0c6d5d3c2cbcbe7c1cfc1c689c0c8d1"><span class="__cf_email__" data-cfemail="89ddeceda7dee8fbfdece5e5c9efe1efe8a7eee6ff">[email protected]</span></a>; Padmasini Raman, 
Supervisory Policy Analyst, Office of Housing & Community Investment, 
Division of Housing Mission and Goals, at (202) 649-3633, 
<a href="/cdn-cgi/l/email-protection#98c8f9fcf5f9ebf1f6f1b6caf9f5f9f6d8fef0fef9b6fff7ee"><span class="__cf_email__" data-cfemail="3b6b5a5f565a4852555215695a565a557b5d535d5a155c544d">[email protected]</span></a>; or Kevin Sheehan, Associate General Counsel, 
Office of General Counsel, (202) 649-3086, <a href="/cdn-cgi/l/email-protection#7e351b081710502d161b1b161f103e1816181f50191108"><span class="__cf_email__" data-cfemail="97dcf2e1fef9b9c4fff2f2fff6f9d7f1fff1f6b9f0f8e1">[email protected]</span></a>. 
These are not toll-free numbers. The mailing address is: Federal 
Housing Finance Agency, 400 Seventh Street SW, Washington, DC 20219. 
The telephone number for the Telecommunications Device for the Deaf is 
(800) 877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    Uncertainty over public health and over the economic impacts of the 
COVID-19 pandemic has caused significant disruption in both the single-
family and multifamily housing markets since March 2020. Due to the 
severe nature of the COVID-19 pandemic and associated economic 
uncertainty, FHFA is establishing benchmark levels for the Enterprise 
single-family and multifamily housing goals for calendar year 2021 
only. FHFA expects to conduct a new round of notice and comment 
rulemaking in 2021 to establish benchmark levels for 2022 and beyond. 
FHFA expects that more data will become available on the economic 
impacts of the COVID-19 pandemic and that the additional data will 
allow FHFA to update the economic model that has been a significant 
factor in setting the single-family benchmark levels. As in past 
housing goals rulemakings, FHFA expects to publish a paper describing 
the economic model as part of the rulemaking process in 2021.

A. Statutory and Regulatory Background for the Existing Housing Goals

    The Safety and Soundness Act requires FHFA to establish several 
annual housing goals for both single-family and multifamily mortgages 
purchased by Fannie Mae and Freddie Mac.\1\ The annual housing goals 
are one measure of the extent to which the Enterprises are meeting 
their public purposes, which include ``an affirmative obligation to 
facilitate the financing of affordable housing for low- and moderate-
income families in a manner consistent with their overall public 
purposes, while maintaining a strong financial condition and a 
reasonable economic return.'' \2\
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    \1\ See 12 U.S.C. 4561(a).
    \2\ See 12 U.S.C. 4501(7).
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    FHFA has established annual housing goals for Enterprise purchases 
of single-family and multifamily mortgages consistent with the 
requirements of the Safety and Soundness Act. The structure of the 
housing goals and the rules for determining how mortgage purchases are 
counted or not counted are set forth in the housing goals

[[Page 82882]]

regulation.\3\ The current benchmark levels for the housing goals were 
established by a final rule covering 2018-2020.\4\ This final rule 
establishes benchmark levels for 2021 but does not make any other 
changes to the housing goals regulation.
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    \3\ See 12 CFR part 1282.
    \4\ See 83 FR 5878 (Feb. 12, 2018).
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    Single-family goals. The single-family goals defined under the 
Safety and Soundness Act include separate categories for home purchase 
mortgages for low-income families, very low-income families, and 
families that reside in low-income areas.\5\ FHFA has also established 
a subgoal within the low-income areas goal that is limited to families 
in low-income census tracts and moderate-income families in minority 
census tracts. Performance on the single-family home purchase goals is 
measured as the percentage of the total home purchase mortgages 
purchased by an Enterprise each year that qualify for each goal or 
subgoal. There is also a separate goal for refinancing mortgages for 
low-income families, and performance on the refinancing goal is 
determined in a similar way.
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    \5\ The low-income areas housing goal includes: (1) Families in 
``low-income census tracts,'' defined as census tracts with median 
income less than or equal to 80 percent of area median income; (2) 
families with incomes less than or equal to area median income who 
reside in minority census tracts (defined as census tracts with a 
minority population of at least 30 percent and a tract median income 
of less than 100 percent of area median income); and (3) families 
with incomes less than or equal to 100 percent of area median income 
who reside in designated disaster areas.
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    Under the Safety and Soundness Act, the single-family housing goals 
are limited to mortgages on owner-occupied housing with one to four 
units total. The single-family goals cover conventional, conforming 
mortgages, defined as mortgages that are not insured or guaranteed by 
the Federal Housing Administration or another government agency and 
with principal balances that do not exceed the conforming loan limits 
for Enterprise mortgages.
    Two-part performance evaluation approach. The performance of the 
Enterprises on the single-family housing goals is evaluated using a 
two-part approach, comparing the goal-qualifying share of each 
Enterprise's mortgage purchases to two separate measures: A benchmark 
level and a market level. In order to meet a single-family housing 
goal, the percentage of mortgage purchases by an Enterprise that meet 
each goal must equal or exceed either the benchmark level or the market 
level for that year. The benchmark level is set prospectively by 
rulemaking based on various factors set forth in the Safety and 
Soundness Act.\6\ The market level is determined retrospectively for 
each year, based on the actual goal-qualifying share of the overall 
market as measured by the Home Mortgage Disclosure Act (HMDA) data for 
that year. The overall market that FHFA uses for setting the 
prospective benchmark level and for determining the retrospective 
market level consists of all single-family owner-occupied conventional 
conforming mortgages that would be eligible for purchase by either 
Enterprise. It includes loans purchased by the Enterprises, as well as 
comparable loans held in a lender's portfolio. It also includes any 
loans that are part of a private label security (PLS), although very 
few such securities have been issued for conventional conforming 
mortgages since 2008.
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    \6\ See 12 U.S.C. 4562(e).
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    While both the benchmark level and the retrospective market level 
are designed to measure the current year's mortgage originations, the 
performance of the Enterprises on the housing goals includes all 
Enterprise purchases in that year, regardless of the year in which the 
loan was originated. This includes providing for housing goals credit 
when the Enterprises acquire qualified seasoned loans.\7\
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    \7\ Seasoned mortgage means a mortgage on which the date of the 
mortgage note is more than one year before the Enterprise purchased 
the mortgage. See 12 CFR 1282.1(b).
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    Multifamily goals. The multifamily goals defined under the Safety 
and Soundness Act include categories for mortgages on multifamily 
properties (properties with five or more units) with rental units 
affordable to low-income families and mortgages on multifamily 
properties with rental units affordable to very low-income families. 
FHFA has also established a small multifamily low-income subgoal for 
properties with 5-50 units. The multifamily housing goals include all 
Enterprise multifamily mortgage purchases, regardless of the purpose of 
the loan. The multifamily goals evaluate the performance of the 
Enterprises based on numeric targets, not percentages, for the number 
of affordable units in properties backed by mortgages purchased by an 
Enterprise. FHFA has not established a retrospective market level 
measure for the multifamily goals, due in part to a lack of 
comprehensive data about the multifamily market. As a result, FHFA 
currently measures Enterprise multifamily goals performance against the 
benchmark levels only.
    The Safety and Soundness Act requires that affordability for rental 
units under the multifamily goals be determined based on rents that 
``[do] not exceed 30 percent of the maximum income level of such income 
category, with appropriate adjustments for unit size as measured by the 
number of bedrooms.'' \8\ The housing goals regulation considers the 
net rent paid by the renter and, therefore, nets out any subsidy 
payments that the renter may receive, including housing assistance 
payments.
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    \8\ See 12 U.S.C. 4563(c). This affordability definition is 
sometimes referred to as the ``Brooke Amendment,'' which states that 
to be affordable at the 80 percent of area median income level, the 
rents must not exceed 30 percent of the renter's income which must 
not exceed 80 percent of the area median income. See https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_092214.html 
for a description of the Brooke Amendment and background on the 
notion of affordability embedded in the housing goals.
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B. Adjusting the Housing Goals

