81096 Federal Register / Vol. 75, No. 247 / Monday, December 27, 2010 / Rules and Regulations 

1See 12 U.S.C. 4562. For that reason, consistent 

with the proposed rule, the final rule provides that 

such loans are not eligible to be counted toward the 

Banks’ housing goals either. The AMA regulation 

also authorizes the Banks to purchase other real 

estate-related collateral, including: second liens and 

commercial real estate loans; small business, small 

farm and small agri-business loans; whole loans 

secured by manufactured housing regardless of 

whether the housing qualifies as residential real 

property; and state and local housing finance 

agency bonds, subject to prior new business activity 

approval by FHFA under 12 CFR part 980. See 12 

CFR 955.2(a). 

domestic livestock and wildlife and 

potential risks for spread of disease; and 

(iii) Describe mitigation activities to 

prevent the spread of B. abortus from 

domestic livestock and/or wildlife, as 

applicable, within or from the 

brucellosis management area. 

* * * * * 

Herd blood test. A blood test for 

brucellosis conducted in a herd on all 

cattle or bison 6 months of age or over, 

except steers and spayed heifers. 

* * * * * 

Done in Washington, DC, this 17th day of 

December 2010. 

Kevin Shea, 

Acting Administrator, Animal and Plant 

Health Inspection Service. 

[FR Doc. 2010–32371 Filed 12–22–10; 8:45 am] 

BILLING CODE 3410–34–P 

FEDERAL HOUSING FINANCE 

AGENCY 

12 CFR Part 1281 

RIN 2590–AA16 

Federal Home Loan Bank Housing 

Goals 

AGENCY: Federal Housing Finance 

Agency. 

ACTION: Final rule. 

SUMMARY: Section 1205 of the Housing 

and Economic Recovery Act of 2008 

(HERA) amended the Federal Home 

Loan Bank Act (Bank Act) by adding a 

new section 10C(a) that requires the 

Director of the Federal Housing Finance 

Agency (FHFA) to establish housing 

goals with respect to the Federal Home 

Loan Banks’ (Banks) purchase of 

mortgages, if any. Section 10C(b) 

provides that the Banks’ housing goals 

are to be consistent with the housing 

goals established by FHFA for the 

Federal National Mortgage Association 

(Fannie Mae) and the Federal Home 

Loan Mortgage Corporation (Freddie 

Mac) (collectively, the Enterprises) 

under sections 1331 through 1334 of the 

Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 

(Safety and Soundness Act), as amended 

by HERA, taking into consideration the 

unique mission and ownership structure 

of the Banks. 

To implement section 10C, FHFA is 

adopting a final rule that is substantially 

the same as the proposed rule published 

by FHFA for notice and comment. The 

final rule establishes three single-family 

owner-occupied purchase money 

mortgage goals and one single-family 

refinancing mortgage goal applicable to 

the Banks’ purchases of single-family 

owner-occupied mortgages, if any, 

under their Acquired Member Assets 

(AMA) programs, consistent with the 

single-family housing goals for the 

Enterprises. A Bank will be subject to 

the housing goals if its AMA-approved 

mortgage purchases in a given year 

exceed a volume threshold of $2.5 

billion. 

DATES: This rule is effective January 26, 

2011. 

FOR FURTHER INFORMATION CONTACT: 

Brian Doherty, Acting Senior Associate 

Director, (202) 408–2991, Charles E. 

McLean, Associate Director, (202) 408– 

2537, or Rafe R. Ellison, Senior Program 

Analyst, (202) 408–2968, Office of 

Housing and Community Investment, 

1625 Eye Street, NW., Washington, DC 

20006. (These are not toll-free numbers.) 

For legal matters, contact Kevin 

Sheehan, Attorney, (202) 414–8952, or 

Sharon Like, Managing Associate 

General Counsel, (202) 414–8950, Office 

of General Counsel, Federal Housing 

Finance Agency, Fourth Floor, 1700 G 

Street, NW., Washington, DC 20552. 

(These are not toll-free numbers.) The 

telephone number for the 

Telecommunications Device for the 

Hearing Impaired is (800) 877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Federal Home Loan Bank System 

The Federal Home Loan Bank System 

(System) was created by the Bank Act to 

support mortgage lending and related 

community investment. See 12 U.S.C. 

1421 et seq. The System is composed of 

12 Banks with more than 8,000 member 

financial institutions, and the System’s 

fiscal agent, the Office of Finance. The 

Banks fulfill their statutory mission 

primarily by providing secured loans 

(called advances) to their members. The 

Bank Act provides the Banks explicit 

authority to make secured advances. 12 

U.S.C. 1430(a). Advances provide 

members with a source of funding for 

mortgages and asset-liability 

management, liquidity for a member’s 

short-term needs, and additional funds 

for housing finance and community 

investment. Advances are collateralized 

primarily by residential mortgage loans 

and government and agency securities. 

12 U.S.C. 1430(a)(3). Community 

financial institutions (CFIs) (i.e., 

members with average total assets of 

less than $1 billion (as adjusted 

annually for inflation)) may also pledge 

small business, small agriculture or 

community development loans as 

collateral for advances. 12 U.S.C. 

1430(a)(3)(E). 

Consolidated obligations, consisting 

of bonds and discount notes, are the 

principal source for the Banks to fund 

advances and investments. The Office of 

Finance issues all consolidated 

obligations on behalf of the 12 Banks. 

Although each Bank is primarily liable 

for the portion of consolidated 

obligations corresponding to the 

proceeds received by that Bank, each 

Bank is also jointly and severally liable 

with the other eleven Banks for the 

payment of principal of, and interest on, 

all consolidated obligations. See 12 CFR 

966.9. 

B. Bank AMA Programs 

In July 2000, the Federal Housing 

Finance Board (FHFB) adopted a final 

regulation authorizing the Banks to 

establish Acquired Member Assets 

(AMA) programs. See 12 CFR part 955. 

A Bank may participate in an AMA 

program at its discretion; FHFA does 

not have the authority to compel a Bank 

to engage in any mortgage purchase 

activities. Each Bank must receive 

approval from FHFA pursuant to the 

requirements for new business activities 

in order to establish an AMA program. 

See 12 CFR part 980. A majority of the 

Banks have implemented AMA 

programs pursuant to the AMA approval 

authority. 

In order for a Bank to acquire a 

mortgage loan under an AMA program, 

the loan must meet the requirements set 

forth under a three-part test established 

by the regulation. The three-part test 

consists of: A loan type requirement; a 

member or housing associate nexus 

requirement; and a credit risk-sharing 

requirement. 12 CFR 955.2. The AMA 

regulation generally authorizes the 

Banks to purchase conforming whole 

loans on single-family residential real 

property not more than 90 days 

delinquent. In addition, the Banks are 

authorized to purchase conforming 

whole loans on single-family residential 

real property regardless of delinquency 

status if the loan is insured or 

guaranteed by the U.S. government, 

although such loans are not eligible to 

be counted toward the Enterprises’ 

housing goals, as provided in the Safety 

and Soundness Act.1 The Banks acquire 

AMA from their participating members 


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2See ‘‘Federal Home Loan Banks Second Quarter 

2010 Combined Financial Report, Combined 

Statement of Condition,’’ at 4. 

3See ‘‘Federal Home Loan Banks Combined 

Financial Report for 2008’’ at 78–80, and ‘‘Federal 

Home Loan Banks Combined Financial Report for 

2009’’ at 55–56. 

4 ‘‘Low-income’’ is defined as income not in 

excess of 80 percent of area median income. See 12 

U.S.C. 4502(14). 

5 ‘‘Families in low-income areas’’ is defined to 

include families living in census tracts where the 

median income does not exceed 80 percent of the 

area median income and families with incomes not 

in excess of the area median income that either live 

in a minority census tract or in a designated disaster 

area. See 12 U.S.C. 4502(28). 

6 ‘‘Very low-income’’ is defined as income not in 

excess of 50 percent of area median income. See 12 

U.S.C. 4502(24). 

through either a purchase or funding 

transaction. The Banks are not 

authorized under the AMA programs to 

securitize the mortgages they purchase. 

To date, FHFA has approved two 

AMA programs—the Mortgage 

Partnership Finance (MPF) program and 

the Mortgage Purchase Program (MPP)— 

that authorize the Banks to purchase 

only eligible single-family, fixed-rate 

mortgages, including manufactured 

housing loans, from participating 

financial institution (PFI) members. The 

Banks are not approved to purchase any 

other types of mortgages under the AMA 

programs, including mortgages secured 

by multifamily properties. In operation, 

the Banks have limited their AMA 

programs to purchasing conforming, 

conventional and government-insured 

or -guaranteed fixed-rate whole first 

mortgages on single-family residential 

property with maturities ranging from 5 

to 30 years. Banks have also purchased 

participations in AMA-approved loan 

pools after the original Bank acquired 

the loans. As of June 30, 2010, the 

combined value of the AMA mortgage 

loans in the 12 Banks’ portfolios was 

$67 billion, representing approximately 

seven percent of the Banks’ total 

combined assets. In contrast, the Banks’ 

outstanding advances, their primary 

business line, totaled $540 billion as of 

June 30, 2010, representing 58 percent 

of the Banks’ total combined assets.2

The MPF and MPP programs are 

designed such that the Banks manage 

the interest-rate risk and the PFI 

assumes a substantial portion of the 

risks associated with originating the 

mortgage, particularly the credit risk. 

The AMA regulation requires that PFIs 

provide credit enhancement to give the 

mortgages the Banks purchase the credit 

quality equivalent to an instrument 

rated at least investment grade (the 

fourth highest credit rating category or 

triple-B), although the approved AMA 

programs require PFIs to enhance the 

loans to the second highest investment 

grade (double-A). 12 CFR 955.3. The PFI 

may provide this credit enhancement 

through various means, such as 

establishing a risk account to cover 

losses in excess of a borrower’s equity 

and primary mortgage insurance on 

mortgages purchased by a Bank, 

accepting direct liability to pay credit 

losses up to a specified amount, or 

entering into a contractual obligation to 

provide supplemental mortgage 

guaranty insurance. 

As previously noted, advances remain 

the core business activity of the Banks 

and a principal means by which they 

fulfill their mission. Participation in an 

AMA program is elective. The 

acquisition of AMA has presented 

certain risk management challenges for 

some Banks. The AMA are long-term, 

fixed-rate loans, and the portfolio 

requires careful attention to interest rate 

risk management in order to match the 

duration of assets and liabilities and to 

adjust for loan prepayments. The Banks 

must also competitively price their 

product in the market without eroding 

their own financial interest. Given these 

challenges and in light of recent interest 

rate and earnings volatility, several 

Banks have scaled down their purchases 

of AMA and returned to their core 

products. After peaking in 2003, when 

the Banks purchased over $91.2 billion 

in AMA, annual AMA purchases have 

steadily declined to an annualized 

average of about $6.7 billion during the 

period between 2006 and 2009. Several 

Banks either have stopped accepting 

additional master commitments to 

purchase AMA from their members or 

no longer accept delivery. In 2007, 2008 

and 2009, the principal pay-down and 

maturities of AMA held for portfolio 

were greater than purchases and 

funding of new loans held for portfolio.3

C. Bank Housing Goals Statutory 

Provisions 

Section 10C(a) of the Bank Act, as 

amended by HERA, requires the 

Director of FHFA to ‘‘establish housing 

goals with respect to the purchase of 

mortgages, if any, by the [Banks],’’ 

which ‘‘shall be consistent with the 

goals established under sections 1331 

through 1334 of the [Safety and 

Soundness Act, as amended].’’ 12 U.S.C. 

