This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

47398 

Vol. 86, No. 162 

Wednesday, August 25, 2021 

1See 12 U.S.C. 4561(a). 

2See 12 U.S.C. 4501(7). 

3See 12 CFR part 1282. 

4See 85 FR 82881 (Dec. 21, 2020). Prior to the 

rule establishing housing goals for 2021, the most 

recent rule establishing Enterprise housing goals 

applied to years 2018 through 2020. See 83 FR 5878 

(Feb. 12, 2018). The 2020 final rule extended the 

housing goals benchmark levels applicable to 2018– 

2020 through 2021 only, a departure from historical 

FHFA practice of establishing goals at three-year 

intervals. As stated in the preamble to the 2020 

final rule, this choice was motivated by the unique 

FEDERAL HOUSING FINANCE 

AGENCY 

12 CFR Part 1282 

RIN 2590–AB12 

2022–2024 Enterprise Housing Goals 

AGENCY: Federal Housing Finance 

Agency. 

ACTION: Proposed rule. 

SUMMARY: The Federal Housing Finance 

Agency (FHFA) is issuing a proposed 

rule with request for comments on the 

housing goals for Fannie Mae and 

Freddie Mac (the Enterprises) for 2022 

through 2024. The Federal Housing 

Enterprises Financial Safety and 

Soundness Act of 1992 (the Safety and 

Soundness Act) requires FHFA to 

establish annual housing goals for 

mortgages purchased by the Enterprises. 

The housing goals include separate 

categories for single-family and 

multifamily mortgages on housing that 

is affordable to low-income and very 

low-income families, among other 

categories. The existing housing goals 

for the Enterprises include benchmark 

levels through the end of 2021. This 

proposed rule would establish new 

benchmark levels for the housing goals 

and subgoals for 2022 through 2024. 

The proposed rule would also replace 

the low-income areas subgoal with 

separate area-based subgoals targeting 

the individual components of the lowincome areas subgoal (minority census 

tracts and low-income census tracts). 

Finally, the proposed rule would make 

several technical changes to definitions 

and other provisions to conform the 

regulation to existing practice. 

DATES: FHFA will accept written 

comments on the proposed rule on or 

before October 25, 2021. 

ADDRESSES: You may submit your 

comments on the proposed rule, 

identified by regulatory information 

number (RIN) 2590–AB12, by any one of 

the following methods: 

• Agency Website: www.fhfa.gov/ 

open-for-comment-or-input. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. If 

you submit your comment to the 

Federal eRulemaking Portal, please also 

send it by email to FHFA at 

RegComments@fhfa.gov to ensure 

timely receipt by FHFA. Include the 

following information in the subject line 

of your submission: Comments/RIN 

2590–AB12. 

• Hand Delivered/Courier: The hand 

delivery address is: Clinton Jones, 

General Counsel, Attention: Comments/ 

RIN 2590–AB12, Federal Housing 

Finance Agency, 400 Seventh Street 

SW, Washington, DC 20219. Deliver the 

package at the Seventh Street entrance 

Guard Desk, First Floor, on business 

days between 9 a.m. and 5 p.m. 

• U.S. Mail, United Parcel Service, 

Federal Express, or Other Mail Service: 

The mailing address for comments is: 

Clinton Jones, General Counsel, 

Attention: Comments/RIN 2590–AB12, 

Federal Housing Finance Agency, 400 

Seventh Street SW, Washington, DC 

20219. Please note that all mail sent to 

FHFA via U.S. Mail is routed through a 

national irradiation facility, a process 

that may delay delivery by 

approximately two weeks. 

FOR FURTHER INFORMATION CONTACT: Ted 

Wartell, Associate Director, Housing & 

Community Investment, Division of 

Housing Mission and Goals, (202) 649– 

3157, Ted.Wartell@fhfa.gov; Padmasini 

Raman, Supervisory Policy Analyst, 

Housing & Community Investment, 

Division of Housing Mission and Goals, 

(202) 649–3633, Padmasini.Raman@

fhfa.gov; Kevin Sheehan, Associate 

General Counsel, Office of General 

Counsel, (202) 649–3086, 

Kevin.Sheehan@fhfa.gov; or Marshall 

Adam Pecsek, Assistant General 

Counsel, (202) 649–3380, 

Marshall.Pecsek@fhfa.gov. These are not 

toll-free numbers. The mailing address 

is: Federal Housing Finance Agency, 

400 Seventh Street SW, Washington, DC 

20219. The telephone number for the 

Telecommunications Device for the Deaf 

is (800) 877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Comments 

FHFA invites comments on all aspects 

of the proposed rule and will take all 

comments germane to the proposed rule 

into consideration before issuing a final 

rule. Copies of all such comments will 

be posted without change, including 

any personal information you provide 

such as your name, address, email 

address, and telephone number, on 

FHFA’s public website at http://

www.fhfa.gov. In addition, copies of all 

such comments received will be 

available for examination by the public 

through the electronic rulemaking 

docket for this proposed rule also 

located on the FHFA website. 

Commenters are encouraged to review 

and comment on all aspects of the 

proposed rule, including the proposed 

single-family housing goals and 

subgoals benchmark levels, the 

proposed multifamily housing goals 

benchmark levels, and the other 

proposed changes to the regulation. 

II. Background 

A. Statutory and Regulatory Background 

for the Existing Housing Goals 

The Safety and Soundness Act 

requires FHFA to establish several 

annual housing goals for both singlefamily and multifamily mortgages 

purchased by the Enterprises.1 The 

annual housing goals are one measure of 

the extent to which the Enterprises are 

meeting their public purposes, which 

include ‘‘an affirmative obligation to 

facilitate the financing of affordable 

housing for low- and moderate-income 

families in a manner consistent with 

their overall public purposes, while 

maintaining a strong financial condition 

and a reasonable economic return.’’ 2

Since 2010, FHFA has established 

annual housing goals for Enterprise 

purchases of single-family and 

multifamily mortgages consistent with 

the requirements of the Safety and 

Soundness Act. The structure of the 

housing goals and the rules for 

determining how mortgage purchases 

are counted or not counted are defined 

in the housing goals regulation.3 The 

most recent rule established benchmark 

levels for the housing goals for 2021.4


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market conditions created by the COVID–19 

pandemic. 85 FR at 82881 (‘‘Due to the severe 

nature of the COVID–19 pandemic and associated 

economic uncertainty, FHFA is establishing 

benchmark levels for the Enterprise single-family 

and multifamily housing goals for calendar year 

2021 only.’’) 5 12 U.S.C. 4562(a)(1). 