    If, after publication of a final rule establishing the housing 
goals for 2021, FHFA determines that any of the single-family or 
multifamily housing goals should be adjusted in light of market 
conditions, to ensure the safety and soundness of the Enterprises, or 
for any other reason, FHFA will take any steps that are necessary and 
appropriate to adjust that goal consistent with the statute and 
regulation. FHFA recognizes that 2021 may be a year of disrupted 
economic activity. While FHFA is taking this uncertainty into 
consideration in setting the benchmark levels for 2021, FHFA may take 
other actions consistent with the Safety and Soundness Act and the 
Enterprise housing goals regulation based on new information or 
developments that occur after publication of this final rule.
    For example, under the Safety and Soundness Act and the Enterprise 
housing goals regulation, FHFA may reduce the benchmark levels in 
response to an Enterprise petition for reduction for any of the single-
family or multifamily housing goals in a particular year based on a 
determination by FHFA that: (1) Market and economic conditions or the 
financial condition of the Enterprise require a reduction; or (2) 
efforts to meet the goal or subgoal would result in the constraint of 
liquidity, over-investment in certain market segments, or other 
consequences contrary to the intent of the Safety and Soundness Act or 
the purposes of the Enterprises' charter acts.\9\
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    \9\ 12 CFR 1282.14(d).
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    The Safety and Soundness Act and the Enterprise housing goals 
regulation also take into account the possibility that achievement of a 
particular housing goal may not have been feasible for an Enterprise. 
If FHFA determines that a

[[Page 82883]]

housing goal was not feasible for an Enterprise to achieve, then the 
statute and regulation provide for no further enforcement of that 
housing goal for that year.\10\
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    \10\ 12 CFR 1282.21(a); 12 U.S.C. 4566(b).
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    If FHFA determines that an Enterprise failed to meet a housing goal 
and that achievement of the housing goal was feasible, then the statute 
and regulation provide FHFA with discretion in determining whether to 
require the Enterprise to submit a housing plan describing the specific 
actions the Enterprise will take to improve its performance.

C. Housing Goals Under Conservatorship

    On September 6, 2008, FHFA placed each Enterprise into 
conservatorship. Although the Enterprises remain in conservatorships at 
this time, they continue to have the mission of supporting a stable and 
liquid national market for residential mortgage financing. FHFA has 
continued to establish annual housing goals for the Enterprises and to 
assess their performance under the housing goals each year during the 
conservatorships.

II. Proposed Rule and Comments

    FHFA published a proposed rule in the Federal Register on August 
13, 2020 that proposed benchmark levels for each of the single-family 
and multifamily housing goals for 2021.\11\ The comment period ended on 
October 13, 2020.
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    \11\ See 85 FR 49312 (Aug. 13, 2020).
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    FHFA received 15 comment letters on the proposed rule, including 
four letters \12\ from policy advocacy organizations, six letters from 
trade associations representing lenders, home builders, credit unions, 
and other housing market participants, three letters from individuals, 
one letter from Fannie Mae, and one letter from Freddie Mac. FHFA has 
reviewed and considered all of the comments. Specific provisions of the 
proposed rule, and the comments received on those provisions, are 
discussed in the relevant sections of this final rule. Some topics 
raised were applicable to both the single-family and multifamily goals 
and are discussed briefly below. Some comment letters raised issues 
that are beyond the limited scope of this rulemaking, which is focused 
solely on establishing new benchmark levels for 2021. FHFA recognizes 
that the issues raised in the comment letters are important, and FHFA 
has provided more information and explanation in this final rule 
whenever it is possible to do so. FHFA is committed to addressing these 
issues more thoroughly in the proposed rule that is planned for next 
year on establishing housing goals for 2022 and beyond, which may 
include proposed changes to the Enterprise housing goals that go beyond 
setting new benchmark levels.
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    \12\ Two of the comment letters were joint letters representing 
thirteen advocacy organizations.
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    Research and data. Three comment letters from policy advocacy 
organizations urged FHFA to conduct additional analysis on the goal-
affected markets and to make more data available to the public, 
including data on Enterprise mortgage acquisitions and activities for 
low-income and minority borrowers, with real-time data throughout 2021. 
Through oversight of the regulated entities, FHFA collects and analyzes 
a significant amount of data on trends in the housing and mortgage 
markets, enabling FHFA to respond appropriately to market developments 
and disseminate information to improve the public's understanding of 
housing finance markets. FHFA's existing data collection, research, and 
analysis capabilities for the housing goals are supported by the new 
Division of Research and Statistics (DRS) within FHFA. DRS provides 
economic and market research, data development, and statistical 
analysis to support FHFA's oversight, supervision, rulemaking, and 
policy development. The division examines trends and risks in housing 
and housing finance markets, advances modeling capabilities, develops 
and maintains data, evaluates policy impacts, and engages with research 
communities outside of FHFA. FHFA reviews and monitors proprietary data 
from the Enterprises throughout the year, but much of this type of data 
cannot be shared publicly until the following year, in order to avoid 
influencing the market or giving a competitive advantage or 
disadvantage to an Enterprise. However, FHFA produces and releases 
numerous reports every year, detailing FHFA's activities as regulator 
and conservator of Fannie Mae and Freddie Mac. For example, the Annual 
Housing Report, released each October, includes data on loans made to 
low-income and minority borrowers in the previous year.\13\ It is 
valuable to understand what types of information the public finds 
useful, and FHFA will continue to reflect on what data the agency can 
share publicly and when.
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    \13\ See https://www.fhfa.gov/AboutUs/Reports/Pages/Annual-Housing-Report-2020.aspx.
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    Forbearance. In the proposed rule, FHFA requested comments on 
whether there were any kinds of activities, including forbearance, that 
should receive housing goals credit. Numerous comment letters 
encouraged FHFA and the Enterprises to take actions to mitigate 
foreclosures and support affordable loan modifications for homeowners 
who have been impacted by the pandemic and recession. The letters 
requested additional guidance to servicers to help inform borrowers of 
forbearance options and ensure that borrowers can access relief. 
However, with only one exception, the letters clearly stated that FHFA 
should not consider these efforts when evaluating whether the 
Enterprises met the housing goals. FHFA will continue to work closely 
with the Enterprises to provide assistance to those adversely affected 
by the COVID-19 pandemic. FHFA is continually reviewing forbearance 
policies and will institute changes as appropriate. Updated policies 
and guidance can be found on the FHFA website.\14\ When determining 
whether the Enterprises met the housing goals in 2020, FHFA will 
continue to evaluate the Enterprises quantitatively.
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    \14\ See https://www.fhfa.gov/Homeownersbuyer/MortgageAssistance/Pages/Coronavirus-Assistance-Information.aspx.
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    Finally, some comment letters raised issues beyond the scope of 
this housing goals rule, and those comments will not be addressed in 
this final rule. For example, some comment letters referenced the 
potential impact of the tight underwriting conditions during the 
pandemic as well as the potential impact of the Enterprise Regulatory 
Capital Framework re-proposed rule. FHFA announced its final rule on 
the Enterprise Regulatory Capital Framework on November 18, 2020.\15\ 
Appropriately capitalizing each Enterprise is critical to ensuring that 
the secondary mortgage market supports access to affordable mortgage 
credit for low- and moderate-income borrowers and minority borrowers 
during periods of financial stress, when these borrowers are 
potentially most vulnerable to loss of access to affordable mortgage 
credit. FHFA is carefully monitoring the impact of pandemic-related 
market and underwriting changes on the availability of affordable 
homeownership for low-income households. FHFA will consider these 
impacts as it develops its proposed housing goals rule for 2022 and 
beyond.
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    \15\ See https://www.fhfa.gov/SupervisionRegulation/Rules/Pages/Enterprise-Regulatory-Capital-Framework-Final-Rule.aspx.