1430c(a). Section 10C(b) provides that, 

in establishing the goals for the Banks, 

‘‘the Director shall consider the unique 

mission and ownership structure of the 

[Banks].’’ 12 U.S.C. 1430c(b). In 

addition, section 10C(c) provides that, 

‘‘to facilitate an orderly transition,’’ the 

Director shall establish interim target 

goals for the purchase of mortgages by 

the Banks for the calendar years 2009 

and 2010. 12 U.S.C. 1430c(c). Section 

10C(d) provides that the monitoring and 

enforcement requirements of section 

1336 of the Safety and Soundness Act 

shall apply to the Banks in the same 

manner and to the same extent as they 

apply to the Enterprises. 12 U.S.C. 

1430c(d). Section 10C(e) requires the 

Director to annually report to Congress 

on the performance of the Banks in 

meeting the housing goals under section 

10C. 12 U.S.C. 1430c(e). 

Sections 1331 through 1333 of the 

Safety and Soundness Act, as amended 

by HERA, require the Director of FHFA 

to establish new housing goals effective 

for 2010 and beyond for the Enterprises. 

The new Enterprise housing goals 

include four goals for conventional 

conforming single-family owneroccupied housing, one multifamily 

special affordable housing goal, and one 

multifamily special affordable housing 

subgoal. See 12 U.S.C. 4561, 4563(a)(2). 

The single-family housing goals target 

purchase money mortgages for lowincome families,4 families that reside in 

low-income areas,5 and very lowincome families,6 and refinancing 

mortgages for low-income families. See 

12 U.S.C. 4562. The multifamily special 

affordable housing goal targets 

multifamily housing affordable to lowincome families, and the multifamily 

special affordable housing subgoal 

targets multifamily housing affordable 

to very low-income families. See 12 

U.S.C. 4563. In a separate rulemaking, 

FHFA has published in the Federal 

Register a final rule for the new housing 

goals for the Enterprises for 2010 and 

2011 pursuant to the requirements of 

sections 1331 through 1333 of the Safety 

and Soundness Act, as amended. 75 FR 

55892 (Sept. 14, 2010). 

D. Banks’ and Enterprises’ Differences 

Section 1313 of the Safety and 

Soundness Act, as amended, 12 U.S.C. 

4513(f), requires the Director of FHFA to 

consider the differences between the 

Banks and the Enterprises whenever 

promulgating regulations that affect the 

Banks. In preparing the final rule, 

pursuant to section 1313, the Director 

considered the differences between the 

Banks and the Enterprises with respect 

to the Banks’ cooperative ownership 

structure, mission of providing liquidity 

to members, affordable housing and 

community development mission, 

capital structure, and joint and several 

liability, and determined that the final 

rule is appropriate. As described below, 

there are significant differences between 

the Enterprise housing goals and the 

Bank housing goals—including 


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establishing a volume threshold for the 

Banks to avoid adverse impact on Bank 

AMA programs, particularly with 

respect to CFIs that are PFIs—that 

recognize the significant differences 

between the Banks’ businesses and 

purposes and those of the Enterprises. 

Each Bank is a cooperative owned by 

financial institution members that act as 

both owners and customers of the 

cooperative. Members, as owners, are 

entitled to receive shares of the 

cooperative’s earnings and access to the 

cooperative’s products and services, 

including the AMA programs. A Bank is 

authorized to serve only members of its 

cooperative, and, as discussed above, its 

primary business is providing advances 

to its members. 

Fannie Mae and Freddie Mac have 

been owned by investors through their 

holdings of preferred or common stock 

shares since 1968 and 1989, 

respectively. An Enterprise’s primary 

business is securitizing mortgages 

originated by financial institutions, and 

guaranteeing the timely payment of 

principal and interest on the mortgagebacked securities (MBS). The 

Enterprises also purchase mortgages for 

their mortgage portfolios. FHFA has 

instructed the Enterprises to 

significantly reduce the size of their 

mortgage portfolios over time. The 

Banks are restricted to purchasing loans 

from their members, most of which are 

regulated depositories. By contrast, the 

Enterprises have access to a broad, 

nationwide network of financial 

institutions from which they purchase 

mortgages. Also, unlike the Banks, for 

which participation in the AMA is an 

elective activity, the fundamental 

statutory purpose of the Enterprises is to 

bring stability in the secondary market 

for residential mortgages by purchasing 

and making commitments to purchase 

residential mortgages. See 12 U.S.C. 

1451 note; 12 U.S.C. 1716. 

The Banks’ and Enterprises’ different 

ownership structures and associated 

statutory restrictions in the Bank Act 

and the Federal National Mortgage 

Association Charter Act and the Federal 

Home Loan Mortgage Corporation Act 

(together, the Charter Acts), 

respectively, have a significant impact 

on their respective mortgage purchase 

activities. The Enterprises’ mortgage 

purchase activities are substantially 

greater than that of the Banks. In 

calendar year 2009, the Banks’ 

combined number of single-family 

mortgage purchases was slightly over 

48,000, while Fannie Mae purchased 

approximately 3.51 million singlefamily mortgages and Freddie Mac 

purchased approximately 2.42 million 

single-family mortgages. The disparity 

between the Banks’ and Enterprises’ 

mortgage purchase businesses was great 

even during the peak years of the AMA 

programs. In 2003, the Banks purchased 

approximately 606,000 single-family 

mortgages, which was only 4.3 percent 

of the approximately 14.02 million 

single-family mortgages purchased by 

the Enterprises in that year (see Figure 

1). 

II. Proposed Rule 

On May 28, 2010, FHFA published in 

the Federal Register a proposed rule to 

establish new housing goals for the 

Banks. The 45-day comment period 

closed July 12, 2010. See 75 FR 29947 

(May 28, 2010). FHFA received a total 

of 9 comment letters on the proposed 

rule. Five of the comment letters were 

from Banks, one was from a not-forprofit organization, two were from trade 


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7Federally declared disaster areas are managed 

by FEMA and can be tracked at FEMA’s Web site. 

See http://www.fema.gov/news/disasters.fema. 

8The Department of the Treasury, the Federal 

Reserve Board and the Federal Deposit Insurance 

Corporation, Community Reinvestment Act; 

Interagency Questions and Answers Regarding 

Community Reinvestment; Notice, 74 FR 498, 509 

(Jan. 6, 2009). 

associations, and one was from a 

corporation. 

FHFA has considered all of the 

comments on the proposed rule and has 

determined to adopt a final rule that is 

substantially the same as the proposed 

rule. The comments are discussed below 

in the Analysis of Final Rule section. 

Comments that raised issues beyond the 

scope of the proposed rule are not 

addressed in this final rule, but may be 

considered by FHFA at a future date. 

III. Applicability of Bank Housing 

Goals to 2011 and Beyond 

HERA requires FHFA to establish 

2009 and 2010 interim target housing 

goals for the Banks that facilitate an 

orderly transition and are consistent 

with those of the Enterprises. In order 

to facilitate an orderly transition, the 

final rule establishes housing goals for 

2011 and beyond. The Banks’ unique 

ownership structure and mission is such 

that FHFA needed to add criteria to the 

Bank housing goals that are not 

necessary for those of the Enterprises, 

and FHFA required additional time to 

develop those criteria. The Banks’ 

administrative and monitoring 

challenges will be reduced by enabling 

the Banks to establish policies and 

procedures to meet the housing goals 

requirements with the knowledge that 

these requirements will not be changed 

the following year. FHFA believes this 

approach will facilitate an orderly 

transition to housing goals. 

IV. Summary of Final Rule 

A. Market-Based Housing Goals 

Consistent with the proposed rule, the 

final rule establishes market-based 

single-family housing goals for the 

Banks in a manner largely consistent 

with the market-based single-family 

housing goals for the Enterprises. 

Separate goals are established for AMAapproved mortgages on owner-occupied 

single-family housing. The goals for 

purchase money mortgages separately 

measure performance on purchase 

money mortgages for low-income 

families, for families in low-income 

areas, and for very low-income families. 

The goal for refinancing mortgages 

measures performance on refinancing 

mortgages for low-income families. 

The final rule does not establish 

benchmark levels to measure the Banks’ 

housing goals performance. The Banks’ 

performance under the housing goals 

will be measured relative to the actual 

goals-qualifying shares of the districtlevel primary mortgage market during 

the year in their districts. FHFA will 

calculate the actual goals-qualifying 

shares of the market using all mortgages 

originated in the geographic boundaries 

of each Bank district (meaning that the 

properties securing the mortgages are 

located in the district), including 

mortgages originated both by members 

and non-members. 

A Bank meets a housing goal if its 

annual performance meets or exceeds 

the actual share of the market in that 

district that fits the criteria for a 

particular housing goal for that year. A 

Bank fails to meet a housing goal if it 

falls short of the actual market share for 

that goal in that year. All mortgages 

purchased by a Bank that meet the 

requirements of the final rule will count 

toward the Bank’s goal performance, 

regardless of where the properties 

securing the mortgages are located, but 

the market share against which the 

Bank’s performance will be evaluated 

will be the market share of mortgages 

secured by properties located in the 

district, as described above. The 

housing goals do not apply to an 

individual Bank unless it has exceeded 

the $2.5 billion volume threshold. 

B. Volume Threshold 

Consistent with the proposed rule, the 

final rule establishes a dollar volume 

threshold of $2.5 billion that a Bank’s 

total unpaid principal balance (UPB) of 

AMA-approved mortgage purchases in a 

given year must exceed before the Bank 

is subject to the housing goals. The 

volume threshold recognizes the Banks’ 

unique mission and ownership structure 

and the current status of the AMA 

programs, specifically, their mission to 

provide liquidity to their members. 

V. Analysis of Final Rule 

A. Definitions—§ 1281.1 

The final rule sets forth definitions 

applicable to the Bank housing goals 

provisions. A number of the definitions 

are the same as those applicable to the 

Enterprise housing goals, and other 

definitions were modified to reflect 

their applicability to the Banks’ AMA 

programs. 

‘‘Designated disaster area.’’ The 

definition of ‘‘families in low-income 

areas’’ includes families with incomes at 

or below 100 percent of area median 

income (AMI) who reside in ‘‘designated 

disaster areas.’’ The final rule defines 

‘‘designated disaster area’’ as any census 

tract that is located in a county 

designated by the Federal Government 

as adversely affected by a declared 

major disaster administered by the 

Federal Emergency Management Agency 

(FEMA), where individual assistance 

payments were authorized by FEMA. In 

order to remain consistent with the 

revised definition in the final 2010– 

2011 Enterprise housing goals rule, the 

final Bank housing goals rule definition 

does not include the proposed 

requirement that average damage 

severity, as reported by FEMA, exceed 

$1,000 per household in a census tract. 

Disaster areas are declared when an 

area is adversely affected by some 

unforeseen event. However, not all 

disasters impact housing to the same 

degree, and the severity of the impact 

varies within the declared area. 

Presidential Major Disaster Declarations 

are defined by FEMA at the county level 

in the area affected by the major disaster 

and can be declared to be eligible for 

public assistance, individual assistance, 

or both. Public assistance is available to 

local governments for the repair, 

replacement, or clean-up of public 

infrastructure. Individual assistance is 

broken down further into two 

categories, housing needs and ‘‘other 

than housing needs.’’ 7 Housing needs 

include repair, replacement, and 

construction of homeowner residences. 

Consistent with the proposed rule and 

with the Community Reinvestment Act 

(CRA), the final rule limits the 

definition of ‘‘designated disaster areas’’ 

to those counties eligible for individual 

assistance. 