6 12 U.S.C. 4502(28). 

7 12 U.S.C. 4502(28); 12 CFR 1282.1 (par. (i) of 

definition of ‘‘families in low-income areas’’). 8 12 U.S.C. 4502(29); 12 CFR 1281.1 (par. (ii) of 

definition of ‘‘families in low-income areas’’ and 

definition of ‘‘minority census tract’’). 

9 12 U.S.C. 4502(28); 12 CFR 1281.1 (definition of 

‘‘designated disaster area’’ and par. (iii) of 

definition of ‘‘families in low-income areas’’). 

10 12 CFR 1282.12(f). 11See 12 U.S.C. 4562(e). 

12See 12 U.S.C. 4563(c). This affordability 

definition is sometimes referred to as the ‘‘Brooke 

Amendment,’’ which states that to be affordable at 

the 80 percent of AMI level, the rents must not 

exceed 30 percent of the renter’s income which 

must not exceed 80 percent of AMI. See https://

www.huduser.gov/portal/pdredge/pdr_edge_featd_

article_092214.html for a description of the Brooke 

Amendment and background on the notion of 

affordability embedded in the housing goals. 

This proposed rule would establish 

benchmark levels for 2022–2024. 

Single-family goals. The single-family 

goals defined under the Safety and 

Soundness Act include separate 

categories for home purchase mortgages 

for low-income families, very lowincome families, and families that reside 

in low-income areas.5 The Safety and 

Soundness Act defines ‘‘low-income 

area’’ 6 to include: (1) Families in lowincome census tracts, defined as census 

tracts with median income less than or 

equal to 80 percent of area median 

income (AMI); 7 (2) families with 

incomes less than or equal to AMI who 

reside in minority census tracts (defined 

as census tracts with a minority 

population of at least 30 percent and a 

tract median income of less than 100 

percent of AMI); 8 and (3) families with 

incomes less than or equal to 100 

percent of AMI who reside in 

designated disaster areas.9 The 

Enterprise housing goals regulation also 

includes a subgoal, within the lowincome areas goal, that is limited to 

families in low-income census tracts 

and moderate-income families in 

minority census tracts.10 FHFA is 

proposing a change to the structure of 

the low-income areas subgoal, as further 

discussed in Section III.A. below. 

Performance on the single-family home 

purchase goals is measured as the 

percentage of the total home purchase 

mortgages purchased by an Enterprise 

each year that qualify for each goal or 

subgoal. There is also a separate goal for 

refinancing mortgages for low-income 

families, and performance on the 

refinancing goal is determined in a 

similar way. 

Under the Safety and Soundness Act, 

the single-family housing goals are 

limited to mortgages on owner-occupied 

housing with one to four units total. The 

single-family goals cover conventional, 

conforming mortgages, defined as 

mortgages that are not insured or 

guaranteed by the Federal Housing 

Administration or another government 

agency and with principal balances that 

do not exceed the conforming loan 

limits for Enterprise mortgages. 

Two-part evaluation approach. The 

performance of the Enterprises on the 

housing goals is evaluated using a twopart approach, comparing the goalqualifying share of the Enterprise’s 

mortgage purchases to two separate 

measures: A benchmark level and a 

market level. In order to meet a singlefamily housing goal, the percentage of 

mortgage purchases by an Enterprise 

that meet each goal must equal or 

exceed either the benchmark level or the 

market level for that year. The 

benchmark level is set prospectively by 

rulemaking based on various factors set 

forth in the Safety and Soundness Act.11

The market level is determined 

retrospectively for each year, based on 

the actual goal-qualifying share of the 

overall market as measured by the Home 

Mortgage Disclosure Act (HMDA) data 

for that year. The overall market that 

FHFA uses for setting both the 

prospective benchmark level and the 

retrospective market level consists of all 

single-family owner-occupied 

conventional conforming mortgages that 

would be eligible for purchase by either 

Enterprise. It includes loans purchased 

by the Enterprises as well as comparable 

loans held in a lender’s portfolio. It also 

includes any loans that are part of a 

private label security (PLS), although 

very few such securities have been 

issued for conventional conforming 

mortgages since 2008. 

While both the benchmark level and 

the retrospective market level are 

designed to measure the current year’s 

mortgage originations, the performance 

of the Enterprises on the housing goals 

includes all Enterprise purchases in that 

year, regardless of the year in which the 

loan was originated. This includes 

providing housing goals credit when the 

Enterprises acquire qualified seasoned 

loans. (Seasoned loans are loans that 

were originated in prior years and 

acquired by the Enterprise in the current 

year.) 

Multifamily goals. The multifamily 

goals defined under the Safety and 

Soundness Act include categories for 

mortgages on multifamily properties 

(properties with five or more units) with 

rental units affordable to low-income 

families and mortgages on multifamily 

properties with rental units affordable to 

very low-income families. The 

Enterprise housing goals regulation also 

includes a small multifamily lowincome subgoal for properties with 5–50 

units. The multifamily housing goals 

include all Enterprise multifamily 

mortgage purchases, regardless of the 

purpose of the loan. The multifamily 

goals evaluate the performance of the 

Enterprises based on numeric targets, 

not percentages, for the number of 

affordable units in properties backed by 

mortgages purchased by an Enterprise. 