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III. Summary of Final Rule

A. Benchmark Levels for the Single-Family Housing Goals for 2021

    The final rule establishes the benchmark levels for the single-
family housing goals and subgoal for 2021 as follows:

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                                                                     Current benchmark      Benchmark level for
                Goal                           Criteria             level for 2018-2020            2021
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Low-Income Home Purchase Goal......  Home purchase mortgages on   24 percent............  24 percent.
                                      single-family, owner-
                                      occupied properties with
                                      borrowers with incomes no
                                      greater than 80 percent of
                                      area median income.
Very Low-Income Home Purchase Goal.  Home purchase mortgages on   6 percent.............  6 percent.
                                      single-family, owner-
                                      occupied properties with
                                      borrowers with incomes no
                                      greater than 50 percent of
                                      area median income.
Low-Income Areas Home Purchase       Home purchase mortgages on   14 percent............  14 percent.
 Subgoal.                             single-family, owner-
                                      occupied properties with:.
                                     <bullet> Borrowers in
                                      census tracts with tract
                                      median income of no
                                      greater than 80 percent of
                                      area median income; or.
                                     <bullet> Borrowers with
                                      income no greater than 100
                                      percent of area median
                                      income in census tracts
                                      where (i) tract income is
                                      less than 100 percent of
                                      area median income, and
                                      (ii) minorities comprise
                                      at least 30 percent of the
                                      tract population.
                                     ...........................
Low-Income Refinancing Goal........  Refinancing mortgages on     21 percent............  21 percent.
                                      single-family, owner-
                                      occupied properties with
                                      borrowers with incomes no
                                      greater than 80 percent of
                                      area median income.
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    The single-family housing goals also include a Low-Income Areas 
Home Purchase Goal that the regulation defines as the benchmark level 
for the Low-Income Areas Home Purchase Subgoal plus an additional 
``disaster areas'' increment that FHFA determines each year based on 
Federal Emergency Management Agency declarations of disasters. The 
final rule does not make any change to the criteria or process for 
setting the additional disaster areas increment for 2021.

B. Benchmark Levels for the Multifamily Housing Goals for 2021

    The final rule establishes the benchmark levels for the multifamily 
goal and subgoals for 2021 as follows:

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[GRAPHIC] [TIFF OMITTED] TR21DE20.041

IV. Single-Family Housing Goals

    The final rule establishes the benchmark levels for the single-
family housing goals for 2021. FHFA considered the required statutory 
factors described below in setting the benchmark levels for the single-
family housing goals.
    The Safety and Soundness Act requires FHFA to consider the 
following seven factors in setting the single-family housing goals:
    1. National housing needs;
    2. Economic, housing, and demographic conditions, including 
expected market developments;
    3. The performance and effort of the Enterprises toward achieving 
the housing goals in previous years;
    4. The ability of the Enterprises to lead the industry in making 
mortgage credit available;
    5. Such other reliable mortgage data as may be available;
    6. The size of the purchase money conventional mortgage market, or 
refinance conventional mortgage market, as applicable, serving each of 
the types of families described, relative to the size of the overall 
purchase money mortgage market or the overall refinance mortgage 
market, respectively; and
    7. The need to maintain the sound financial condition of the 
Enterprises.\16\
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    \16\ 12 U.S.C. 4562(e)(2)(B).
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    FHFA has considered each of these seven statutory factors in 
setting the benchmark levels for each of the single-family housing 
goals and subgoal.
    In setting the benchmark levels for the single-family housing goals 
and subgoal, FHFA typically relies on statistical market models as one 
important consideration in evaluating these statutory factors. The 
statistical market models generate a point forecast for each goal as 
well as a confidence interval for the point forecast. FHFA then 
considers other statutory factors, as well as other relevant policy 
issues, to select a specific point forecast within the confidence 
interval as the benchmark level. However, due to the severe nature of 
the COVID-19 pandemic and the associated uncertainty going forward, 
FHFA has determined that the data used to create the statistical market 
models is not sufficient to reflect economic conditions for 2021.

Current Economic Conditions

    Uncertainty over public health and the economic impacts of the 
COVID-19 pandemic have dealt a severe blow to the U.S. economy. The 
sudden drop in economic activity in March 2020 created widespread 
disruptions and resulted in an unprecedented level of job losses. The 
unemployment rate jumped from 3.5 percent in February to 14.7 percent 
in April.\17\ Inflation-adjusted consumer expenditures, which account 
for about two-thirds of gross domestic product (GDP), declined 7.3 
percent in March. On June 8, the Business Cycle Dating Committee of the 
National Bureau of Economic Research officially declared that the U.S. 
economy fell into a recession in

[[Page 82886]]