For purposes of complying with CRA, 

regulators have made the determination 

that ‘‘[e]xaminers will consider 

institution activities related to disaster 

recovery that revitalize or stabilize a 

designated disaster area for 36 months 

following the date of designation. Where 

there is a demonstrable community 

need to extend the period for 

recognizing revitalization or 

stabilization activities in a particular 

disaster area to assist in long-term 

recovery efforts, this time period may be 

extended.’’ 8 To accommodate the Banks’ 

business planning requirements, for 

purposes of the low-income areas 

housing goal, the final rule, consistent 

with the proposed rule, will treat a 

designated disaster area as effective 

beginning on the January 1 after the 

FEMA designation of the county and 

continuing through December 31 of the 

third full calendar year following the 

FEMA designation. If data are available 

in a particular case to support treatment 

as a designated disaster area from an 

earlier date or for a longer period of 


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time, FHFA may provide for such 

treatment by notice to the Banks. 

‘‘Families in low-income areas.’’ 

Consistent with the proposed rule, the 

definition of ‘‘families in low-income 

areas’’ in the final rule includes families 

with incomes at or below 100 percent of 

AMI who reside in ‘‘minority census 

tracts,’’ which is defined by the Safety 

and Soundness Act to mean a census 

tract that has a minority population of 

at least 30 percent and a median family 

income of less than 100 percent of AMI. 

12 U.S.C. 4502(29). In addition, the 

definition of ‘‘families in low-income 

areas’’ includes families with incomes at 

or below 100 percent of AMI who reside 

in ‘‘designated disaster areas.’’ 

‘‘Mortgage.’’ Consistent with the 

proposed rule and the final Enterprise 

2010–2011 housing goals rule, the 

definition of ‘‘mortgage’’ in the final rule 

does not include personal property 

manufactured housing loans. Therefore, 

any purchases of personal property 

manufactured housing loans will not 

qualify for credit under the Bank 

housing goals. 

‘‘Mortgage purchase.’’ Consistent with 

the proposed rule, the final rule defines 

‘‘mortgage purchase’’ as a transaction in 

which a Bank bought or otherwise 

acquired a mortgage. The Banks 

commented that the phrase ‘‘otherwise 

acquired a mortgage’’ is overly broad 

and could be read to include the Banks’ 

Affordable Housing Program (AHP) and 

collateral received from members. The 

Banks requested that FHFA clarify the 

definition to mean a transaction in 

which a Bank bought or otherwise 

acquired a mortgage pursuant to the 

Bank’s authority under the AMA 

regulation. The final rule does not limit 

the definition of ‘‘mortgage purchase’’ to 

mean only purchases of AMA-approved 

mortgages, because the types of 

mortgage purchases that are covered by 

the Bank housing goals are set out in 

§ 1281.11. That section provides that the 

Bank housing goals are limited to 

purchases of AMA-approved mortgages. 

‘‘Refinancing mortgage.’’ Consistent 

with the final Enterprise 2010–2011 

housing goals rule, the definition of 

‘‘refinancing mortgage’’ in the final Bank 

housing goals rule provides that changes 

to a loan as a result of a workout 

agreement generally will not be treated 

as a separate refinancing mortgage. The 

proposed Bank housing goals rule did 

not address workout agreements in the 

definition ‘‘refinancing mortgage,’’ but 

the provision is included in the final 

rule to maintain consistency with the 

long-standing definition of ‘‘refinancing’’ 

under the Enterprise housing goals. 

B. Housing Goals—Proposed §§ 1281.10 

and 1281.11 

General. Consistent with the proposed 

rule, § 1281.10 of the final rule provides 

an overview of the contents of this 

subpart. FHFA will evaluate Bank 

performance under the housing goals 

established for 2010 on a calendar year 

basis. 

Volume Threshold. Consistent with 

the proposed rule, § 1281.11(a) of the 

final rule establishes a volume threshold 

that will trigger application of the 

housing goals to a Bank. Specifically, a 

Bank that in a calendar year purchased 

AMA-approved mortgages with a total 

UPB greater than $2.5 billion will be 

subject to the housing goals for that 

year, a threshold that FHFA selected as 

one which would result in goals being 

applied to substantial AMA programs, 

of a size that a number of Banks have 

operated in the past, while enabling 

small programs, which might serve as 

mortgage sales outlets for CFIs, to 

operate without compliance burdens 

that might cause them to be abandoned. 

To illustrate the magnitude of this 

volume threshold, it is currently equal 

to approximately 0.25 percent of the 

overall single-family market, which 

equaled $986 billion (approximately 

$1.0 trillion). (FHFA arrived at this 

estimate of the size of the market by 

using 2008 HMDA mortgage origination 

data to calculate the total UPB of 

conforming, first lien mortgages 

originated in 2008 that were secured by 

owner-occupied, single-family 

residences. Mortgages for home 

improvement and Home Ownership and 

Equity Protection Act (HOEPA) 

mortgages were excluded to be 

consistent with the market estimate 

approach for the Enterprise housing 

goals.) Looking at this threshold another 

way, assuming that the average UPB of 

the mortgages a Bank purchases equals 

$200,000, a Bank would need to 

purchase only 12,500 mortgages in a 

given year to meet the volume 

threshold. In FHFA’s view, below this 

threshold it would be challenging for 

Banks to ensure that the small numbers 

of AMA mortgages purchased—in 

transactions that the Banks do not 

themselves initiate—are representative 

of the market and include sufficient 

affordable mortgages to meet housing 

goals. 

FHFA requested comment on whether 

a volume threshold should apply, 

whether the proposed volume threshold 

of $2.5 billion is appropriate, whether a 

higher or lower threshold should apply, 

and whether the volume threshold 

alternatives discussed in the proposed 

rule or any other alternatives might be 

used. The Banks recommended 

establishing a volume threshold at $5.0 

billion, or on a sliding scale up to $5 

billion, if the Bank met specified 

qualitative factors that serve the Banks’ 

housing mission, such as a Bank’s 

purchase of Federal Housing 

Administration (FHA) or U.S. 

Department of Veterans Affairs (VA) 

mortgages and its use of Bank AHP 

funds in conjunction with AMA 

mortgage purchases. The Banks stated 

that applying a higher threshold to 

Banks that met such qualitative 

measures would encourage the Banks to 

be accountable to their housing mission. 

The Banks also recommended that 

mortgages purchased from CFIs be 

excluded when determining whether a 

Bank exceeded the volume threshold. 

Finally, the Banks commented that 

because a Bank may not know until the 

fourth quarter whether it will exceed the 

volume threshold that year, the housing 

goals should apply to a Bank only in the 

year following the year for which the 

Bank exceeded the volume threshold. 

A trade association recommended 

establishing a volume threshold of 6,000 

AMA-approved mortgages purchased 

annually. Assuming that the average 

UPB of the mortgages a Bank purchases 

equals $200,000, the volume threshold 

would be equivalent to $1.2 billion. A 

not-for-profit organization 

recommended that there be no volume 

threshold. 

FHFA has considered the comments 

on the proposed $2.5 billion volume 

threshold and concluded that this 

volume threshold will adequately 

balance the Banks’ missions to support 

affordable housing and to provide 

liquidity to CFIs. The volume threshold 

is intended in part to ensure that Banks 

with significant AMA volume in any 

year are subject to the housing goals. For 

that reason, the Bank housing goals will 

apply in the same calendar year for 

which a Bank exceeded the volume 

threshold. In determining whether the 

proposed $2.5 billion is an appropriate 

level for the volume threshold, FHFA 

considered the volume of mortgages 

purchased by the Banks over the past 

decade. From 2002 to 2004, when the 

Banks had their largest presence in the 

national market, a number of Banks had 

annual volumes of AMA-approved 

mortgages greater than $2.5 billion: 

seven Banks in 2002, eight Banks in 

2003 and four Banks in 2004. A 

significant percentage of Banks’ annual 

volume of AMA-approved mortgage 

purchases exceeded $5.0 billion in 2002 

and 2003: four Banks in 2002 and seven 

Banks in 2003. Annual volumes of 

AMA-approved mortgages were 

significantly lower from 2005 to 2009. 


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Although a few Banks had annual 

volumes exceeding $2.5 billion during 

that period, none of the Banks exceeded 

an annual volume of $5.0 billion. (See 

Table 1.) 

Based on this analysis of the volume 

of the Banks’ AMA-approved mortgage 

purchases, a volume threshold of $2.5 

billion is mid-way between the higher 

volume threshold of $5.0 billion and 

housing goals that would apply without 

regard to the volume of mortgages 

purchased by the Bank. Increasing the 

volume threshold above $2.5 billion 

would unnecessarily reduce the 

likelihood that a Bank would be subject 

to housing goals in the future and would 

not meet the intent of Congress that the 

Banks be subject to housing goals, as 

reflected in HERA. 

The volume threshold is also 

intended to ensure that Banks with a 

relatively low annual volume of 

purchases of AMA-approved mortgages, 

i.e., $2.5 billion or less, can continue to 

serve CFIs without being subject to the 

housing goals. Several Banks offer their 

AMA programs as a service to CFIs, 

which is consistent with their mission 

to provide liquidity to their members. 

FHFA set the volume threshold at an 

amount that would ensure that the 

housing goals would not cause the 

Banks that offer AMA programs 

primarily to service CFIs to discontinue 

their programs. The AMA programs are 

an important source of liquidity for such 

CFIs, and the discontinuance of an 

AMA program could adversely impact 

CFIs, such as those in rural areas, that 

may have limited or no access to the 

secondary market because of the higher 

per-mortgage sales cost associated with 

delivering a relatively small number of 

mortgages to purchasers, or the inability 

of these CFIs to meet purchasers’ 

mortgage servicing requirements. 

Because the volume threshold already 

limits the impact of the housing goals 

on a Bank with an AMA program 

focused on its small members, the final 

rule does not exclude mortgages 

purchased from CFIs from counting for 

purposes of the volume threshold. 

Market-Based Housing Goals. 

Consistent with the proposed rule, 

§ 1281.11(b) of the final rule provides 

that compliance with the housing goals 

will be measured by comparing a Bank’s 

performance with the actual goalsqualifying shares of the primary market 

during the year in the Bank’s district. 

Under this retrospective, market-based 

approach, FHFA will calculate the 

actual goals-qualifying shares of the 

district-level primary mortgage market 

during the year using all mortgages 

originated in the geographic boundaries 

of each Bank district (meaning that the 

properties securing the mortgages are 

located in the district), including 

mortgages originated both by members 

and non-members. The Enterprise 

housing goals rule includes both this 

market-based approach and specific 

benchmark housing goal levels for the 

Enterprises. Under the Bank housing 

goals rule, a Bank’s performance will 

not be measured against specific 

benchmark levels. Several provisions in 

the Enterprise housing goals rule that 

relate to the benchmark housing goal 

levels have been omitted from the Bank 

housing goals rule as unnecessary in 

light of the retrospective, market-based 

approach. 

As noted in the proposed rule, FHFA 

believes that the advantages of 

comparing the Bank’s performance to 

actual market performance outweigh the 

disadvantages. A more detailed 

discussion of the market-based 

approach is included in the final 

Enterprise 2010–2011 housing goals 

rule. See 75 FR at 55896–55898. The 

market size analysis used to establish 

the benchmark levels for the Enterprise 

housing goals does not reflect 

differences between the various Bank 

districts. The difficulties in accurately 

predicting the size of the market for 

each housing goal in each Bank district 

make it impractical to set meaningful 

annual benchmark levels for each Bank. 

A disadvantage of the market-based 

approach is that public information on 

the goal-qualifying shares of the singlefamily primary mortgage market is not 

available until the release of Home 

Mortgage Disclosure Act (HMDA) data 

in late summer of the following year. 

However, a Bank that is subject to the 

housing goals will be active in the 

mortgage market in its district and 

hence positioned to understand how its 

performance is likely to compare to the 

overall market in its district. 