The Enterprise housing goals regulation 

does not include a retrospective market 

level measure for the multifamily goals, 

due in part to a lack of comprehensive 

data about the multifamily market. As a 

result, FHFA currently measures 

Enterprise multifamily goals 

performance against the benchmark 

levels only. 

The Safety and Soundness Act 

requires that affordability for rental 

units under the multifamily goals be 

determined based on rents that ‘‘[do] not 

exceed 30 percent of the maximum 

income level of such income category, 

with appropriate adjustments for unit 

size as measured by the number of 

bedrooms.’’ 12 The Enterprise housing 

goals regulation considers the net rent 

paid by the renter and, therefore, nets 

out any subsidy payments that the 

renter may receive, including housing 

assistance payments. 

B. Adjusting the Housing Goals 

If, after publication of the final rule 

establishing the housing goals for 2022– 

2024, FHFA determines that any of the 

single-family or multifamily housing 

goals should be adjusted in light of 

market conditions, to ensure the safety 

and soundness of the Enterprises, or for 

any other reason, FHFA will take any 

steps that are necessary and appropriate 

to adjust that goal such as reducing the 

benchmark level through the processes 

in the existing regulation. FHFA may 

take other actions consistent with the 

Safety and Soundness Act and the 

Enterprise housing goals regulation 

based on new information or 

developments that occur after 

publication of the final rule. 

For example, under the Safety and 

Soundness Act and the Enterprise 

housing goals regulation, FHFA may 

reduce the benchmark levels in 

response to an Enterprise petition for 

reduction for any of the single-family or 

multifamily housing goals in a 

particular year based on a determination 

by FHFA that: (1) Market and economic 

conditions or the financial condition of 

the Enterprise require a reduction; or (2) 


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13See 12 CFR 1282.14(d). 14See 12 CFR 1282.21(a); 12 U.S.C. 4566(b). 

efforts to meet the goal or subgoal would 

result in the constraint of liquidity, 

over-investment in certain market 

segments, or other consequences 

contrary to the intent of the Safety and 

Soundness Act or the purposes of the 

Enterprises’ charter acts.13

The Safety and Soundness Act and 

the Enterprise housing goals regulation 

also take into account the possibility 

that achievement of a particular housing 

goal may or may not have been feasible 

for an Enterprise to achieve. If FHFA 

determines that a housing goal was not 

feasible for an Enterprise to achieve, 

then the statute and regulation provide 

for no further enforcement of that 

housing goal for that year.14

If FHFA determines that an Enterprise 

failed to meet a housing goal and that 

achievement of the housing goal was 

feasible, then the statute and regulation 

provide FHFA with discretionary 

authority to require the Enterprise to 

submit a housing plan describing the 

specific actions the Enterprise will take 

to improve its housing goals 

performance. 

C. Housing Goals Under 

Conservatorship 

On September 6, 2008, FHFA placed 

each Enterprise into conservatorship. 

Although the Enterprises remain in 

conservatorship at this time, they 

continue to have the mission of 

supporting a stable and liquid national 

market for residential mortgage 

financing. FHFA has continued to 

establish annual housing goals for the 

Enterprises and to assess their 

performance under the housing goals 

each year during conservatorship. 

III. Summary of Proposed Rule 

A. Benchmark Levels for the SingleFamily Housing Goals 

This proposed rule would establish 

the benchmark levels for the existing 

single-family housing goals for 2022– 

2024 as follows: 

Goal Criteria 

Current 

benchmark 

level for 

2021 

(percent) 

Proposed 

benchmark 

level for 

2022–2024 

(percent) 

Low-Income Home Purchase Goal ............. Home purchase mortgages on single-family, owner-occupied 

properties, to borrowers with incomes no greater than 80 of 

area median income (AMI).

24 28 

Very Low-Income Home Purchase Goal .... Home purchase mortgages on single-family, owner-occupied 

properties, to borrowers with incomes no greater than 50 of 

AMI.

6 7 

Low-Income Refinancing Goal .................... Refinancing mortgages on single-family, owner-occupied properties, to borrowers with incomes no greater than 80 of AMI.21 26 

The proposed rule would replace the 

existing low-income areas subgoal with 

two new area-based subgoals and 

corresponding benchmark levels. 

Implementation of the two new subgoals 

would modify the methodology for 

measuring the Enterprises’ performance 

in these areas. The first of the proposed 

subgoals would establish a benchmark 

level for Enterprise purchases of 

mortgage loans on properties in 

minority census tracts, made to 

borrowers with incomes no greater than 

100 percent of AMI. The second of the 

proposed subgoals would establish a 

benchmark level for Enterprise 

purchases of (i) mortgage loans on 

properties in low-income census tracts 

that are not minority census tracts, as 

well as (ii) mortgage loans on properties 

in low-income census tracts that are 

minority census tracts, made to families 

with incomes greater than 100 percent 

of AMI. The proposed rule would 

establish the new subgoal benchmark 

levels for 2022–2024 as follows: 

Subgoal Criteria 

Proposed 

benchmark 

level for 

2022–2024 

(percent) 

Minority Census Tracts Subgoal ............................ Home purchase mortgages on single-family, owner-occupied properties to 

borrowers with income no greater than 100 percent of AMI in minority 

census tracts.1

10 

Low-Income Census Tracts Subgoal ..................... (i) Home purchase mortgages on single-family, owner-occupied properties 

to borrowers (regardless of income) in low-income census tracts2 that 

are not minority census tracts, and (ii) home purchase mortgages on single-family, owner-occupied properties to borrowers with incomes greater 

than 100 percent of AMI in low-income census tracts that are also minority census tracts. 

4 

1 Census tracts that have a minority population of at least 30 percent and a median income of less than 100 percent of AMI. 

2 Census tracts where the median income is no greater than 80 percent of AMI. 

In addition, FHFA will continue to 

establish by notice to the Enterprises an 

annual benchmark level for the lowincome areas housing goal that takes 

into account loans from disaster areas. 

The proposed rule would make one 

clarifying change to the definition of 

‘‘designated disaster area,’’ as described 

below. 