February, ending one of the longest economic expansions in history.\18\
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    \17\ The Bureau of Labor Statistics (BLS), which publishes the 
unemployment rate and other labor statistics each month, noted that 
the April unemployment rate probably understated the share of 
unemployed workers in the labor force because many workers who 
should have been classified as ``unemployed on temporary layoff'' 
were most likely misclassified as ``employed absent from work'' in 
the Current Population Survey. A BLS analysis of the underlying data 
suggests that, had that misclassification not occurred, the April 
unemployment rate would have been nearly 5 percentage points higher. 
See Bureau of Labor Statistics, ``Frequently Asked Questions: The 
Impact of the Coronavirus (COVID-19) Pandemic on the Employment 
Situation for April 2020'' (May 8, 2020), https://go.usa.gov/xvM73.
    \18\ See https://www.nber.org/cycles/june2020.html.
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    The depth and duration of this recession and the path to economic 
recovery remain uncertain. However, the unemployment rate steadily 
declined from its April peak to 7.9 percent in September 2020 as 
economic activity slowly resumed.\19\ Real GDP growth further declined 
from an annual rate of negative 5.0 percent in the first quarter of the 
year to negative 31.4 percent in the second quarter, before rising at 
an annual rate of 33.1 percent in the third quarter.\20\
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    \19\ See https://www.bls.gov/news.release/empsit.nr0.htm, 
accessed on 10/5/2020.
    \20\ See https://www.bea.gov/news/2020/gross-domestic-product-third-quarter-2020-advance-estimate, accessed on 11/4/2020.
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    According to the most recent estimate published by the 
Congressional Budget Office (CBO),\21\ the COVID-19 pandemic and 
associated social distancing triggered a sharp contraction in output in 
the second quarter of 2020, but the CBO projected that real GDP would 
grow rapidly in the second half of 2020 and the first half of 2021. 
Strong GDP growth is projected to continue thereafter but at a slower 
pace.
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    \21\ Congressional Budget Office, ``An Update to the Economic 
Outlook: 2020-2030,'' published on July 2, 2020, accessed on 7/8/
2020 at https://www.cbo.gov/publication/56442.
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    This is in line with the economic projections at the Federal Open 
Market Committee (FOMC) meeting in September 2020. The real GDP growth 
for 2020 was projected to be negative 3.7 percent, an improvement from 
negative 6.5 percent at the June meeting.\22\ Real GDP growth was 
projected to be 4.0 percent in 2021 as the economy recovers, and then 
2.5-3.0 percent in the following two years. Other variables such as the 
projected unemployment rate also improved, declining from 9.3 percent 
in the June projection to 7.6 percent in the September projection.
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    \22\ See https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20200916.pdf, accessed on 10/5/2020.
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    The implications for the primary and secondary mortgage markets 
continue to unfold as policymakers consider further responses to the 
economic disruption caused by the COVID-19 pandemic. Congress passed 
the Coronavirus Aid, Relief, and Economic Security (CARES) Act to 
address some of the most pressing impacts of the economic disruption, 
including extending unemployment benefits through July. The 
availability of credit has contracted in the mortgage market due to a 
variety of factors, including additional down payment and loan-to-value 
restrictions and generally tightened underwriting requirements. 
Nevertheless, mortgage origination activity for home purchases has 
remained robust after its sharp decline in May 2020 as borrowers have 
sought to take advantage of the historic low interest rates for 
mortgages. Forecasts released by the Mortgage Bankers Association (MBA) 
in October indicate that overall home purchases and refinance mortgage 
originations could total $3.18 trillion in 2020, the most since 2003 
($3.81 trillion).\23\
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    \23\ See https://www.mba.org/2020-press-releases/october/mba-forecast-purchase-originations-to-increase-85-to-record-154-trillion-in-2021.
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    FHFA will continue to monitor how these circumstances impact 
various segments of the market, including those targeted by the housing 
goals. For instance, the pandemic and the resulting economic disruption 
resulted in tightening of credit, job losses, and uncertainty, which 
may have left some low-income households unable to refinance. However, 
the size of the impact on the low-income share of households among all 
home purchase and refinance mortgages continues to be hard to 
ascertain.

National Housing Trends

    At the start of 2020, the American housing market was in a strong 
position overall. After falling for 12 consecutive years, the U.S. 
homeownership rate reached 65.1 percent in 2019, with first-time 
homebuyers becoming an increasingly larger share of the homebuying 
market, helping to drive its overall expansion.\24\ Affordability 
challenges for low-income households remained, however. While interest 
rates have remained low since the Great Recession, home prices have 
climbed steadily, with real prices more than 5.0 percent above their 
2006 peak by the middle of 2020, according to the quarterly, seasonally 
adjusted, purchase-only FHFA House Price Index[supreg]. The median home 
price to median household income ratio, which is often used to measure 
affordability, declined nationally from a high of 4.7 in 2005 to a low 
of 3.3 in 2011, then steadily rose to 4.2 in 2018.\25\ As of the second 
quarter of 2020, the ratio was estimated to be 4.0, based on data from 
Moody's. FHFA will continue to monitor this metric throughout 2020.
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    \24\ U.S. Census Bureau, ``Quarterly Residential Vacancies and 
Homeownership,'' Fourth Quarter 2019, Release Number: CB20-05, 
available at https://www.census.gov/housing/hvs/files/qtr419/Q419press.pdf.
    \25\ Joint Center for Housing Studies of Harvard University, 
``The State of the Nation's Housing 2020,'' available at https://www.jchs.harvard.edu/state-nations-housing-2020.
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Recent Market Developments

    In response to the COVID-19 pandemic, financial markets and 
economic activity endured a severe dislocation in March, and housing 
markets were no exception. Initially, the combination of social 
distancing measures and heightened economic concerns caused home sales 
to drop significantly and homebuilders to pull back on new housing 
starts. Single-family housing starts declined sharply in March (down 
14.9 percent) and April (down 22.8 percent), but have been growing 
since May, indicating a partial recovery. Starts in September 
represented an 8.5 percent increase compared to August.\26\ Further, 
the seasonally adjusted annual rate of housing starts in September 2020 
was higher than September 2019.
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    \26\ U.S. Census Bureau, ``Monthly New Residential 
Construction,'' October 2020, Release Number: CB20-155, available at 
https://www.census.gov/construction/nrc/pdf/newresconst.pdf.
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    The full impact of the COVID-19 pandemic and ensuing uneven 
recovery on the low-income home purchase market is still unfolding. 
While uncertainty about the extent and continuation of the recovery 
remains as the pandemic endures, the summer months represented a 
strong, but likely uneven rebound. Policy measures such as the CARES 
Act have helped mitigate the disruption. Additionally, the Federal 
Reserve's actions to keep interest rates low have buoyed the housing 
market, and borrowers have sought to purchase and refinance their homes 
to take advantage of the low interest rate environment. However, it is 
not clear whether this represents an actual increase in mortgage 
originations and refinances, or a bringing forward of the pipeline as 
would-be borrowers make intended transactions sooner rather than later. 
Some comment letters noted the uneven impact of the pandemic on low-
income and low-wealth households. It is likely that the full extent of 
the COVID-19 pandemic's impact on housing markets will not be known 
until well after the virus is contained. The Enterprises are showing 
strong housing goals performance in 2020, although performance has 
varied at times throughout the year. The uneven impact of the pandemic 
and recovery will be considered by FHFA while evaluating the 
feasibility of the goals as part of the Enterprise housing goals 
performance determination process for 2020.
    Thus, while Enterprise performance on the housing goals has tended 
to exceed the benchmark levels set by FHFA in recent years, the 
economic

[[Page 82887]]

disruption and uncertainty seen in 2020 support keeping the levels for 
2021 unchanged from 2018-2020.