In the proposed rule, FHFA discussed 

other possible alternatives for measuring 

market size that had been considered 

and rejected. The Banks recommended 

using a market measurement that is 

limited to mortgages that are similar to 

the types of mortgages a Bank might 

purchase under its AMA program, 

namely, prime, fixed rate, fully 

amortizing mortgage loans that are 

originated by regulated depository 

institutions in the member’s district and 

that are intended for sale in the 

secondary market. However, FHFA has 

determined that a more inclusive 

measurement of the market will provide 

a better basis for evaluating the extent 


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to which a Bank’s purchases under its 

AMA program address mortgage credit 

needs in the Bank’s district. 

The Banks also recommended that 

mortgages purchased from CFIs be 

excluded from consideration under the 

Bank housing goals because such 

mortgages are not represented in the 

HMDA data used to measure the size of 

the market. The Banks recommended 

that such loans also be excluded when 

determining whether a Bank exceeded 

the volume threshold and when 

measuring a Bank’s actual performance 

under the housing goals. The final rule 

does not exclude mortgages purchased 

from CFIs from consideration under the 

housing goals. As discussed above, the 

volume threshold already limits the 

impact of the housing goals on a Bank 

with an AMA program focused on its 

small members. In addition, removing 

all mortgages purchased from CFIs from 

consideration under the housing goals 

would lead to an inaccurate measure of 

the extent to which a Bank’s purchases 

of AMA-approved mortgages meet the 

housing goals. 

Consistent with the proposed rule, the 

final rule does not establish benchmark 

levels to measure the Banks’ 

performance under the housing goals. 

FHFA requested comment on whether it 

would be appropriate to establish 

benchmark levels as a means of 

measuring the Banks’ housing goals 

performance, in addition to measuring 

performance based on a Bank’s actual 

share of goal-qualifying mortgages 

relative to its district-level market share, 

and if so, whether it would be 

appropriate to set benchmark levels for 

the Bank housing goals equal to the 

benchmark levels for the Enterprise 

housing goals. The comments did not 

specifically address establishing 

benchmark levels for the Banks, 

although a trade association suggested 

that the Banks should be encouraged to 

exceed the market share. 

FHFA has concluded that it would be 

inappropriate to set benchmark levels 

for the Banks equal to the benchmark 

levels for the corresponding Enterprise 

housing goals, because the Enterprise 

benchmarks are based on national 

mortgage market estimates and no Bank 

has an AMA program with a national 

scope. In addition, FHFA has concluded 

that setting benchmark levels based on 

district-level market size estimates 

would be inappropriate because the 

market sizes cannot be reliably 

estimated in advance. 

Section 1281.11(b) establishes criteria 

for determining the size of the market 

for each Bank district based on HMDA 

data on mortgages secured by property 

located in that Bank district. The criteria 

for establishing the size of the market 

reflect the types of mortgages that will 

count for purposes of the housing goals 

and that are typically eligible for 

purchase by a Bank. The criteria are the 

same as those in the proposed rule 

except for the definition of higherpriced loan to be used in the 

measurement of market size. The 

proposed rule would have excluded 

from the measurement of the market any 

mortgages with rate spreads of 300 basis 

points or more above the applicable 

Average Prime Offer Rate (APOR) 

reported under HMDA. Consistent with 

the definition in the final Enterprise 

2010–2011 housing goals rule, for 

purposes of measuring the market for 

each Bank district, mortgages with rate 

spreads of 150 basis points above the 

applicable APOR reported under HMDA 

will be excluded. The 150 basis point 

rate spread is consistent with the 

definition of higher-priced loan used by 

the Federal Reserve Board. 

Bank Housing Goals. Consistent with 

the proposed rule, § 1281.11(c) through 

1281.11(f) of the final rule establishes 

four single-family housing goals 

applicable to any Bank that exceeds the 

volume threshold in a particular year. 

Goals are established for purchase 

money mortgages for low-income 

families, for families in low-income 

areas, and for very low-income families. 

In addition, a goal is established for 

refinancing mortgages for low-income 

families. The single-family housing 

goals will be based on an evaluation of 

the Bank’s performance relative to the 

market for each housing goal in each 

year. The Banks have not been approved 

to purchase multifamily loans under the 

AMA programs. Accordingly, unlike the 

new Enterprise housing goals, the Bank 

housing goals do not include a 

multifamily special affordable housing 

goal or multifamily special affordable 

housing subgoal. 

Two commenters recommended 

expanding the coverage of the Bank 

housing goals beyond the scope of the 

Enterprise housing goals. A not-forprofit organization recommended that 

FHFA give Bank housing goals credit for 

rental units in single-family properties, 

stating that such units provide an 

important source of affordable housing. 

A trade association suggested that FHFA 

consider adding a neighborhood goal for 

refinance lending, in addition to the 

borrower goal. In order to remain 

consistent with the Enterprise housing 

goals, the final rule does not alter the 

basic structure of the proposed Bank 

housing goals. The Bank housing goals 

do not include any investor-owned 

single-family properties, and they do 

not provide additional credit for any 

rental units in owner-occupied singlefamily properties. The Bank housing 

goals also do not include a separate goal 

for refinancing mortgages in low-income 

areas. 

In contrast to the new Enterprise 

housing goals, the Bank housing goals 

also do not include a low-income areas 

subgoal. Because the Bank housing goals 

do not include benchmark levels set 

prospectively, there is no need for a 

separate subgoal to address the 

unpredictable impact designated 

disaster areas may have from year to 

year. 

C. General Counting Requirements— 

§ 1281.12 

Consistent with the proposed rule, 

§ 1281.12 of the final rule sets forth 

general requirements for the counting of 

Bank AMA-approved mortgage 

purchases toward the achievement of 

the housing goals. Performance under 

the housing goals will be evaluated 

based on the percentage of all AMAapproved mortgages on single-family, 

owner-occupied properties purchased 

by a Bank that meet a particular goal. 

As proposed, § 1281.12(a) of the final 

rule provides that performance under 

each of the single-family housing goals 

shall be measured using a fraction that 

is converted into a percentage. Neither 

the numerator nor the denominator 

shall include Bank transactions or 

activities that are not AMA-approved 

mortgage purchases as defined by FHFA 

or that are specifically excluded as 

ineligible under § 1281.13(b). The 

numerator is the number of AMAapproved mortgage purchases of a Bank 

in a particular year that finance owneroccupied single-family properties that 

count toward achievement of a 

particular housing goal. The 

denominator is the total number of 

AMA-approved mortgage purchases of a 

Bank in a particular year that finance 

owner-occupied, single-family 

properties. 

As proposed, § 1281.12(b) of the final 

rule provides that when a Bank lacks 

sufficient data or information, e.g., 

income of mortgagor, to determine 

whether the purchase of a mortgage 

counts toward achievement of a 

particular housing goal, that mortgage 

purchase shall be included in the 

denominator for that housing goal, but 

may not be included in the numerator. 

The Banks may not use missing data 

estimation methodologies, as used by 

the Enterprises, in light of the 

complexity of developing an estimation 

methodology suitable for the Banks. 

FHFA invited comment on whether a 

method for estimating missing 

affordability data would be feasible for 


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9 In May 2007, FHFB also approved the Atlanta 

Bank’s request to offer the Global Mortgage Alliance 

Program (GMAP), under which the Bank would 

facilitate the sale of certain qualified conforming 

mortgage loans from eligible members to another of 

its members—Global Mortgage Alliance, LLC, 

which would then securitize those loans. To date, 

no transactions have occurred under GMAP. The 

GMAP is not an AMA program authorized under 

part 955. Both the MPF Xtra and GMAP programs 

were separately authorized under the Banks’ 

incidental authority contained in sections 11(a) and 

11(e)(1) of the Bank Act. See 12 U.S.C. 1431(a), 

1431(e)(1). 

the Bank housing goals but did not 

receive comments on this issue. 

The provisions in § 1281.12(c) 

through (f), which address credit toward 

multiple goals, application of median 

income, sampling and newly available 

data, respectively, are consistent with 

the provisions in the proposed rule and 

the final Enterprise 2010–2011 housing 

goals rule. 

The MPF program allows Banks to 

purchase a percentage of a mortgage or 

mortgage pool initially acquired by 

another Bank under the program. As 

discussed in the proposed rule, for 

purposes of receiving credit under one 

of the housing goals, each mortgage will 

be assigned to the Bank that initially 

acquired the mortgage regardless of 

whether an interest in the mortgage was 

later sold to another Bank. 

In September 2008, FHFA approved 

the Chicago Bank’s request to establish 

the MPF Xtra program, under which the 

Bank would buy certain qualified, 

conforming mortgages from eligible 

members for immediate sale to Fannie 

Mae. As discussed in the proposed rule, 

the MPF Xtra program is not an AMA 

program authorized under 12 CFR part 

955.9 Under the MPF Xtra program, the 

Bank serves essentially as a conduit or 

intermediary with respect to the sale of 

the mortgages to Fannie Mae. The 

mortgages may be counted by Fannie 

Mae toward compliance with its 

housing goals. If the mortgages were 

also to be considered for purposes of the 

Bank housing goals, double-counting of 

the mortgages could occur. Avoiding 

double-counting of mortgage purchases 

is consistent with the Enterprise 

housing goals. An Enterprise cannot 

receive credit towards a housing goal for 

a mortgage purchase if the other 

Enterprise received credit for that 

mortgage. Additionally, under the 

Enterprise housing goals, credit towards 

a housing goal is only awarded for a 

mortgage where the Enterprise 

purchases the mortgage or assumes the 

credit risks associated with the 

mortgage. The Bank does not fund MPF 

Xtra mortgages or assume any credit 

risks in MPF Xtra transactions. For these 

reasons, under the final rule, mortgages 

purchased by a Bank pursuant to the 

MPF Xtra program will not be 

considered for purposes of the Bank 

housing goals. 

D. Special Counting Requirements— 

§ 1281.13 

Consistent with the proposed rule, 

§ 1281.13 of the final rule sets forth 

special counting requirements for the 

receipt of full, partial or no credit for a 

transaction toward achievement of the 

housing goals, a number of which are 

discussed further below. 

Section 1281.13(b) specifies the types 

of transactions that shall not be counted 

for purposes of the housing goals and 

shall not be included in the numerator 

or the denominator in calculating a 

Bank’s performance under the housing 

goals. The intent of this section is to 

specify the counting treatment for 

transactions in which the Banks are 

authorized to engage under the 

approved AMA programs. The counting 

rules do not purport to authorize the 

purchase of any types of mortgages, but 

are intended solely to indicate whether 

such mortgages shall receive full, partial 

or no credit toward the housing goals. 

Accordingly, transactions in which the 

Banks are not authorized to engage 

under the approved AMA programs are 

not included in paragraph (b). The Bank 

counting rules differ in some respects 

from the counting rules for the 

Enterprise housing goals. For example, 

the Banks are not authorized to 

purchase private label securities (PLS) 

under the AMA programs; therefore it is 

not necessary to exclude PLS from 

counting under the Bank housing goals. 

On the other hand, while the Banks are 

authorized to purchase nonconventional loans under the AMA 

authority, such loans are excluded from 

counting under the Enterprise housing 

goals and, therefore, have been excluded 

from counting under the Bank housing 

goals as well. 

Section 1281.13(b) of the final rule 

makes clear that where a mortgage falls 

within one of the categories excluded 

from consideration under the housing 

goals, the mortgage shall be excluded 

even if it otherwise falls within one of 

the special counting rules in 

§ 1281.13(c). For example, a nonconventional mortgage that would be 

excluded from consideration pursuant 

to § 1281.13(b)(1) cannot be counted 

even if it otherwise counts as a seasoned 

mortgage under § 1281.13(c)(2). 

Home Equity Conversion Mortgages. 

Section 1281.13(b)(1) of the final rule 

excludes the purchases of all nonconventional single-family mortgages, 

including Home Equity Conversion 

Mortgages (HECMs), from counting 

towards the Banks’ housing goals—that 

is, such purchases shall be excluded 

from both the numerator and 

denominator in calculating goal 

performance. This is consistent with the 

counting treatment for the new 

Enterprise housing goals, as HERA 

amended section 1332(a) of the Safety 

and Soundness Act to restrict the 

Enterprise single-family housing goals 

to include only conventional mortgages. 