B. Proposed Benchmark Levels for the 

Multifamily Housing Goals 

The proposed rule would establish 

the benchmark levels for the 


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15See 85 FR 82965 (Dec. 21, 2020). 

16See https://www.fhfa.gov/Videos/Pages/FHFAPublic-Listening-Session-Enterprise-Housing-GoalsANPR.aspx. 

17Note that loans to borrowers with incomes over 

100 percent of AMI do not qualify for the minority 

areas component of the subgoal. 

multifamily goal and subgoals for 2022– 

2024 as follows: 

Goal Criteria 

Current 

benchmark 

level for 

2021 

(units) 

Proposed 

benchmark 

level for 

2022–2024 

(units) 

Low-Income Goal ........................................ affordable to families with incomes no greater than 80 percent of 

AMI in multifamily rental properties with mortgages purchased 

by an Enterprise.

315,000 415,000 

Very Low-Income Subgoal .......................... affordable to families with incomes no greater than 50 percent of 

AMI in multifamily rental properties with mortgages purchased 

by an Enterprise.

60,000 88,000 

Small Multifamily Low-Income Subgoal ...... affordable to families with incomes no greater than 80 percent of 

AMI in small multifamily rental properties (5 to 50 ) with mortgages purchased by an Enterprise.

10,000 23,000 

C. Other Proposed Changes 

The proposed rule would make minor 

technical changes to some regulatory 

definitions and counting rules. These 

changes would be non-substantive 

changes intended to conform the 

regulation to existing FHFA practices in 

measuring the performance of the 

Enterprises under the housing goals. 

D. Summary of Responses to the ANPR 

and Public Listening Session 

In December 2020, FHFA published 

an Advance Notice of Proposed 

Rulemaking (ANPR) requesting public 

comment on several questions related to 

potential changes to the Enterprise 

housing goals regulation.15 FHFA 

invited comments in the ANPR on four 

specific questions identified below, as 

well as on any other issues that 

commenters thought should be 

addressed as part of the rulemaking to 

establish the housing goals benchmark 

levels for 2022 and beyond. 

FHFA also held a public listening 

session in March 2021 to solicit 

additional input on the Enterprise 

housing goals regulation. FHFA 

received 16 letters in response to the 

ANPR and heard from 12 external 

speakers during the listening session. 

The comments provided through the 

letters and by the speakers addressed a 

range of topics related to the Enterprise 

housing goals and access to mortgages 

for low-income borrowers. FHFA 

appreciates the time and effort that 

commenters put into responses and has 

incorporated elements of the feedback 

received into the proposed rule. Some of 

the topics raised in the comments 

require further research or analysis, and 

FHFA may consider these issues in 

future rulemaking cycles. A summary of 

the comments received is included 

below. All comments received, as well 

as the transcript of the public listening 

session, are available at FHFA’s 

website.16

Question 1: Are there categories of 

loans that should be excluded from 

receiving housing goals credit under the 

Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 

(Safety and Soundness Act) provisions 

on ‘‘unacceptable business and lending 

practices’’? 

Numerous commenters opposed 

excluding loans from receiving housing 

goals credit because of certain credit or 

underwriting features like loan-to-value 

or debt-to-income ratios. Several 

commenters stressed their belief that 

loans that meet safety and soundness 

standards and are eligible for purchase 

by the Enterprises should be eligible for 

housing goals credit. In addition, many 

of the commenters argued that loans 

that are eligible for Qualified Mortgage 

(QM) status should also be eligible for 

housing goals credit. Two commenters 

stressed that FHFA should not exclude 

particular categories of loans from 

receiving housing goals credit unless the 

performance of the loan products is 

unsustainable. Other commenters 

supported excluding certain loans from 

receiving housing goals credit. For 

example, one commenter argued that 

mortgages with loan-level pricing 

adjustments should not receive credit. 

Another commenter recommended that 

FHFA require the Enterprises to use a 

historical mortgage default rate matrix 

to limit certain types of acquisitions. 

Several commenters expressed 

concerns about the January 2021 

amendments to the Senior Preferred 

Stock Purchase Agreements between the 

Enterprises and the U.S. Department of 

the Treasury (PSPAs), which place new 

limits on risk-layering in loans eligible 

for purchase by the Enterprises. The 

commenters stressed the potential 

negative impact the amendments to the 

PSPAs could have on communities and 

borrowers of color and encouraged 

FHFA to evaluate the effect of the new 

restrictions on the housing goals. The 

commenters also requested that FHFA 

provide more data on the impact of the 

housing goals by income and race or 

ethnicity in light of the changes to the 

PSPAs. One commenter requested that 

FHFA conduct annual evaluations of 

how its policies, including the PSPAs, 

impact the ability of the Enterprises to 

meet the housing goals and satisfy their 

charter missions. Several commenters 

raised concerns about the Enterprises’ 

ability to meet the housing goals in light 

of FHFA’s recently adopted capital 

regulation, which they believe will 

increase mortgage costs and, in turn, 

decrease access to mortgage credit for 

lower-income or lower-wealth 

borrowers and borrowers of color. 

Question 2: Are there ways to 

determine whether the low-income areas 

home purchase subgoal has resulted in 

the displacement of residents from 

certain communities, or to measure the 

extent of any such displacement? 

Should FHFA consider modifying the 

low-income areas home purchase 

subgoal to address such concerns? If so, 

how? 