Past Performance of the Enterprises

    Table 1 provides the annual performance of both Enterprises on the 
single-family housing goals between 2010 and 2019. The performance of 
the Enterprises in 2019 is the most recent complete year of data and 
shows that both Enterprises exceeded the benchmark levels set by FHFA 
for each of the single-family housing goals, continuing the recent 
trend of Enterprise performance above the benchmark levels for the 
single-family housing goals for 2018-2020. While FHFA has monitored 
Enterprise performance in 2020 on a continual basis, that information 
is considered non-public until the calendar year is complete.
[GRAPHIC] [TIFF OMITTED] TR21DE20.042


[[Page 82888]]


    Tables 2 through 5 provide additional detail on the recent 
performance of the Enterprises for each of the single-family goals and 
subgoal. The tables show the number as well as the share of goal-
qualifying loans that the Enterprises acquired from 2013-2019. In 2018 
and 2019, the Enterprises increased the number of goals-qualifying 
loans they acquired at the same time that their overall single-family 
mortgage purchase volume increased.
[GRAPHIC] [TIFF OMITTED] TR21DE20.043


[[Page 82889]]


[GRAPHIC] [TIFF OMITTED] TR21DE20.044

Comments on the Proposed Single-Family Housing Goals

    Single-family housing goals benchmarks. The majority of comment 
letters focused on the proposed single-family housing goals. Most 
commenters, including the Enterprises and trade associations, supported 
the proposal to maintain the 2020 levels of the benchmarks for 2021 due 
to the uncertainty caused by the pandemic. A number of policy advocacy 
organizations recommended higher benchmark levels for the low-income 
purchase goal, raising it from 24 percent to 27 percent. FHFA 
recognizes that Enterprise performance in recent years has generally 
exceeded the benchmark levels, but FHFA believes the goals should not 
be increased for 2021 in light of the market disruption and continued 
market uncertainty. FHFA will reevaluate the benchmark levels of all of 
the single-family housing goals in developing the proposed housing 
goals rule for 2022 and beyond.
    Two comment letters from policy advocacy organizations also 
recommended requiring the Enterprises to meet both the prospective 
benchmark level and the retrospective market level in order to meet a 
goal. FHFA considered this alternative in the 2015-2017 housing goals 
rulemaking and determined that requiring an Enterprise to meet either 
of the two measures continued to be the most appropriate method for 
evaluating performance on the single-family housing goals.\27\ As 
discussed in the 2015-2017 and 2018-2020 housing goals final rules, 
FHFA utilizes the two-part approach to balance the risks of its two 
component tests. The benchmark level enables the Enterprises to plan 
ahead to meet a goal, but it is based on forecasts driven by prior 
market conditions that may not necessarily reflect current or future 
market conditions. The retrospective market measure helps provide an 
important safety valve that reduces the risk of a housing goal 
potentially motivating unsafe or unsound practices in the event of 
unpredictable market conditions.
---------------------------------------------------------------------------

    \27\ See https://www.fhfa.gov/SupervisionRegulation/Rules/Pages/2015-2017-Enterprise-Housing-Goals-Final-Rule.aspx.
---------------------------------------------------------------------------

    FHFA market model. Three comment letters from policy advocacy 
organizations expressed interest in seeing the market model paper that 
is typically released with the housing goals proposed rule, which 
describes the FHFA forecast for the single-family housing goals. The 
economic model in the paper typically plays a significant role in how 
FHFA arrives at the single-family benchmark levels. FHFA did not 
develop a market model paper for the proposed rule this year because 
FHFA is not relying on the economic model as the rationale for setting 
the benchmark levels as the market disruption caused by the pandemic is 
ongoing and is not yet reflected in the data that is used in the model. 
During 2021, FHFA will develop a proposed housing goals rule for 2022 
and beyond, and plans to develop and release a market model paper with 
that proposed rule.
    Temporary adjustment factors. One comment letter from a policy 
advocacy organization recommended that FHFA consider allowing short-
term adjustment factors and bonus points to support or expand access 
where there are gaps in the market. FHFA is continually monitoring and 
adjusting its overall regulatory approach to addressing homeownership 
gaps and access to credit for underserved families, including gaps that 
may be developing in these markets as a result of the COVID-19 
pandemic. FHFA will consider additional options to address these gaps 
in developing the proposed rule on housing goals for 2022 and beyond.
    Low-Income Refinance Goal. One comment letter from a policy 
advocacy organization highlighted a concern that lower-income and 
lower-wealth homeowners are not benefitting from the refinance boom and 
the historically low interest rates to save money on their mortgage 
payments. The letter recommended that FHFA and the Enterprises ensure 
rate term refinances are accessible and affordable to lower-income 
families. FHFA is closely monitoring the refinance market overall and 
will continue to track Enterprise data on borrower income for the low-
income refinance goal.
    Low-Income Areas Subgoal. Three comment letters from policy 
advocacy organizations expressed interest in FHFA's ongoing analysis of 
the low-income areas subgoal. The letters voiced concerns about the 
potential for displacement of lower-income residents and requested that 
more data be made public, specifically around borrower income of goals-
qualifying loans. FHFA notes that annual loan-level data from the 
Enterprises and HMDA is available in the FHFA Annual Housing Report, 
which includes information about borrower income, among other 
characteristics. FHFA has continued to analyze the data from HMDA and 
the Enterprises related to this goal and is providing relevant data in 
tables 6 through 8 below.
    Under the housing goals regulation, the Enterprises can meet the 
low-income areas home purchase subgoal by acquiring home purchase 
mortgages that are either: (1) Originated for borrowers located in low-
income census tracts (defined as census tracts with median income less 
than or equal to 80 percent of area median income(AMI)); or (2) 
originated for borrowers with incomes less than or equal to AMI who 
reside in minority census tracts (defined as census tracts with a 
minority population of at least 30 percent and a tract median income of 
less than 100 percent of

[[Page 82890]]

AMI).\28\ There are no borrower income requirements for criterion (1). 
While Enterprise mortgage acquisitions could qualify under either or 
both criteria, the share of the Enterprises' mortgage acquisitions 
satisfying criterion (1) has been consistently higher than the share of 
Enterprise mortgage acquisitions satisfying criterion (2) in recent 
years. For example, among the Enterprises' mortgage acquisitions in 
2019, 15.0 percent of mortgages met only criterion (1), 10.2 percent 
met only criterion (2), and 6.4 percent met both criteria as can be 
seen in table 6 below. All of these shares have been increasing 
steadily since 2010.
---------------------------------------------------------------------------

    \28\ See 12 CFR 1281.1 and 1282.12(f). 
    [GRAPHIC] [TIFF OMITTED] TR21DE20.045
    
    FHFA's analysis of HMDA data in table 7 shows that both the low-
income areas and the high-minority areas have increasing shares of 
borrowers with incomes at or above 100 percent of AMI, although loans 
to borrowers with incomes over 100 percent of AMI do not qualify for 
the minority areas component of the goal. For instance, the share of 
loans made to borrowers with incomes greater than 100 percent of AMI 
and residing in these low-income census tracts increased from 38.8 
percent in 2010 to 44.2 percent in 2016, after dropping to 36.5 percent 
in 2012. This share has been relatively stable since then, with a 43.3 
percent share in 2019. Nonetheless, borrowers with higher incomes have 
made up an increasing share of the mortgage market in the low-income 
areas. A similar trend exists among borrowers residing in high minority 
census tracts, with the share of higher income borrowers increasing 
from 42.5 percent in 2010 to 50 percent in 2016. That share declined to 
47.8 percent in 2019 after hovering around 49 percent in 2018 and 2019.