See 12 U.S.C. 4562(a). 

Mortgages financing secondary 

residences. Section 1281.13(b)(6) of the 

final rule prohibits the counting of 

mortgage purchases to the extent they 

finance any dwelling units that are 

secondary residences. This is consistent 

with the counting treatment for the new 

Enterprise housing goals, as HERA 

amended section 1332(a) of the Safety 

and Soundness Act to restrict the 

Enterprise single-family housing goals 

to include only purchases of owneroccupied mortgages. See 12 U.S.C. 4562. 

Subordinate liens. Section 

1281.13(b)(8) of the final rule excludes 

the purchases of subordinate lien 

mortgages (second mortgages) from 

counting towards the Banks’ housing 

goals. HERA amended section 1331 of 

the Safety and Soundness Act to 

provide that the Enterprise single-family 

housing goals are limited to purchase 

money or refinancing mortgages. See 12 

U.S.C. 4561. Consistent with the 

counting treatment for the new 

Enterprise housing goals, the Bank 

housing goals exclude home equity 

loans from counting for purposes of the 

housing goals. The Bank housing goals 

also exclude other subordinate lien 

mortgages, such as ‘‘piggy-back’’ loans 

that may be acquired by a Bank along 

with the corresponding first lien 

mortgage. Subordinate lien mortgages 

are excluded because it is difficult to 

determine whether such loans are 

purchase money loans or home equity 

loans, and because first lien mortgages 

provide a better measure of a Bank’s 

support for residential housing. 

Previously counted mortgages. 

Section 1281.13(b)(9) of the final rule 

prohibits the counting of mortgages 

toward performance under the housing 

goals if the mortgages have previously 

been counted for purposes of the 

performance of the Bank under the 

housing goals. In order to limit 

excessively burdensome recordkeeping 

that could result, the rule makes clear 

that this limitation only extends back 

for five years. Although the Banks have 

not previously been subject to housing 

goals, this language is included for 

applicability in future years. 

Construction-to-permanent loans. 

Section 1281.13(b)(10) of the final rule 


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excludes purchases of mortgages 

secured by properties that have not been 

approved for occupancy from 

consideration for purposes of the 

housing goals. 

Housing goals credit for certain 

transactions. Section 1281.13(c) of the 

final rule provides that certain types of 

transactions shall be counted for 

purposes of the housing goals, including 

mortgages on cooperative housing and 

condominium units, seasoned 

mortgages, and refinancing mortgages. 

Section 1281.13(c) does not include 

certain types of transactions that are 

eligible for housing goals credit under 

the Enterprise housing goals, including 

credit enhancements for goal-qualifying 

mortgages, entering into risk sharing 

agreements with federal agencies to 

finance qualifying mortgages, and 

purchasing mortgage revenue bonds 

backed by qualifying mortgages. Such 

transactions are not eligible for Bank 

housing goals credit because of the more 

limited scope of the approved AMA 

programs. Section 1281.13(c) makes 

clear that where a transaction falls 

under more than one of the special 

counting rules in § 1281.13(c), all of the 

applicable requirements must be 

satisfied in order for the loan to be 

counted for purposes of the housing 

goals. 

HOEPA mortgages and mortgages 

with unacceptable terms and 

conditions. Consistent with the 

proposed rule, § 1281.13(d) of the final 

rule provides that HOEPA mortgages 

and mortgages with unacceptable terms 

and conditions must be counted in the 

denominator as mortgage purchases but 

may not be counted in the numerator, 

regardless of whether the mortgages 

would otherwise qualify based on the 

affordability and other counting criteria. 

This treatment is consistent with past 

practice for the Enterprises and with 

section 1332(i) of the Safety and 

Soundness Act, as amended by HERA, 

which provides that no credit may be 

given for mortgages that FHFA 

determines are ‘‘unacceptable or 

contrary to good lending practices.’’ 12 

U.S.C. 4562(i). 

The proposed rule defined ‘‘mortgages 

with unacceptable terms or conditions’’ 

to include mortgages with excessive fees 

or interest rates, as well as mortgages 

with prepayment penalties, mortgages 

sold with prepaid single-premium credit 

life insurance products, and mortgages 

originated using practices that violate 

fair lending laws or that are contrary to 

the Interagency Guidance on 

Nontraditional Mortgage Product Risks 

(71 FR 58609) (Oct. 4, 2006), the 

Interagency Statement on Subprime 

Mortgage Lending (72 FR 37569) (July 

10, 2007), or similar guidance 

subsequently issued by federal banking 

agencies. 

A trade association commented that 

FHFA should strengthen the terms and 

conditions that constitute unacceptable 

mortgages, and recommended the use of 

Regulation Z and HOEPA rather than 

interagency guidance to determine 

whether a mortgage is eligible to be 

counted under the housing goals. The 

final rule does not change the proposed 

definition of ‘‘mortgages with 

unacceptable terms or conditions.’’ 

While the final rule specifically 

references interagency guidance on 

subprime and nontraditional loans, 

FHFA expects the Banks to ensure that 

mortgage loans they acquire comply 

with Regulation Z and HOEPA, as well 

as any federal law related to minimum 

standards for mortgages and predatory 

lending. As markets and abusive 

practices evolve, FHFA may determine 

additional terms and conditions to be 

unacceptable. 

FHFA guidance. Section 1281.13(e) of 

the final rule provides that FHFA may 

provide guidance on the treatment of 

any transactions under the housing 

goals. The guidance may be provided in 

response to a request from a Bank, or at 

the initiation of FHFA. 

Private label securities. As discussed 

in the proposed rule, because FHFA is 

counting only mortgages purchased 

through AMA programs in determining 

each Bank’s housing goal performance, 

and the Banks are not authorized to 

purchase PLS through these programs, 

PLS will not be counted in determining 

a Bank’s housing goals performance. 

Housing finance agency obligations 

and other transactions. Consistent with 

the proposed rule, the final rule 

provides that only mortgages purchased 

through AMA programs will count in 

determining each Bank’s housing goal 

performance. A trade association 

commenter recommended giving the 

Banks housing goals credit for Bank 

advances and investments, including 

transactions such as the purchase of 

housing finance agency (HFA) bonds, 

investment in housing-related bonds 

and tax credits, and advances to HFAs. 

The final rule does not expand the types 

of transactions that will receive credit 

under the housing goals to include 

transactions, such as purchases of HFA 

obligations, that are not AMA-approved 

mortgage purchases. Expanding the 

types of Bank transactions subject to 

housing goals beyond AMA-approved 

mortgage purchases would impede the 

ability of the Banks to make an orderly 

transition to the housing goals, because 

it would entail the Banks collecting 

information they may not currently 

collect, and for some Banks, modifying 

their activities involving HFAs. 

E. Housing Goals Enforcement— 

§§ 1281.14 and 1281.15 

Consistent with the proposed rule, 

§ 1281.14 of the final rule provides that 

the Director shall determine whether 

each Bank has exceeded the volume 

threshold on an annual basis. For any 

Bank that has exceeded the volume 

threshold, the Director will also 

determine whether the Bank has met the 

housing goals, in accordance with the 

standards established under the Safety 

and Soundness Act, as amended by 

HERA. If the Director determines that a 

Bank has failed to meet any housing 

goal, the Director shall provide notice to 

the Bank in writing of such preliminary 

determination. 

Consistent with the proposed rule, 

§ 1281.15 of the final rule includes 

requirements for submission of a 

housing plan by a Bank for failure to 

meet any housing goal that is 

determined to be feasible by FHFA. The 

requirement to submit a housing plan is 

at the discretion of the Director. 

F. Reporting Requirements—§§ 1281.20 

Through 1281.23 

As required for the Enterprises, and 

consistent with the proposed rule, 

§§ 1281.20 through 1281.23 of the final 

rule establish reporting requirements for 

the Banks with respect to their housing 

goals performance. Section 1281.21(a) 

requires the Banks to collect and 

compile computerized loan-level data 

on each AMA-approved mortgage 

purchased, as described in FHFA’s Data 

Reporting Manual (DRM). These 

reporting requirements apply to each 

Bank, regardless of whether in a 

particular year the Bank expects to 

exceed the volume threshold and thus 

be subject to the housing goals. 

Section 1281.21(b) requires each Bank 

to submit to the Director, on a semiannual basis, a Mortgage Report 

containing aggregations of the loan-level 

mortgage data for year-to-date AMAapproved mortgage purchases, and yearto-date dollar volume, number of units, 

and number of AMA-approved 

mortgages on owner-occupied 

properties purchased that do, and do 

not, qualify under each housing goal. 

The loan-level data that must be 

reported are currently collected by 

FHFA on a semi-annual basis. As 

advances in technology have made more 

frequent submissions less burdensome, 

FHFA will consider quarterly reporting 

for the Banks in future years. Quarterly 

reporting would be consistent with the 

current requirements for the Enterprises. 

The additional data provided facilitates 


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FHFA’s monitoring of Enterprise 

performance under the housing goals. 

The Enterprises are also required to 

submit Annual Housing Activities 

Reports (AHARs) to FHFA. The final 

rule does not require the Banks to 

submit AHARs, but FHFA will consider 

requiring such reports in the future. 

Consistent with the proposed rule, 

§ 1281.22 of the final rule requires each 

Bank to provide to the Director such 

reports, information and data as the 

Director may request from time to time, 

or as may be supplemented in the DRM. 

As proposed, § 1281.23 of the final 

rule sets forth the data integrity process 

for Bank housing goals data. The final 

rule requires the senior officer of each 

Bank who is responsible for submitting 

any report, data or other information for 

which certification is requested by the 

Director, to certify such report, data or 

information. FHFA will determine on an 

annual basis the official housing goals 

performance figures for any Bank that is 

subject to the housing goals, and may 

resolve any error, omission or 

discrepancy by adjusting the Bank’s 

official housing goals performance 

figure. If the Director determines that 

the year-end data reported by a Bank for 

a year preceding the latest year for 

which data on housing goals 

performance was reported to FHFA 

contained a material error, omission or 

discrepancy, the Director may increase 

the corresponding housing goal for the 

current year by the number of mortgages 

that the Director determines were 

overstated in the prior year’s goal 

performance. 

FHFA will implement the data 

integrity process pursuant to its general 

regulatory authority over the Banks. 

FHFA expects that the Banks will work 

cooperatively with FHFA to identify 

and resolve any discrepancies or errors 

in the housing goals data reported to 

FHFA. 

VI. Paperwork Reduction Act 

The final rule does not contain any 

information collection requirement that 

requires the approval of the Office of 

Management and Budget under the 

Paperwork Reduction Act (44 U.S.C. 

3501 et seq.). 

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 final rule is not likely to have 

a significant economic impact on a 

substantial number of small business 

entities because the regulation is 

applicable only to the Banks, which are 

not small entities for purposes of the 

Regulatory Flexibility Act. 

List of Subjects in 12 CFR Part 1281 

Credit, Federal home loan banks, 

Housing, Mortgages, Reporting and 

recordkeeping requirements. 

■ Accordingly, for the reasons stated in 

the preamble, under the authority of 12 

U.S.C. 1430c, FHFA amends chapter XII 

of title 12 of the Code of Federal 

Regulations, by adding new part 1281 to 

subchapter E to read as follows: 

SUBCHAPTER E—HOUSING GOALS AND 

MISSION 

PART 1281—FEDERAL HOME LOAN 

BANK HOUSING GOALS 

Sec. 

Subpart A—General 

1281.1 Definitions. 

Subpart B—Housing Goals 

1281.10 General. 

1281.11 Bank housing goals. 

1281.12 General counting requirements. 

1281.13 Special counting requirements. 

1281.14 Determination of compliance with 

housing goals; notice of determination. 