FHFA provided an analysis of 

whether the low-income areas home 

purchase subgoal has resulted in the 

displacement of residents from certain 

communities in the ANPR based on 

HMDA data. The data showed that both 

low-income areas and high-minority 

areas have increasing shares of 

borrowers with incomes at or above 100 

percent of AMI.17 The data also showed 

that the share of loans made to 

borrowers with incomes greater than 

100 percent of AMI and residing in lowincome census tracts increased from 


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40.7 percent in 2010 to 42.8 percent in 

2016, but declined to a low of 37 

percent in 2019. Numerous commenters 

broadly agreed with the description of 

trends provided in the ANPR and 

encouraged FHFA to continue to 

provide data on this issue. A few 

commenters requested that FHFA 

provide additional data pertaining to the 

race and ethnicity of borrowers for loans 

that meet this subgoal. Two commenters 

recommended that FHFA analyze 

Census Bureau data over the next five 

years in an effort to determine if 

displacement is occurring in certain 

communities. Another commenter 

recommended that FHFA, in 

coordination with other regulators, 

monitor home sales prices, resident 

incomes, and other data to determine 

the impact of the subgoal. 

Although one commenter 

recommended leaving the subgoal in its 

current form, citing its benefits to 

socioeconomic diversity, several 

commenters expressed concern about 

the Enterprises receiving housing goals 

credit for loans to borrowers who meet 

no standard other than living in a lowincome area. A number of commenters 

recommended that FHFA continue to 

monitor and analyze trends regarding 

whether the low-income areas home 

purchase subgoal has resulted in the 

displacement of residents. Other 

commenters suggested revising the 

subgoal to ensure that FHFA allows 

housing goals credit only for loans to 

borrowers at or below 80 percent of 

AMI. One commenter explicitly stated 

that the housing goals targets should be 

based only on income, not geography. 

Another commenter recommended 

allowing only a certain percentage of 

loans above 80 percent of AMI to qualify 

for the subgoal and encouraged FHFA to 

analyze the potential impact of different 

caps (i.e., 100 or 125 percent of AMI). 

Question 3: Should FHFA revise the 

low-income areas home purchase 

subgoal to consider loans on properties 

located in Opportunity Zones, and if so, 

how should such loans be treated? 

Some commenters supported the idea 

of the Enterprises receiving housing 

goals credit for Opportunity Zone loans 

for low-income borrowers. For example, 

one commenter favored providing 

housing goals credit for loans in 

Opportunity Zones as a way to help 

encourage affordable housing 

investment but did not support giving 

the Enterprises extra or double credit for 

loans in Opportunity Zones. Other 

commenters opposed allowing housing 

goals credit for Opportunity Zone loans 

due to the relative newness of the 

program. One of these commenters 

encouraged FHFA to conduct more 

analysis on the types of housing 

developments found in Opportunity 

Zones before offering housing goals 

credit. Another commenter expressed 

concern about the ultimate beneficiaries 

of Opportunity Zones, as well as 

skepticism that low- or moderateincome households or communities 

would benefit from the program. 

Question 4: Is there evidence that the 

Enterprise housing goals have helped 

expand low-income homeownership in 

the marketplace? 

FHFA received a number of 

comments emphasizing the value of the 

housing goals over time and the 

importance of maintaining Enterprise 

focus on these segments of the market. 

Some commenters stated that there has 

been a positive impact on low-income 

homeownership and the housing goals 

have expanded access to low-income 

households. Other commenters noted 

that the housing goals are foundational 

to the mission of the Enterprises, as laid 

out in the statute and their charters. 

Another commenter argued for the 

importance of the housing goals in 

incentivizing lending to low-income 

borrowers. 

One commenter stated that the 

housing goals have served as a catalyst 

for expanding banks’ abilities to serve 

low- and moderate-income borrowers. 

Another commenter stated that the 

housing goals have contributed to 

increases in Latino home ownership. 

The commenter also described the 

benefits of the Enterprises’ efforts to 

standardize eligibility criteria and 

underwriting factors, enabling more 

low-income households to obtain credit. 

The commenter also urged FHFA to 

monitor mortgage servicing standards 

and, if necessary, provide notice of any 

mortgage relief or loss mitigation 

options to ensure that servicers of 

Enterprise-backed loans proactively 

help homeowners who are struggling 

with payments. 

Several commenters encouraged 

FHFA to establish higher or more 

rigorous housing goals. One of the 

commenters argued that the Enterprises 

could better serve the manufactured 

housing market segment through 

purchasing chattel home loans and 

homes settled as real estate. Another 

commenter encouraged FHFA to 

support manufactured home consumer 

lending through the Enterprise housing 

goals and the Duty to Serve program. 

A number of commenters encouraged 

FHFA to review its policies to ensure 

there are no unnecessary barriers to 

meeting the housing goals and serving 

low-income households. One 

commenter specifically focused on the 

price of guarantee fees because pricing 

structures can impact whether a 

creditworthy borrower can afford a 

mortgage. The commenter highlighted 

the impact that guarantee fees have with 

respect to pooling risk, eliminating 

excessive risk-based pricing, and 

encouraging greater access to 

sustainable homeownership. 

Although the majority of the 

commenters expressed support for the 

housing goals, one commenter argued 

that they have not been successful and 

that the rates of homeownership for 

low-income households have declined 

over the last 30 years. The commenter 

recommended that FHFA address risklayering (i.e., mortgages with multiple 

characteristics associated with higher 

risk) by limiting Enterprise acquisitions 

of mortgages for low-income borrowers 

to mortgages with a projected mortgage 

default rate of less than 14 percent and 

by encouraging 20-year instead of 30- 

year mortgages. Another commenter 

expressed the belief that the housing 

goals have had a minimal effect on lowincome homeownership. The 

commenter argued that the mortgages 

captured by the housing goals are not 

excessively risky and would have been 

made in the absence of the housing 

goals. The commenter also argued that 

there is no evidence that the housing 

goals have created a lower-priced or 

more affordable mortgage. 

Other Comments 

There were additional topics that 

commenters raised in responses to the 

ANPR. For example, a number of 

commenters claimed that their 

responses to certain questions— 

specifically, those concerning whether 

there are categories of loans that should 

be excluded from the housing goals, the 

impact of the low-income areas home 

purchase subgoal, and the impact of the 

Enterprise housing goals over time— 

were affected by insufficient access to 

data. These commenters asserted that 

they would have been able to better 

respond to the questions in the ANPR if 

they had access to additional and more 

comprehensive data about the 

composition of housing goals loans and 

the historical performance of those 

loans. One commenter suggested 

supplementing existing reports like the 

Annual Housing Report with data on the 

risk characteristics and the performance 

of loans that receive housing goals 

credit. 