[[Page 82891]]

[GRAPHIC] [TIFF OMITTED] TR21DE20.046

    Table 8 shows this trend among the Enterprises' mortgage 
acquisitions in these areas until 2016, but the share has been 
noticeably declining since then. For example, the share of loans made 
to borrowers with incomes greater than 100 percent of AMI and residing 
in these low-income census tracts increased from 40.7 percent in 2010 
to 42.8 percent in 2016. However, that share has steadily declined 
since then, dropping to a low of 37 percent in 2019. This trend is 
similar among borrowers residing in high minority census tracts, with 
the share of higher income borrowers increasing from 45.4 percent in 
2010 to 48.5 percent in 2016, after dropping to a low of 42.8 percent 
in 2012. This share has since declined to 42.8 percent in 2019.

[[Page 82892]]

[GRAPHIC] [TIFF OMITTED] TR21DE20.047

    FHFA will continue to monitor this data and seek further input on 
the impact of this subgoal in developing the proposed rule on housing 
goals for 2022 and beyond.

Benchmark Levels for the Single-Family Housing Goals for 2021

    The final rule sets the benchmark levels for each of the single-
family housing goals and the subgoal for 2021 at the same levels that 
applied for 2018-2020. Based on the factors described in detail above 
and in the proposed rule, and after consideration of the comments 
received in response to the proposed rule, FHFA believes that extending 
these benchmark levels to 2021 will provide achievable yet challenging 
targets for the Enterprises.

V. Multifamily Housing Goals

    This final rule also establishes the benchmark levels for the 
multifamily housing goals for 2021. FHFA considered the following six 
statutory factors as required by the Safety and Soundness Act in 
setting the benchmark levels for the multifamily housing goals:
    1. National multifamily mortgage credit needs and the ability of 
the Enterprises to provide additional liquidity and stability for the 
multifamily mortgage market;
    2. The performance and effort of the Enterprises in making mortgage 
credit available for multifamily housing in previous years;
    3. The size of the multifamily mortgage market for housing 
affordable to low-income and very low-income families, including the 
size of the multifamily markets for housing of a smaller or limited 
size;
    4. The ability of the Enterprises to lead the market in making 
multifamily mortgage credit available, especially for multifamily 
housing affordable to low-income and very low-income families;
    5. The availability of public subsidies; and
    6. The need to maintain the sound financial condition of the 
Enterprises.\29\ FHFA has considered each of these statutory factors in 
setting the benchmark levels for each of the multifamily housing goals.
---------------------------------------------------------------------------

    \29\ 12 U.S.C. 4563(a)(4).
---------------------------------------------------------------------------

    The multifamily housing goals are measured based on the total 
volume of affordable multifamily mortgage purchases rather than on a 
percentage of multifamily mortgage purchases. Another difference 
between the single-family and multifamily housing goals is that there 
are separate single-family housing goals for home purchase and 
refinancing mortgages, while the multifamily housing goals include all 
Enterprise multifamily mortgage purchases, regardless of the purpose of 
the loan.
    Performance on the multifamily housing goals is measured solely 
against a benchmark level, without any retrospective market measure. 
The absence of a retrospective market measure for the multifamily 
housing goals results, in part, from the lack of comprehensive data 
about the multifamily mortgage market. Unlike the single-family 
mortgage market, for which HMDA data provide a reasonably comprehensive 
dataset about single-family mortgage originations each year, the 
multifamily mortgage market (including the affordable multifamily 
mortgage market segment) has no comparable source of data.
    The lack of comprehensive data for the multifamily mortgage market 
is even more acute with respect to the segments of the market that are 
targeted to low-income families, defined as families with incomes at or 
below 80 percent of AMI, and very low-income families, defined as 
families with incomes at or below 50 percent of AMI. As required by the 
Safety and Soundness Act, FHFA determines affordability of multifamily 
units based on a unit's rent and utility expenses not exceeding 30 
percent of the area median income standard for low- and very low-income 
families.\30\
---------------------------------------------------------------------------

    \30\ 12 U.S.C. 4563(c).

---------------------------------------------------------------------------

[[Page 82893]]

Current Economic Conditions, National Housing Needs, and Recent Market 
Developments

    The pandemic has impacted the multifamily affordable housing market 
and renters across the country. In February 2020, the multifamily 
originations market appeared as strong as it had been in 2019. However, 
by November 2020, MBA released a forecast projecting a 21 percent 
decline in multifamily originations from $364 billion in 2019 to $288 
billion in 2020. MBA noted that ``through the first three quarters of 
2020, multifamily sales volume was 41 percent lower than a year 
earlier, with multifamily originations down just 17 percent. The strong 
level of refinance activity of multifamily mortgages, particularly into 
Fannie Mae, Freddie Mac and FHA loans, is lifting overall originations 
activity from where it might otherwise be, and is driving differences 
between property types and capital sources.'' \31\ MBA anticipated a 
partial recovery, with total multifamily mortgage originations 
projected to be $305 billion in 2021, higher than the projected volume 
for 2020 but still well below the 2019 level.
---------------------------------------------------------------------------

    \31\ See https://www.mba.org/2020-press-releases/november/mba-forecast-commercial/multifamily-lending-to-fall-34-percent-in-2020.
---------------------------------------------------------------------------

    The public subsidies made available since March, which have helped 
the affordable housing sector and low-income households to some degree, 
are temporary and some have expired. The CARES Act provided 
supplemental unemployment benefits to help people pay their rent, which 
expired on July 31. In September, the Center for Disease Control issued 
an eviction moratorium, which ends on December 31, 2020. This action 
will help many renters stay in their homes, but without additional 
support for owners of multifamily buildings, landlords may be in a 
difficult financial position. There are bills under consideration to 
provide or extend additional support, but there is considerable 
uncertainty over the nature of this support.
    FHFA has taken numerous actions to support the market and provide 
relief to renters since March 2020. For example, on March 23, FHFA 
provided forbearance to Enterprise-backed multifamily property owners 
on the condition that they suspend eviction of tenants struggling to 
pay rent due to the pandemic.\32\ On June 29, FHFA announced extended 
forbearance agreements for multifamily property owners with existing 
forbearance agreements for up to three months, for a total forbearance 
of up to six months.\33\ While mortgage payments are in forbearance, 
the landlord must suspend all evictions for renters unable to pay rent, 
along with enhanced protections for renters. On May 4, FHFA directed 
the Enterprises to publish online multifamily property lookup tools so 
that tenants can determine if the multifamily property in which they 
reside has an Enterprise-backed mortgage and falls under the CARES 
Act's 120-day eviction moratorium.\34\ On August 6, FHFA announced that 
multifamily property owners in new forbearance agreements must inform 
tenants in writing about tenant protections, and that the Enterprises 
are improving their online multifamily property loan look-up tools.\35\
---------------------------------------------------------------------------