1281.15 Housing plans. 

Subpart C—Reporting Requirements 

1281.20 General. 

1281.21 Mortgage Reports. 

1281.22 Periodic reports. 

1281.23 Bank data integrity. 

Authority: 12 U.S.C. 1430c. 

Subpart A—General 

§ 1281.1 Definitions. 

As used in this part: 

Acquired Member Assets (AMA) 

program means a program that 

authorizes a Bank to hold assets 

acquired from or through Bank members 

or housing associates by means of either 

a purchase or a funding transaction, 

subject to the requirements of 12 CFR 

parts 955 and 980, or successor 

regulations. 

AMA-approved mortgage means a 

mortgage that meets the requirements of 

the AMA program at 12 CFR part 955, 

and is approved to be implemented 

under 12 CFR part 980, or successor 

regulations. 

Balloon mortgage means a mortgage 

providing for payments at regular 

intervals, with a final payment (balloon 

payment) that is at least 5 percent more 

than the periodic payments. The 

periodic payments may cover some or 

all of the periodic principal or interest. 

Typically, the periodic payments are 

level monthly payments that would 

fully amortize the mortgage over a stated 

term and the balloon payment is a single 

payment due after a specific period (but 

before the mortgage would fully 

amortize) and pays off or satisfies the 

outstanding balance of the mortgage. 

Bank means a Federal Home Loan 

Bank established under section 12 of the 

Bank Act (12 U.S.C. 1432). 

Bank Act means the Federal Home 

Loan Bank Act, as amended (12 U.S.C. 

1421 et seq.). 

Bank System means the Federal Home 

Loan Bank System, consisting of the 12 

Banks and the Office of Finance. 

Borrower income means the total 

gross income relied on in making the 

credit decision. 

Conforming mortgage means, with 

respect to a Bank, a conventional AMAapproved single-family mortgage having 

an original principal obligation that 

does not exceed the dollar limitation in 

effect at the time of such origination and 

applicable to such mortgage under 12 

CFR 955.2(a)(1)(i) and 12 U.S.C. 

1717(b)(2), as these sections may be 

amended. 

Conventional mortgage means a 

mortgage other than a mortgage as to 

which a Bank has the benefit of any 

guaranty, insurance or other obligation 

by the United States or any of its 

agencies or instrumentalities. 

Data Reporting Manual (DRM) means 

the manual prepared by FHFA in 

connection with the Banks’ reporting 

requirements, as may be supplemented 

from time to time, including reporting 

requirements under this part. 

Day means a calendar day. 

Designated disaster area means any 

census tract that is located in a county 

designated by the federal government as 

adversely affected by a declared major 

disaster administered by FEMA, where 

individual assistance payments were 

authorized by FEMA. A census tract 

shall be treated as a ‘‘designated disaster 

area’’ for purposes of this part beginning 

on the January 1 after the FEMA 

designation of the county, or such 

earlier date as determined by FHFA, and 

continuing through December 31 of the 

third full calendar year following the 

FEMA designation. This time period 

may be adjusted for a particular disaster 

area by notice from FHFA to the Banks. 

Director means the Director of FHFA, 

or his or her designee. 


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Dwelling unit means a room or unified 

combination of rooms intended for use, 

in whole or in part, as a dwelling by one 

or more persons, and includes a 

dwelling unit in a single-family 

property, multifamily property, or other 

residential or mixed-use property. 

Families in low-income areas means: 

(1) Any family that resides in a census 

tract or block numbering area in which 

the median income does not exceed 80 

percent of the area median income; 

(2) Any family with an income that 

does not exceed area median income 

that resides in a minority census tract; 

and 

(3) Any family with an income that 

does not exceed area median income 

that resides in a designated disaster 

area. 

Family means one or more 

individuals who occupy the same 

dwelling unit. 

FEMA means the Federal Emergency 

Management Agency. 

FHFA means the Federal Housing 

Finance Agency. 

HMDA means the Home Mortgage 

Disclosure Act of 1975 (12 U.S.C. 2801, 

et seq.), as amended. 

HOEPA mortgage means a mortgage 

covered by section 103(aa) of the Truth 

in Lending Act (15 U.S.C. 1602(aa)), as 

amended by the Home Ownership 

Equity Protection Act (HOEPA), as 

implemented by the Board of Governors 

of the Federal Reserve System. 

HUD means the United States 

Department of Housing and Urban 

Development. 

Low-income means income not in 

excess of 80 percent of area median 

income. 

Median income means, with respect 

to an area, the unadjusted median 

family income for the area as most 

recently determined by HUD. FHFA will 

provide the Banks annually with 

information specifying how the median 

family income estimates for 

metropolitan areas are to be applied for 

the purposes of determining median 

family income. 

Member means an institution that has 

been approved for membership in a 

Bank and has purchased capital stock in 

the Bank in accordance with 12 CFR 

1263.20 or 1263.24(b), or successor 

regulation(s). 

Metropolitan area means a 

metropolitan statistical area (MSA), or a 

portion of such an area, including 

Metropolitan Divisions, for which 

median family income estimates are 

determined by HUD. 

Minority means any individual who is 

included within any one or more of the 

following racial and ethnic categories: 

(1) American Indian or Alaskan 

Native—a person having origins in any 

of the original peoples of North and 

South America (including Central 

America), and who maintains tribal 

affiliation or community attachment; 

(2) Asian—a person having origins in 

any of the original peoples of the Far 

East, Southeast Asia, or the Indian 

subcontinent, including, for example, 

Cambodia, China, India, Japan, Korea, 

Malaysia, Pakistan, the Philippine 

Islands, Thailand, and Vietnam; 

(3) Black or African American—a 

person having origins in any of the 

black racial groups of Africa; 

(4) Hispanic or Latino—a person of 

Cuban, Mexican, Puerto Rican, South or 

Central American, or other Spanish 

culture or origin, regardless of race; and 

(5) Native Hawaiian or Other Pacific 

Islander—a person having origins in any 

of the original peoples of Hawaii, Guam, 

Samoa, or other Pacific Islands. 

Minority census tract means a census 

tract that has a minority population of 

at least 30 percent and a median income 

of less than 100 percent of the area 

median income. 

Moderate-income means income not 

in excess of area median income. 

Mortgage means a member of such 

classes of liens, including subordinate 

liens, as are commonly given or are 

legally effective to secure advances on, 

or the unpaid purchase price of, real 

estate under the laws of the State in 

which the real estate is located, together 

with the credit instruments, if any, 

secured thereby, and includes interests 

in mortgages. ‘‘Mortgage’’ includes a 

mortgage, lien, including a subordinate 

lien, or other security interest on the 

stock or membership certificate issued 

to a tenant-stockholder or residentmember by a cooperative housing 

corporation, as defined in section 216 of 

the Internal Revenue Code of 1986, and 

on the proprietary lease, occupancy 

agreement, or right of tenancy in the 

dwelling unit of the tenant-stockholder 

or resident-member in such cooperative 

housing corporation. 

Mortgage data means data obtained by 

the Director from the Bank or Banks 

under this part and/or the Data 

Reporting Manual. 

Mortgage purchase means a 

transaction in which a Bank bought or 

otherwise acquired a mortgage. 

Mortgage with unacceptable terms or 

conditions means a single-family 

mortgage, including a reverse mortgage, 

or a group or category of such 

mortgages, with one or more of the 

following terms or conditions: 

(1) Excessive fees, where the total 

points and fees charged to a borrower 

exceed the greater of 5 percent of the 

loan amount or a maximum dollar 

amount of $1,000, or an alternative 

amount requested by a Bank and 

determined by the Director as 

appropriate for small mortgages; 

(i) For purposes of this definition, 

points and fees include: 

(A) Origination fees; 

(B) Underwriting fees; 

(C) Broker fees; 

(D) Finder’s fees; and 

(E) Charges that the member imposes 

as a condition of making the loan, 

whether they are paid to the member or 

a third party; 

(ii) For purposes of this definition, 

points and fees do not include: 

(A) Bona fide discount points; 

(B) Fees paid for actual services 

rendered in connection with the 

origination of the mortgage, such as 

attorneys’ fees, notary’s fees, and fees 

paid for property appraisals, credit 

reports, surveys, title examinations and 

extracts, flood and tax certifications, 

and home inspections; 

(C) The cost of mortgage insurance or 

credit-risk price adjustments; 

(D) The costs of title, hazard, and 

flood insurance policies; 

(E) State and local transfer taxes or 

fees; 

(F) Escrow deposits for the future 

payment of taxes and insurance 

premiums; and 

(G) Other miscellaneous fees and 

charges that, in total, do not exceed 0.25 

percent of the loan amount; 

(2) An annual percentage rate that 

exceeds by more than 8 percentage 

points the yield on Treasury securities 

with comparable maturities as of the 

fifteenth day of the month immediately 

preceding the month in which the 

application for the extension of credit 

was received; 

(3) Prepayment penalties, except 

where: 

(i) The mortgage provides some 

benefit to the borrower in exchange for 

the prepayment penalty (e.g., a rate or 

fee reduction for accepting the 

prepayment premium); 

(ii) The borrower is offered the choice 

of another mortgage that does not 

contain payment of such a premium; 

(iii) The terms of the mortgage 

provision containing the prepayment 

penalty are adequately disclosed to the 

borrower; and 

(iv) The prepayment penalty is not 

charged when the mortgage debt is 

accelerated as the result of the 

borrower’s default in making his or her 

mortgage payments; 

(4) The sale or financing of prepaid 

single-premium credit life insurance 

products in connection with the 

origination of the mortgage; 

(5) Underwriting practices contrary to 

the Interagency Guidance on 


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Federal Register / Vol. 75, No. 247 / Monday, December 27, 2010 / Rules and Regulations 81107 

Nontraditional Mortgage Product Risks 

(71 FR 58609) (Oct. 4, 2006), the 

Interagency Statement on Subprime 

Mortgage Lending (72 FR 37569) (July 

10, 2007), or similar guidance 

subsequently issued by federal banking 

agencies; 

(6) Failure to comply with fair lending 

requirements; or 

(7) Other terms or conditions that are 

determined by the Director to be an 

unacceptable term or condition of a 

mortgage. 

Non-metropolitan area means a 

county, or a portion of a county, 

including those counties that comprise 

Micropolitan Statistical Areas, located 

outside any metropolitan area for which 

median family income estimates are 

published annually by HUD. 

Owner-occupied housing means 

single-family housing in which a 

mortgagor resides, including two- to 

four-unit owner-occupied properties 

where one or more units are used for 

rental purposes. 

Purchase money mortgage means a 

mortgage given to secure a loan used for 

the purchase of a single-family 

residential property. 

Refinancing mortgage means a 

mortgage undertaken by a borrower that 

satisfies or replaces an existing mortgage 

of such borrower. The term does not 

include: 

(1) A renewal of a single payment 

obligation with no change in the 

original terms; 

(2) A reduction in the annual 

percentage rate of the mortgage as 

computed under the Truth in Lending 

Act, with a corresponding change in the 

payment schedule; 

(3) An agreement involving a court 

proceeding; 

(4) A workout agreement, in which a 

change in the payment schedule or 

collateral requirements is agreed to as a 

result of the mortgagor’s default or 

delinquency, unless the rate is increased 

or the new amount financed exceeds the 

unpaid balance plus earned finance 

charges and premiums for the 

continuation of insurance; 

(5) The renewal of optional insurance 

purchased by the mortgagor and added 

to an existing mortgage; or 

(6) A conversion of a balloon 

mortgage note on a single-family 

property to a fully amortizing mortgage 

note where the Bank already owns or 

has an interest in the balloon note at the 

time of the conversion. 

Residence means a property where 

one or more families reside. 