Several commenters focused on the 

racial homeownership gap between 

White households and Black or Latino 

households and emphasized the 

importance of homeownership to family 

wealth. The commenters cited the 

persistently lower rates of 


khammond on DSKJM1Z7X2PROD with PROPOSALS
Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 47403 

18 Details on FHFA’s single-family market models 

are available in the technical report ‘‘The Size of the 

Affordable Mortgage Market: 2022–2024 Enterprise 

Single-Family Housing Goals’’ available at https:// 

www.fhfa.gov/PolicyProgramsResearch/Research/ 

PaperDocuments/Market-Estimates_2022-2024.pdf. 

19See https://www.fhfa.gov/Media/PublicAffairs/ 

Pages/FHFA-Announces-New-Refinance-Optionfor-Low-Income-Families-with-Enterprise-BackedMortgages.aspx. 

20See https://www.fhfa.gov/Media/PublicAffairs/ 

Pages/FHFA-Eliminates-Adverse-Market-RefinanceFee.aspx. 21See 12 U.S.C. 4562(e)(2)(B). 

homeownership for Black and Latino 

households and requested that FHFA try 

to address the gap through the housing 

goals. One commenter encouraged 

FHFA to specifically consider the 

impact that any changes or revisions to 

the housing goals would have on 

borrowers of color. Another commenter 

proposed the creation of a new housing 

goal to focus on the racial 

homeownership gap. A number of 

commenters also noted the 

disproportionate impact the COVID–19 

pandemic has had on low-income 

households and people of color. 

Several commenters expressed 

concern about whether low-income 

borrowers have adequate access to 

affordable refinancing options, 

particularly in light of the recent low 

interest rate environment. Two of the 

commenters suggested that the 

Enterprises create a streamlined 

refinance program in order to ensure 

that rate/term refinances are more 

available to lower-income households. 

FHFA appreciates the thoughtful and 

thorough responses received on the 

ANPR and has analyzed the suggestions 

embedded in the comments. FHFA has 

taken these comments into account 

where relevant and possible in 

formulating the current proposed rule. 

Other comments or recommendations 

will require further analysis and the 

issues raised may be addressed in future 

rulemakings. 

With respect to requests for additional 

data, FHFA understands the value of 

data in evaluating and assessing the 

performance of the Enterprises in 

achieving the housing goals and is 

exploring additional ways to provide 

data to the public. FHFA intends to 

provide additional data on Enterprise 

loan purchases on the FHFA website. In 

determining which data can be 

provided, FHFA must consider that 

some data from the Enterprises are 

confidential or proprietary and may not 

be disclosed. 

In the rulemaking establishing the 

housing goals for 2021, FHFA did not 

publish the single-family model paper 

that it usually publishes for each 

housing goals rulemaking. FHFA 

received comments in response to the 

proposed 2021 housing goals rule and 

the ANPR that encouraged FHFA to 

publish the single-family model papers 

in future rulemakings. As with most 

previous housing goals rulemakings, 

FHFA has published the single-family 

model paper on its public website in 

conjunction with this housing goals 

proposed rule.18

In response to comments about the 

importance of access to refinancing 

options for lower income borrowers, 

FHFA notes that both Enterprises 

introduced new refinancing options in 

April 2021. Eligible borrowers must 

have incomes at or below 80 percent of 

AMI, and the lender must provide the 

borrower a savings of at least $50 per 

month and at least a 50-basis point 

reduction in the borrower’s interest rate. 

FHFA estimates that borrowers who 

take advantage of this refinancing 

option could save an average of $1,200 

to $3,000 per year.19 In addition, in July 

2021, FHFA announced the elimination 

of the Adverse Market Refinance Fee, to 

help families reduce their housing 

costs.20

In response to comments about the 

racial homeownership gap, FHFA has 

taken a number of actions. For example, 

FHFA held a listening session on June 

29, 2021 to obtain public input on the 

topic of closing the gap in sustainable 

homeownership. FHFA is also 

publishing on its website additional 

data on the race and ethnicity of loans 

that are eligible and qualified for 

housing goals credit. The additional 

data should assist those interested in 

analyzing the current housing goals 

performance of the Enterprises. Finally, 

as noted earlier and described in greater 

detail below, FHFA is proposing the 

creation of new area-based subgoals that 

separately measure the Enterprises’ 

purchases of mortgages in minority 

census tracts and low-income census 

tracts. FHFA is specifically requesting 

public comment on the proposed areabased subgoals, as well as all other 

aspects of this proposed rule. 

IV. Single-Family Housing Goals 

A. Factors Considered in Setting the 

Proposed Single-Family Housing Goal 

Levels 

The Safety and Soundness Act 

requires FHFA to consider the following 

seven factors in setting the single-family 

housing goals: 

1. National housing needs; 

2. Economic, housing, and 

demographic conditions, including 

expected market developments; 

3. The performance and effort of the 

Enterprises toward achieving the 

housing goals in previous years; 

4. The ability of the Enterprises to 

lead the industry in making mortgage 

credit available; 

5. Such other reliable mortgage data 

as may be available; 

6. The size of the purchase money 

conventional mortgage market, or 

refinance conventional mortgage 

market, as applicable, serving each of 

the types of families described, relative 

to the size of the overall purchase 

money mortgage market or the overall 

refinance mortgage market, respectively; 

and 

7. The need to maintain the sound 

financial condition of the Enterprises.21

FHFA has considered each of these 

seven statutory factors in setting the 

proposed benchmark levels for each of 

the single-family housing goals and 

subgoals. 