    \32\ See https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Moves-to-Provide-Eviction-Suspension-Relief-for-Renters-in-Multifamily-Properties.aspx.
    \33\ See https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Provides-Tenant-Protections.aspx.
    \34\ See https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Tools-to-Help-Renters-Find-Out-if-They-are-Protected-from-Eviction.aspx.
    \35\ See https://www.fhfa.gov/Media/PublicAffairs/Pages/Multifamily-Property-Owners-in-Forbearance-Now-Required-to-Inform-Tenants-of-Eviction-Suspension-and-Tenant-Protections.aspx.
---------------------------------------------------------------------------

    While the multifamily market has generally performed well during 
the pandemic, the market is characterized by a number of trends that 
have continued for multiple years, including the continued market focus 
on the construction of high-end, luxury apartments and the steady 
decline in the number of low-cost rentals. Nationwide, there has been a 
loss of four million low-cost rental units (rents less than $800 per 
month) since 2011.\36\ There is a particularly acute shortfall of 
affordable units for extremely low-income renters (earning up to 30 
percent of AMI) that was acknowledged as a persistent problem even 
before the COVID-19 pandemic began. For instance, as a recent report 
from the Department of Housing and Urban Development notes, it is 
increasingly difficult for housing developers and landlords to provide 
decent rental housing at rates that are affordable to American working 
families and more vulnerable households.\37\ In 2017, only 59 
affordable units were available per 100 very low-income renter 
households, and only 40 affordable units were available per 100 
extremely low-income renter households.\38\
---------------------------------------------------------------------------

    \36\ Joint Center for Housing Studies of Harvard University, 
``The State of the Nation's Housing 2019,'' available at https://www.jchs.harvard.edu/sites/default/files/Harvard_JCHS_State_of_the_Nations_Housing_2019.pdf.
    \37\ U.S. Department of Housing and Urban Development, ``Worst 
Case Housing Needs: 2019 Report to Congress,'' June 19, 2020, 
accessed on 7/10/2020 at https://www.huduser.gov/PORTAL/sites/default/files/pdf/worst-case-housing-needs-2020.pdf.
    \38\ A unit is considered affordable if gross rent (rent and 
utilities) does not exceed 30 percent of renter income, for purposes 
of the HUD report.
---------------------------------------------------------------------------

    The full impact on the stock of low-cost rental units in the wake 
of the COVID-19 pandemic and broader economic downturn is not yet 
known. According to a survey in May 2020 of multifamily construction 
firms, 53 percent of firms experienced construction delays due to 
issues like permitting or construction moratoriums.\39\ In the short-
term, the pandemic might exacerbate the already-constrained supply as 
lower housing mobility rates limit the number of low-cost options for 
renters as current residents stay in place. A study using the 2018 
American Community Survey data showed demand for low-cost units was 
already high while availability was extremely low.\40\ Additional 
tightening at the low end of the market could pose significant 
affordability challenges to low- and middle-income renters.
---------------------------------------------------------------------------

    \39\ National Multifamily Housing Council, 2020 NMHC 
Construction Survey, available at https://www.nmhc.org/research-insight/2020-nmhc-construction-survey/2020-nmhc-construction-survey-round-3/.
    \40\ Joint Center for Housing Studies of Harvard University, 
``The Continuing Decline of Low-Cost Rentals,'' May 11, 2020, 
accessed on 6/30/2020 at https://www.jchs.harvard.edu/blog/the-continuing-decline-of-low-cost-rentals/.
---------------------------------------------------------------------------

    Further, renters living in single-family homes and smaller 
multifamily buildings, along with the owners of those properties, are 
more likely to be negatively affected by the pandemic economic 
downturn. According to one study, over half of renters with at-risk 
wages due to the pandemic live in single-family rental housing with 1-4 
units.\41\ The same study estimates that nearly 20 percent of renters 
in small multifamily properties (5 to 50 units) may have difficulty 
paying full rent if at-risk wages are lost, compared to 12 percent of 
renters living in larger multifamily properties. This could, in turn, 
make it difficult for the owners of those properties, who are more 
likely to be small, individual investors, to remain financially stable 
through the pandemic.\42\
---------------------------------------------------------------------------

    \41\ ``At-risk wages'' are wages associated with ``At Risk 
Jobs,'' which are defined as those in services, retail, recreation, 
transportation and travel, and oil extraction. Joint Center for 
Housing Studies of Harvard University, ``Pandemic Will Worsen 
Housing Affordability for Service, Retail, and Transportation 
Workers,'' March 30, 2020, accessed on 6/30/2020 at https://www.jchs.harvard.edu/blog/pandemic-will-worsen-housing-affordability-for-service-retail-and-transportation-workers/.
    \42\ Joint Center for Housing Studies of Harvard University, 
``COVID-19 Rent Shortfalls in Small Buildings,'' May 26, 2020, 
accessed on 6/30/2020 at https://www.jchs.harvard.edu/blog/covid-19-rent-shortfalls-in-small-buildings/.

---------------------------------------------------------------------------

[[Page 82894]]

Conservatorship Scorecard Caps

    Enterprise performance on the multifamily housing goals is heavily 
influenced by the caps on total multifamily business that FHFA has 
established as conservator of the Enterprises. The multifamily volume 
caps are intended to focus on FHFA's other conservatorship goal: 
Maintaining the presence of the Enterprises as a backstop for the 
multifamily finance market while not impeding the participation of 
private capital. The multifamily volume caps reflect the share of the 
multifamily origination market that FHFA has determined to be an 
appropriate market share for the Enterprises. The multifamily volume 
caps are intended to prevent the Enterprises from crowding out capital 
sources and restrain the rapid growth of the Enterprises' multifamily 
businesses that started in 2011.
    While the conservatorship scorecard caps, including the target 
level for mission-driven loans, play a significant role in determining 
the multifamily purchase volume and affordable share for the Enterprise 
multifamily businesses, the multifamily housing goals target specific 
segments as required by the Safety and Soundness Act. FHFA will 
continue to ensure that the conservatorship scorecard caps and target 
levels for mission-driven loans for 2021 are aligned with the 2021 
Enterprise housing goals.