Residential mortgage means a 

mortgage on single-family housing. 

Seasoned mortgage means a mortgage 

on which the date of the mortgage note 

is more than one year before the Bank 

purchased the mortgage. 

Second mortgage means any mortgage 

that has a lien position subordinate only 

to the lien of the first mortgage. 

Secondary residence means a 

dwelling where the mortgagor maintains 

(or will maintain) a part-time place of 

abode and typically spends (or will 

spend) less than the majority of the 

calendar year. A person may have more 

than one secondary residence at a time. 

Single-family housing means a 

residence consisting of one to four 

dwelling units. Single-family housing 

includes condominium dwelling units 

and dwelling units in cooperative 

housing projects. 

Very low-income means income not in 

excess of 50 percent of area median 

income. 

Subpart B—Housing Goals 

§ 1281.10 General. 

Pursuant to the requirements of the 

Bank Act, as amended (12 U.S.C. 

1430c), this subpart establishes: 

(a) Three single-family owneroccupied purchase money mortgage 

housing goals, and one single-family 

refinancing mortgage housing goal; 

(b) A volume threshold for the 

application of the housing goals to a 

Bank; 

(c) Requirements for measuring 

performance under the housing goals; 

and 

(d) Procedures for monitoring and 

enforcing the housing goals. 

§ 1281.11 Bank housing goals. 

(a) Volume threshold. The housing 

goals established in this section shall 

apply to a Bank for a calendar year only 

if the unpaid principal balance (UPB) of 

the Bank’s purchases of AMA-approved 

mortgages in that year exceeds $2.5 

billion. 

(b) Market-based housing goals. A 

Bank that is subject to the housing goals 

shall be in compliance with a housing 

goal if its performance under the 

housing goal meets or exceeds the share 

of the market that qualifies for the 

housing goal. The size of the market for 

each housing goal shall be established 

annually by FHFA for each Bank district 

based on data reported pursuant to the 

Home Mortgage Disclosure Act for a 

given year. Unless otherwise adjusted 

by FHFA, the size of the market for each 

Bank district shall be determined based 

on the following criteria: 

(1) Only owner-occupied, 

conventional loans secured by property 

located in that Bank district shall be 

considered; 

(2) Purchase money mortgages and 

refinancing mortgages shall be counted 

only for the applicable housing goal or 

goals; 

(3) All mortgages flagged as HOEPA 

loans or subordinate lien loans shall be 

excluded; 

(4) All mortgages with original 

principal balances above the conforming 

loan limits for single unit properties for 

the year being evaluated (rounded to the 

nearest $1,000) shall be excluded; 

(5) All mortgages with rate spreads of 

150 basis points or more above the 

applicable average prime offer rate as 

reported in the Home Mortgage 

Disclosure Act data shall be excluded; 

and 

(6) All mortgages that are missing 

information necessary to determine 

appropriate counting under the housing 

goals shall be excluded. 

(c) Low-income families housing goal. 

For a Bank that is subject to the housing 

goals, the percentage share of such 

Bank’s total purchases of purchase 

money AMA-approved mortgages on 

owner-occupied single-family housing 

that consists of mortgages for lowincome families shall meet or exceed 

the share of such mortgages in the 

market as defined in paragraph (b) of 

this section. 

(d) Low-income areas housing goal. 

For a Bank that is subject to the housing 

goals, the percentage share of such 

Bank’s total purchases of purchase 

money AMA-approved mortgages on 

owner-occupied single-family housing 

that consists of mortgages for families in 

low-income areas shall meet or exceed 

the share of such mortgages in the 

market as defined in paragraph (b) of 

this section. 

(e) Very low-income families housing 

goal. For a Bank that is subject to the 

housing goals, the percentage share of 

such Bank’s total purchases of purchase 

money AMA-approved mortgages on 

owner-occupied single-family housing 

that consists of mortgages for very lowincome families shall meet or exceed 

the share of such mortgages in the 

market as defined in paragraph (b) of 

this section. 

(f) Refinancing housing goal. For a 

Bank that is subject to the housing goals, 

the percentage share of such Bank’s total 

purchases of refinancing AMAapproved mortgages on owner-occupied 

single-family housing that consists of 

refinancing mortgages for low-income 

families shall meet or exceed the share 

of such mortgages in the market as 

defined in paragraph (b) of this section. 

§ 1281.12 General counting requirements. 

(a) Calculating the numerator and 

denominator for the housing goals. 

Performance under each of the housing 

goals shall be measured using a fraction 


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that is converted into a percentage. 

Neither the numerator nor the 

denominator shall include Bank 

transactions or activities that are not 

AMA-approved mortgage purchases as 

defined by FHFA or that are specifically 

excluded as ineligible under 

§ 1281.13(b). 

(1) The numerator. The numerator of 

each fraction is the number of AMAapproved mortgage purchases of a Bank 

in a particular year that finance owneroccupied single-family properties that 

count toward achievement of a 

particular housing goal. 

(2) The denominator. The 

denominator of each fraction is the total 

number of AMA-approved mortgage 

purchases of a Bank in a particular year 

that finance owner-occupied, singlefamily properties. A separate 

denominator shall be calculated for 

purchase money mortgages and for 

refinancing mortgages. 

(b) Missing data or information for the 

housing goals.—(1) When a Bank lacks 

sufficient data or information to 

determine whether the purchase of a 

mortgage originated after 1992 counts 

toward achievement of a particular 

housing goal, that mortgage purchase 

shall be included in the denominator for 

that housing goal and shall not be 

included in the numerator for that 

housing goal. 

(2) Mortgage purchases financing 

owner-occupied single-family properties 

shall be evaluated based on the income 

of the mortgagors and the area median 

income at the time the mortgage was 

originated. To determine whether 

mortgages may be counted under a 

particular family income level (i.e., lowor very low-income), the income of the 

mortgagors is compared to the median 

income for the area at the time of the 

mortgage application, using the 

appropriate percentage factor provided 

under § 1281.1. 

(c) Credit toward multiple goals. A 

mortgage purchase by a Bank in a 

particular year shall count toward the 

achievement of each housing goal for 

which such purchase qualifies in that 

year. 

(d) Application of median income. 

For purposes of determining an area’s 

median income under § 1281.1, the area 

is: 

(1) The metropolitan area, if the 

property which is the subject of the 

mortgage is in a metropolitan area; and 

(2) In all other areas, the county in 

which the property is located, except 

that where the State nonmetropolitan 

median income is higher than the 

county’s median income, the area is the 

State nonmetropolitan area. 

(e) Sampling not permitted. 

Performance under the housing goals for 

each year shall be based on a complete 

tabulation of mortgage purchases for 

that year; a sampling of such purchases 

is not acceptable. 

(f) Newly available data. When a Bank 

uses data to determine whether a 

mortgage purchase counts toward 

achievement of any housing goal, and 

new data is released after the start of a 

calendar quarter, the Bank need not use 

the new data until the start of the 

following quarter. 

§ 1281.13 Special counting requirements. 

(a) General. FHFA shall determine 

whether a Bank shall receive full, 

partial, or no credit toward achievement 

of any of the housing goals for a 

transaction that otherwise qualifies 

under this part. 

(b) Not counted. The following 

transactions or activities shall not be 

counted for purposes of the housing 

goals and shall not be included in the 

numerator or the denominator in 

calculating a Bank’s performance under 

the housing goals, even if the 

transaction or activity would otherwise 

be counted under paragraph (c) of this 

section: 

(1) Purchases of non-conventional 

single-family mortgages; 

(2) Commitments to buy mortgages at 

a later date or time; 

(3) Options to acquire mortgages; 

(4) Rights of first refusal to acquire 

mortgages; 

(5) Any interests in mortgages that the 

Director determines, in writing, shall 

not be treated as interests in mortgages; 

(6) Mortgage purchases to the extent 

they finance any dwelling units that are 

secondary residences; 

(7) Single-family refinancing 

mortgages that result from conversion of 

balloon notes to fully amortizing notes, 

if a Bank already owns, or has an 

interest in, the balloon note at the time 

conversion occurs; 

(8) Purchases of subordinate lien 

mortgages (second mortgages); 

(9) Purchases of mortgages that were 

previously counted by a Bank under any 

current or previous housing goal within 

the five years immediately preceding 

the current performance year; 

(10) Purchases of mortgages where the 

property has not been approved for 

occupancy; and 

(11) Any combination of factors in 

paragraphs (b)(1) through (b)(10) of this 

section. 

(c) Other special rules. Subject to 

FHFA’s determination of whether a 

Bank shall receive full, partial, or no 

credit for a transaction toward 

achievement of any of the housing goals 

as provided in paragraph (a) of this 

section, the transactions and activities 

identified in this paragraph (c) shall be 

treated as mortgage purchases as 

described. A transaction or activity that 

is covered by more than one paragraph 

below must satisfy the requirements of 

each such paragraph. The mortgages 

from each such transaction or activity 

shall be included in the denominator in 

calculating a Bank’s performance under 

the housing goals, and shall be included 

in the numerator, as appropriate. 

(1) Cooperative housing and 

condominiums. The purchase by a Bank 

of a mortgage on a cooperative housing 

unit (‘‘a share loan’’) or a mortgage on a 

condominium unit shall be treated as a 

mortgage purchase for purposes of the 

housing goals. 

(2) Seasoned mortgages. The purchase 

of a seasoned mortgage by a Bank shall 

be treated as a mortgage purchase for 

purposes of the housing goals, except 

where the Bank has already counted the 

mortgage under any current or previous 

housing goal within the five years 

immediately preceding the current 

performance year. 

(3) Purchase of refinancing mortgages. 

The purchase of a refinancing mortgage 

by a Bank shall be treated as a mortgage 

purchase for purposes of the housing 

goals only if the refinancing is an armslength transaction that is borrowerdriven. 

(d) HOEPA mortgages and mortgages 

with unacceptable terms or conditions. 

The purchase by a Bank of HOEPA 

mortgages and mortgages with 

unacceptable terms or conditions, as 

defined in § 1281.1, shall be treated as 

mortgage purchases for purposes of the 

housing goals and shall be included in 

the denominator for each applicable 

housing goal, but such mortgages shall 

not be counted in the numerator for any 

housing goal. 

(e) FHFA review of transactions. 

FHFA may determine whether and how 

any transaction or class of transactions 

shall be counted for purposes of the 

housing goals. FHFA will notify each 

Bank in writing of any determination 

regarding the treatment of any 

transaction or class of transactions 

under the housing goals. 

§ 1281.14 Determination of compliance 

with housing goals; notice of determination. 

(a) Determination of compliance with 

housing goals. On an annual basis, the 

Director shall determine whether each 

Bank has exceeded the volume 

threshold. For each Bank that has 

exceeded the volume threshold in a 

year, the Director shall determine the 

Bank’s performance under each housing 

goal. 


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Federal Register / Vol. 75, No. 247 / Monday, December 27, 2010 / Rules and Regulations 81109 

(b) Failure to meet a housing goal. If 

the Director determines that a Bank has 

failed to meet any housing goal, the 

Director shall notify the Bank in writing 

of such preliminary determination. Any 

notification to a Bank of a preliminary 

determination under this section shall 

provide the Bank with an opportunity to 

respond in writing in accordance with 

the following procedures: 

(1) Notice. The Director shall provide 

written notice to a Bank of a preliminary 

determination under this section, the 

reasons for such determination, and the 

information on which the Director based 

the determination. 

(2) Response period.—(i) In general. 

During the 30-day period beginning on 

the date on which notice is provided 

under paragraph (b)(1) of this section, 

the Bank may submit to the Director any 

written information that the Bank 

considers appropriate for consideration 

by the Director in finally determining 

whether such failure has occurred or 

whether the achievement of such goal 

was feasible. 