In setting the proposed benchmark 

levels for the single-family housing 

goals, FHFA typically relies on 

statistical market models to evaluate 

these statutory factors and generate a 

point forecast for each goal as well as a 

confidence interval for the point 

forecast. FHFA then considers other 

statutory factors, as well as other 

relevant policy issues, to select a 

specific point forecast within the 

confidence interval as the proposed 

benchmark level. 

In proposing the benchmark levels for 

the single-family housing goals for 

2022–2024, FHFA considered the 

statutory factors, including the current 

economic conditions, national housing 

needs, recent market developments, and 

the past performance of the Enterprises 

on the housing goals. 

Market forecast models. The purpose 

of FHFA’s market forecast models is to 

forecast the market share of the goalqualifying mortgage originations in the 

market for the 2022–2024 period. The 

models are intended to generate reliable 

forecasts rather than to test various 

economic hypotheses about the housing 

market or to explain the relationship 

between variables. Therefore, following 

standard practice among forecasters and 

economists at other federal agencies, 

FHFA estimates a reduced-form 

equation for each of the housing goals 

and fits an Autoregressive Integrated 

Moving Average (or ARIMA) model to 

each goal share. The models look at the 

statistical relationship between (a) the 

historical market share for each singlefamily housing goal or subgoal, as 

calculated from monthly HMDA data, 

and (b) the historical values for various 


khammond on DSKJM1Z7X2PROD with PROPOSALS
47404 Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 

22 Details on FHFA’s single-family market models 

will be available in the technical report ‘‘The Size 

of the Affordable Mortgage Market: 2022–2024 

Enterprise Single-Family Housing Goals’’ available 

at https://www.fhfa.gov/PolicyProgramsResearch/ 

Research/PaperDocuments/Market-Estimates_2022- 

2024.pdf. 

23The macroeconomic outlook described herein 

is based on Moody’s forecasts as of July 2021. 

24This refers to the mortgages insured or 

guaranteed by government agencies such as the 

Federal Housing Administration, Department of 

Veterans Affairs, and Rural Housing Service. 

25See https://www.federalreserve.gov/ 

newsevents/pressreleases/monetary20210428a.htm. 

26See https://www.federalreserve.gov/ 

newsevents/pressreleases/monetary20200315a.htm. 

27See Exhibit 1 in the technical report ‘‘The Size 

of the Affordable Mortgage Market: 2022–2024 

Enterprise Single-Family Housing Goals’’ available 

at https://www.fhfa.gov/PolicyProgramsResearch/ 

Research/PaperDocuments/Market-Estimates_2022- 

2024.pdf. 

28See https://www.fhfa.gov/AboutUs/Reports/ 

Pages/US-House-Price-Index-July-2021.aspx. 

29NAR’s HAI is a national index. It measures, 

nationally, whether an average family could qualify 

for a mortgage on a typical home. A typical home 

is defined as the national median-priced, existing 

single-family home as reported by NAR. An average 

family is defined as one earning the median family 

income. The calculation assumes a down payment 

of 20 percent of the home price and a monthly 

payment that does not exceed 25 percent of the 

median family income. An index value of 100 

means that a family earning the median family 

income has exactly enough income to qualify for a 

mortgage on a median-priced home. An index value 

above 100 signifies that a family earning the median 

family income has more than enough income to 

qualify for a mortgage on a median-priced home. A 

decrease in the index value over time indicates that 

housing is becoming less affordable. 

30See https://www.bea.gov/news/2021/grossdomestic-product-second-quarter-2021-advanceestimate-and-annual-update. 

31See https://www.cbo.gov/publication/57339. 

32Accessed on 7/29/2021 at https://www.bls.gov/ 

news.release/empsit.nr0.htm. 

factors that may influence the market 

shares, such as interest rates, inflation, 

house prices, home sales, the 

unemployment rate, and other factors. 

The models then project the future 

value of the affordable market share 

using forecast values of the model 

inputs. Separate models are developed 

for each of the single-family housing 

goals and subgoals. 

FHFA has employed similar models 

in past rulemaking cycles to generate 

market forecasts. The models are 

developed using monthly series 

generated from HMDA and other data 

sources, and the resulting monthly 

forecasts are then averaged into an 

annual forecast for each of the three 

years in the goal period. The models 

rely on 16 years of HMDA data, from 

2004 to 2019, the latest year for which 

public HMDA data was available at the 

time of model construction. FHFA will 

be updating the models with HMDA 

data for 2020 while developing the final 

rule. Additional discussion of the 

market forecast models can be found in 

a research paper, available at http://

www.fhfa.gov/PolicyProgramsResearch/ 

Research/.22

Current market outlook. There are 

many factors that impact the affordable 

housing market as a whole, and changes 

to any one of them could significantly 

impact the ability of the Enterprises to 

meet the goals. In developing the market 

models, FHFA used Moody’s forecasts 

as the source for macroeconomic 

variables where available.23 In cases 

where Moody’s forecasts were not 

available (for example, the share of 

government-insured/guaranteed home 

purchases and the share of governmentinsured/guaranteed refinances), FHFA 

generated and tested its own forecasts as 

in past rulemakings.24 Elements that 

impact the models and the 

determination of benchmark levels are 

discussed below. 

Interest rates are very important 

determinants of the trajectory of the 

mortgage market. In an effort to 

continue its support of the U.S. 

economy and promote maximum 

employment and price stability, the 

Federal Reserve reiterated at its April 

2021 meeting its commitment to seeking 

to achieve maximum employment and 

inflation at 2 percent in the long run by 

maintaining its target for the federal 

funds rate at between 0 percent and 0.25 

percent until its goals are achieved.25

The target was first lowered to this level 

in March 2020 to mitigate the effects of 

the COVID–19 pandemic.26 Moody’s 

July 2021 forecast assumes that this 

target is maintained until the third 

quarter of 2022, and then projects that 

mortgage interest rates—in particular 

the 30-year fixed rate, which is closely 

tied to the federal funds rate and the 10- 

year Treasury note yield—will rise 

gradually from the current historic low 

of 3.1 percent in 2020 to 4.3 percent by 

2024.27

Moody’s July 2021 forecast projects 

that the unemployment rate will 

gradually fall from its 2020 peak to 4.0 

percent in 2024. Moody’s also forecasts 

a modest increase in per capita 

disposable nominal income growth— 

from $53,081 in 2020 to $59,365 in 

2024. Furthermore, Moody’s estimates 

that the inflation rate will be in the 2.2– 

2.4 percent range from 2022 through 

2024. 