Past Performance on the Multifamily Low-Income Housing Goal

    The multifamily low-income housing goal is based on the total 
number of rental units in multifamily properties financed by mortgages 
purchased by the Enterprises that are affordable to low-income 
families, defined as families with incomes less than or equal to 80 
percent of the area median income. Since 2016, each Enterprise has 
performed significantly above the benchmark level for the multifamily 
low-income housing goal each year.
[GRAPHIC] [TIFF OMITTED] TR21DE20.048

Past Performance on the Multifamily Very Low-Income Housing Subgoal

    The multifamily very low-income housing subgoal includes units 
affordable to very low-income families, defined as families with 
incomes no greater than 50 percent of AMI. Both Enterprises have 
surpassed the benchmark level for the multifamily very low-income 
housing subgoal by a significant margin in recent years.
[GRAPHIC] [TIFF OMITTED] TR21DE20.049

Past Performance on the Small Multifamily Low-Income Housing Subgoal

    The small multifamily low-income housing subgoal is based on the 
total number of units in small multifamily properties financed by 
mortgages purchased by the Enterprises that are affordable to low-
income families, defined as families with incomes less than or equal to 
80 percent of the AMI. A small multifamily property is defined as a 
property with 5 to 50 units. Both Enterprises have met the small 
multifamily low-income housing subgoal each year in recent years.

[[Page 82895]]

[GRAPHIC] [TIFF OMITTED] TR21DE20.050

Comments on Multifamily Housing Goals

    A number of comment letters expressed general support for 
maintaining the current levels of the multifamily housing goals. Three 
comment letters addressed multifamily issues in detail.
    One comment letter from a policy advocacy organization suggested 
that FHFA should raise the multifamily benchmarks in light of recent 
performance but did not specify new benchmark levels. Multifamily 
originations have been adversely affected by the pandemic with current 
market forecasts projecting a steep decline for 2020 and a partial 
recovery in 2021, supporting FHFA's decision to maintain the current 
benchmark levels for 2021.
    A second comment letter on multifamily issues from a trade 
association expressed concerns about the impact on the Enterprises of 
multifamily property owners struggling to stay viable when renters are 
unable to pay rent. FHFA's COVID-19 policies are designed to respond to 
and support both renters and property owners. FHFA is monitoring 
multifamily loan performance in light of these circumstances and will 
continue to take action or change policies as appropriate.
    Another letter from a trade association encouraged FHFA to allow 
USDA section 538 and section 515 loans to receive housing goals credit, 
in order to expand the secondary market for these rural programs. The 
current housing goals regulation permits FHFA to determine that 
multifamily mortgages under programs involving Federal guarantees or 
insurance should be counted if the financing needs addressed by the 
particular mortgage program are not well served.\43\ In light of this 
comment, FHFA will explore this issue and evaluate possible action 
under the current regulation.
---------------------------------------------------------------------------

    \43\ See 12 CFR 1282.16(b)(3).
---------------------------------------------------------------------------

Benchmark Levels for the Multifamily Housing Goals for 2021

    The final rule sets the benchmark levels for each of the 
multifamily housing goal and subgoals for 2021 at the same levels as 
2018-2020. As described above, FHFA considered the statutory factors 
including current economic conditions, national housing needs, recent 
market developments, the most recent conservatorship scorecard cap 
levels, and the past performance of the Enterprises in meeting each 
goal.
    The Enterprises are showing strong goals performance in 2020 
despite the COVID-19 disruption, and FHFA will continue to monitor 
their progress throughout the year. Taking the Enterprises' past 
performance and the projected partial recovery in 2021 into account, 
FHFA believes that maintaining the current benchmark levels will be 
sufficiently challenging for the Enterprises while also providing 
adequate support to the affordable housing market segment.

VI. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. 3501 et seq.) requires that 
regulations involving the collection of information receive clearance 
from the Office of Management and Budget (OMB). The final rule does not 
contain any information collection requirement that would require OMB 
approval under the Paperwork Reduction Act. Therefore, FHFA has not 
submitted the rule to OMB for review.

VII. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that 
a regulation that has a significant economic impact on a substantial 
number of small entities, small businesses, or small organizations must 
include an initial regulatory flexibility analysis describing the 
regulation's impact on small entities. Such an analysis need not be 
undertaken if the agency has certified that the regulation will not 
have a significant economic impact on a substantial number of small 
entities. 5 U.S.C. 605(b). FHFA has considered the impact of the final 
rule under the Regulatory Flexibility Act. The General Counsel of FHFA 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities because the regulation applies 
only to Fannie Mae and Freddie Mac, which are not small entities for 
purposes of the Regulatory Flexibility Act.

VIII. Congressional Review Act

    In accordance with the Congressional Review Act (5 U.S.C. 801 et 
seq.), FHFA has determined that this final rule is a major rule and has 
verified this determination with the Office of Information and 
Regulatory Affairs of OMB.

List of Subjects in 12 CFR Part 1282

    Mortgages, Reporting and recordkeeping requirements.

Authority and Issuance

    For the reasons stated in the preamble, under the authority of 12 
U.S.C. 4511, 4513, and 4526, FHFA amends part 1282 of Title 12 of the 
Code of Federal Regulations as follows:

PART 1282--ENTERPRISE HOUSING GOALS AND MISSION

0
1. The authority citation for part 1282 continues to read as follows:

    Authority: 12 U.S.C. 4501, 4502, 4511, 4513, 4526, 4561-4566.


0
2. Section 1282.12 is amended by revising paragraphs (c)(2), (d)(2), 
(f)(2), and (g)(2) to read as follows:


Sec.  1282.12   Single-family housing goals.

* * * * *
    (c) * * *
    (2) The benchmark level, which for 2021 shall be 24 percent of the 
total

[[Page 82896]]

number of purchase money mortgages purchased by that Enterprise in each 
year that finance owner-occupied single-family properties.
    (d) * * *
    (2) The benchmark level, which for 2021 shall be 6 percent of the 
total number of purchase money mortgages purchased by that Enterprise 
in each year that finance owner-occupied single-family properties.
* * * * *
    (f) * * *
    (2) The benchmark level, which for 2021 shall be 14 percent of the 
total number of purchase money mortgages purchased by that Enterprise 
in each year that finance owner-occupied single-family properties.
    (g) * * *
    (2) The benchmark level, which for 2021 shall be 21 percent of the 
total number of refinancing mortgages purchased by that Enterprise in 
each year that finance owner-occupied single-family properties.

0
3. Section 1282.13 is amended by revising paragraphs (b) through (d) to 
read as follows:


Sec.  1282.13  Multifamily special affordable housing goal and 
subgoals.

* * * * *
    (b) Multifamily low-income housing goal. The benchmark level for 
each Enterprise's purchases of mortgages on multifamily residential 
housing affordable to low-income families shall be at least 315,000 
dwelling units affordable to low-income families in multifamily 
residential housing financed by mortgages purchased by the Enterprise 
for 2021.
    (c) Multifamily very low-income housing subgoal. The benchmark 
level for each Enterprise's purchases of mortgages on multifamily 
residential housing affordable to very low-income families shall be at 
least 60,000 dwelling units affordable to very low-income families in 
multifamily residential housing financed by mortgages purchased by the 
Enterprise for 2021.
    (d) Small multifamily low-income housing subgoal. The benchmark 
level for each Enterprise's purchases of mortgages on small multifamily 
properties affordable to low-income families shall be at least 10,000 
dwelling units affordable to low-income families in small multifamily 
properties financed by mortgages purchased by the Enterprise for 2021.

Mark A. Calabria,
Director, Federal Housing Finance Agency.
[FR Doc. 2020-28083 Filed 12-18-20; 8:45 am]
BILLING CODE 8070-01-P


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