(ii) Extended period. The Director 

may extend the period under paragraph 

(b)(2)(i) of this section for good cause for 

not more than 30 additional days. 

(iii) Shortened period. The Director 

may shorten the period under paragraph 

(b)(2)(i) of this section for good cause. 

(iv) Failure to respond. The failure of 

a Bank to provide information during 

the 30-day period under this paragraph 

(b)(2), as extended or shortened, shall 

waive any right of the Bank to comment 

on the proposed determination or action 

of the Director. 

(3) Consideration of information and 

final determination. (i) In general. After 

the expiration of the response period 

under paragraph (b)(2) of this section or 

receipt of information provided during 

such period by a Bank, the Director 

shall issue a final determination on: 

(A) Whether the Bank has failed to 

meet the housing goal; and 

(B) Whether, taking into consideration 

market and economic conditions and 

the financial condition of the Bank, the 

achievement of the housing goal was 

feasible. 

(ii) Considerations. In making a final 

determination under paragraph (b)(3)(i) 

of this section, the Director shall take 

into consideration any relevant 

information submitted by a Bank during 

the response period. 

§ 1281.15 Housing plans. 

(a) Housing plan requirement. If the 

Director determines that a Bank has 

failed to meet any housing goal and that 

the achievement of the housing goal was 

feasible, the Director may require the 

Bank to submit a housing plan for 

approval by the Director. 

(b) Nature of plan. If the Director 

requires a housing plan, the housing 

plan shall: 

(1) Be feasible; 

(2) Be sufficiently specific to enable 

the Director to monitor compliance 

periodically; 

(3) Describe the specific actions that 

the Bank will take to achieve the 

housing goal for the next calendar year; 

and 

(4) Address any additional matters 

relevant to the plan as required, in 

writing, by the Director. 

(c) Deadline for submission. The Bank 

shall submit the housing plan to the 

Director within 45 days after issuance of 

a notice requiring the Bank to submit a 

housing plan. The Director may extend 

the deadline for submission of a plan, in 

writing and for a time certain, to the 

extent the Director determines an 

extension is necessary. 

(d) Review of housing plan. The 

Director shall review and approve or 

disapprove a housing plan as follows: 

(1) Approval. The Director shall 

review each submission by a Bank, 

including a housing plan submitted 

under this section and, not later than 30 

days after submission, approve or 

disapprove the plan or other action. The 

Director may extend the period for 

approval or disapproval for a single 

additional 30-day period if the Director 

determines it necessary. The Director 

shall approve any plan that the Director 

determines is likely to succeed, and 

conforms with the Bank Act, this part, 

and any other applicable provision of 

law. 

(2) Notice of approval and 

disapproval. The Director shall provide 

written notice to a Bank submitting a 

housing plan of the approval or 

disapproval of the plan, which shall 

include the reasons for any disapproval 

of the plan, and of any extension of the 

period for approval or disapproval. 

(e) Resubmission. If the Director 

disapproves an initial housing plan 

submitted by a Bank, the Bank shall 

submit an amended plan acceptable to 

the Director not later than 15 days after 

the Director’s disapproval of the initial 

plan; the Director may extend the 

deadline if the Director determines an 

extension is in the public interest. If the 

amended plan is not acceptable to the 

Director, the Director may afford the 

Bank 15 days to submit a new plan. 

(f) Enforcement of housing plan. If the 

Director finds that a Bank has failed to 

meet any housing goal, and that the 

achievement of the housing goal was 

feasible, and has required the Bank to 

submit a housing plan under this 

section, the Director may issue a cease 

and desist order, or impose civil money 

penalties, if the Bank refuses to submit 

such a plan, fails to submit an 

acceptable plan, or fails to comply with 

the approved plan. In taking such 

action, the Director shall follow 

procedures consistent with those 

provided in 12 U.S.C. 4581 through 

4588 with respect to actions to enforce 

the housing goals. 

Subpart C—Reporting Requirements 

§ 1281.20 General. 

This subpart establishes data 

submission and reporting requirements 

to provide the Director with mortgage 

and other information relating to the 

Banks’ performance in connection with 

the housing goals, as supplemented 

from time to time in the Banks’ Data 

Reporting Manual (DRM). 

§ 1281.21 Mortgage Reports. 

(a) Loan-level data elements. To 

implement the data collection and 

submission requirements for mortgage 

data, and to assist the Director in 

monitoring the Banks’ housing goal 

activities, each Bank shall collect and 

compile computerized loan-level data 

on each AMA-approved mortgage 

purchase, as described in the DRM. The 

Director may, from time to time, issue 

a list in the DRM specifying the loanlevel data elements to be collected and 

maintained by the Banks and provided 

to the Director. The Director may revise 

the DRM list by written notice to the 

Banks. 

(b) Semi-annual Mortgage Reports. 

Each Bank shall submit to the Director, 

on a semi-annual basis, a Mortgage 

Report. The second semi-annual 

Mortgage Report each year shall serve as 

the annual Mortgage Report and shall be 

designated as such. Each Mortgage 

Report shall include: 

(1) Aggregations of the loan-level 

mortgage data compiled by each Bank 

under paragraph (a) of this section for 

year-to-date AMA-approved mortgage 

purchases, in the format specified in 

writing by the Director; 

(2) Year-to-date dollar volume, 

number of units, and number of AMAapproved mortgages on owner-occupied 

properties purchased by each Bank that 

do, and do not, qualify under each 

housing goal as set forth in this part; 

and 

(3) Year-to-date computerized loanlevel data consisting of the data 

elements required under paragraph (a) 

of this section. 

(c) Timing of Reports. Each Bank shall 

submit its first semi-annual Mortgage 

Report within 45 days of the end of the 


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81110 Federal Register / Vol. 75, No. 247 / Monday, December 27, 2010 / Rules and Regulations 

second quarter. Each Bank shall submit 

its annual Mortgage Report within 60 

days after the end of the calendar year. 

(d) Revisions to Reports. At any time 

before submission of its annual 

Mortgage Report, a Bank may revise its 

first semi-annual Mortgage Report for 

that year. 

(e) Format. The Banks shall submit to 

the Director computerized loan-level 

data with the Mortgage Report, in the 

format specified in writing by the 

Director. 

§ 1281.22 Periodic reports. 

Each Bank shall provide to the 

Director such reports, information and 

data as the Director may request from 

time to time, or as may be supplemented 

in the DRM. 

§ 1281.23 Bank data integrity. 

(a) Certification. (1) The senior officer 

of each Bank who is responsible for 

submitting the annual Mortgage Report, 

or for submitting any other report(s), 

data or other information for which 

certification is requested in writing by 

the Director, shall certify such report(s), 

data or information. 

(2) The certification shall state as 

follows: ‘‘To the best of my knowledge 

and belief, the information provided 

herein is true, correct and complete.’’ 

(b) Adjustment to correct errors, 

omissions or discrepancies. FHFA shall 

determine on an annual basis the 

official housing goals performance 

figures for a Bank that is subject to the 

housing goals. FHFA may resolve any 

error, omission or discrepancy by 

adjusting the Bank’s official housing 

goals performance figure. If the Director 

determines that the year-end data 

reported by a Bank for a year preceding 

the latest year for which data on 

housing goals performance was reported 

to FHFA contained a material error, 

omission or discrepancy, the Director 

may increase the corresponding housing 

goal for the current year by the number 

of mortgages that the Director 

determines were overstated in the prior 

year’s goal performance. 

Dated: December 20, 2010. 

Edward J. DeMarco, 

Acting Director, Federal Housing Finance 

Agency. 

[FR Doc. 2010–32350 Filed 12–23–10; 8:45 am] 

BILLING CODE 8070–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 71 

[Docket No. FAA–2010–0354 Airspace 

Docket No. 10–AAL–10] 

Establishment of Class E Airspace; 

Port Clarence, AK 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule; correction. 

SUMMARY: This action corrects errors in 

the legal description and airport 

coordinates for Port Clarence Coast 

Guard Station (CGS) Airport, Port 

Clarence, AK, contained in a final rule 

that was published in the Federal 

Register. 

DATES: Effective date 0901 UTC, January 

13, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Martha Dunn, AAL–538G, Federal 

Aviation Administration, 222 West 7th 

Avenue, Box 14, Anchorage, AK 99513– 

7587; telephone number (907) 271– 

5898; fax: (907) 271–2850; e-mail: 

Martha.ctr.Dunn@faa.gov. Internet 

address: http://www.faa.gov/about/

office_org/headquarters_offices/

ato.service_units/systemops/fs/alaskan/ 

rulemaking/. 

SUPPLEMENTARY INFORMATION: 

History 

Federal Register Document FAA– 

2010–0354, Airspace Docket No. 

10–AAL–10, published on Tuesday, 

October 12, 2010 [75 FR 62457] 

establishes Class E airspace at Port 

Clarence CGS Airport, Port Clarence, 

AK. The airspace description referred to 

the Anchorage Arctic CTA/FIR 

boundary as a limitation of the western 

boundary of the Class E airspace area. 

This reference is in error and is 

corrected by substituting the actual 

coordinates of the boundary. The airport 

reference point coordinates also 

contained an error caused by rounding. 

This action corrects that error. The 

correct full legal description is provided 

below. 

Correction to Final Rule 

■ Accordingly, pursuant to the authority 

delegated to me, the Class E airspace 

legal description for Port Clarence CGS 

Airport, published in the Federal 

Register, Tuesday, October 12, 2010 

(75 FR 62457), FR Doc 2010–25479, 

page 62458, column 2 is corrected as 

follows: 

AAL AK E5 Port Clarence, AK [Corrected] 

Port Clarence, CGS Airport, AK 

(Lat. 65°15′12′′ N., Long. 166°51′27′′ W.) 

That airspace extending upward from 700 

feet above the surface within a 6.4-mile 

radius of the Port Clarence CGS Airport, AK 

and within 1.5 miles either side of the 180° 

bearing from the Port Clarence CGS Airport, 

extending from the 6.4-mile radius to 13.2 

miles south of the Port Clarence CGS Airport; 

and that airspace extending upward from 

1,200 feet above the surface within a 73 mile 

radius of the Port Clarence CGS Airport, AK, 

excluding that portion extending west of a 

line from Lat. 64°48′20′′ N., Long. 169°31′27′′ 

W., to Lat. 60°00′00′′ N., Long. 168°58′23′′ W., 

to Lat. 66°05′44′′ N., Long. 168°58′23′′ W. 

Issued in Anchorage, AK, on December 13, 

2010. 

James M. Miller, 

Acting Manager, Alaska Flight Services 

Information Area Group. 

[FR Doc. 2010–32293 Filed 12–23–10; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

15 CFR Part 950 

[Docket No. 090113018–9019–01] 

RIN 0648–AX74 

Schedule of Fees for Access to NOAA 

Environmental Data, Information, and 

Related Products and Services 

AGENCY: National Environmental 

Satellite, Data and Information Service 

(NESDIS), National Oceanic and 

Atmospheric Administration (NOAA), 

Department of Commerce. 

ACTION: Final rule. 

SUMMARY: In this final rule, NESDIS 

establishes a new schedule of fees for 

the sale of its data, information, and 

related products and services to users. 

NESDIS is revising the fee schedule to 

ensure that the fees accurately reflect 

the costs of providing access to the 

environmental data, information, and 

related products and services. NESDIS 

is authorized under 15 U.S.C. 1534 to 

assess fees, up to fair market value, for 

access to environmental data, 

information, and products derived from, 

collected, and/or archived by NOAA. 

Other than depreciation, costs to 

upgrade computer hardware and 

software systems will not be included in 

the fees charged to users. 

DATES: Effective Date: February 28, 

2011. 

FOR FURTHER INFORMATION CONTACT: 

Angel Robinson (301) 713–9230 ext 186. 

SUPPLEMENTARY INFORMATION: 


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