The combination of low interest rates, 

high deferred demand, and low supply 

fueled by the pandemic pushed house 

prices up by 18.0 percent in May 2021 

relative to May 2020, based on FHFA’s 

purchase-only House Price Index 

(HPI).28 Moody’s July 2021 forecast of 

the same HPI index expects house 

prices to increase at the annual rates of 

4.0, 3.7, and 1.5 percent in 2022, 2023, 

and 2024, respectively. 

Taken together, the expected increase 

in mortgage interest rates and house 

prices likely will impact the ability of 

low- and very low-income households 

to purchase homes. Housing 

affordability, as measured by Moody’s 

forecast of the National Association of 

Realtors’ (NAR) Housing Affordability 

Index (HAI), is projected to decline from 

an index value of 166.3 in 2020 to 135.4 

in 2024. Lower values of the HAI imply 

that affordability has worsened.29 The 

third leg of the housing affordability 

stool is the supply of affordable 

housing, but this had not kept pace with 

the growth of the demographic demand 

even before the advent of the COVID–19 

pandemic. 

In many ways, 2020 was an unusual 

year as it saw record volumes of both 

home purchase and home refinance 

loans. Low interest rates coupled with 

rising house prices created an incentive 

for many homeowners to refinance, 

resulting in a surge in refinance activity 

in 2020. The refinance share of overall 

mortgage originations since 2001 

increased from a low of 28 percent in 

2018 to 61 percent in 2020. Moody’s 

forecasts this share to sharply decline to 

42 percent in 2021, and continue to 

decline to 39 percent in 2022, and then 

to 31 percent and 24 percent in 2023 

and 2024, respectively. 

The economic forecast from Moody’s 

described above is largely consistent 

with that provided by other forecasters. 

According to the Bureau of Economic 

Analysis (BEA), real Gross Domestic 

Product (GDP) grew by 33.4 percent in 

the third quarter of 2020, following two 

quarters of losses. GDP growth was 

strong in the subsequent quarters, 

including the second quarter of 2021 

when it grew by 6.5 percent according 

to the advance estimate released by the 

BEA.30 According to the most recent 

estimate published by the Congressional 

Budget Office (CBO), GDP is projected 

to grow by 7.4 percent in 2021, after 

which GDP growth is projected to 

decline to 3.1 percent in 2022, and then 

remain under 2 percent through 2031.31

According to the Bureau of Labor 

Statistics (BLS), the unemployment rate 

peaked at 14.8 percent in April 2020, 

and fell to 5.9 percent in June 2021.32

CBO projects this number to be 4.6 

percent in the fourth quarter of 2021 

and that employment will surpass its 

pre-pandemic level in mid-2022. 

FHFA continues to monitor how these 

changes in the housing market and 

recent legislation may impact various 

segments of the market, including those 

targeted by the housing goals. 


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Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 47405 

33See Pradhan, Archana April 2021. ‘‘Millennials 

Lead the Pack for Home Purchases,’’ CoreLogic Blog 

accessed on 5/25/2021 at https://

www.corelogic.com/blog/2021/4/millennials-leadthe-pack-for-home-purchases.aspx. 

34 Id. (‘‘while half of the increase is consistent 

with the natural growth rate seen since 2014, the 

additional half of the 2020 jump was likely driven 

by the pandemic. In other words, the increase was 

accelerated by record low mortgage interest rate 

[sic] and flexibility to work remotely.’’). 

Post-model adjustments. While 

FHFA’s models can address and forecast 

many of the statutory factors that can 

make affordability for single-family 

homeownership more challenging for 

low-income and very low-income 

households, including increasing 

interest rates and rising property values, 

some factors are not captured in the 

models. FHFA, therefore, considers 

additional factors when selecting the 

benchmark level within the modelgenerated confidence interval for each 

of the single-family housing goals. Some 

of these additional factors may affect a 

subset of the market rather than the 

market as a whole. These factors include 

the effectiveness of COVID–19 

vaccination efforts and the path of the 

virus, as well as other factors that might 

contribute to an uneven economic 

recovery, demographic trends, and the 

Enterprises’ share of the mortgage 

market. Variability in these factors can 

also have a substantial impact on the 

ability of the Enterprises to meet the 

housing goals. Consequently, as 

discussed further below, FHFA will 

carefully monitor these factors and 

consider the potential impact of market 

shifts or larger trends on the ability of 

the Enterprises to achieve the housing 

goals. 

Demographic trends. The impact that 

specific demographic changes, like the 

housing demand patterns of millennials 

or the growth of minority households, 

will have on the housing market is not 

included explicitly in the market 

forecast models. Millennials have made 

up the largest share of home purchase 

mortgage applications for the past five 

years.33 This generation’s share of 

mortgage purchase applications rose 

about 2 to 4 percentage points a year 

from 33 percent in 2014 to 47 percent 

2019, but jumped dramatically in 2020 

to 54 percent.34

Enterprises’ share of the mortgage 

market. The Enterprises’ overall share of 

the mortgage market is subject to 

fluctuation. During the mortgage market 

bubble, the Enterprises’ share of the 

market dropped to about 43 percent in 

2005. That share rose to about 65 

percent in 2012, but declined to about 

55 percent in 2015. This share remained 

relatively stable until 2019, then jumped 

to 66 percent in 2020, as the Enterprises 

continued to acquire mortgages even as 

other private market participants 

stepped back. 

As shown in Graph 1, over the same 

time period, the total government share 

of the mortgage market (including the 

Federal Housing Administration, 

Department of Veterans Affairs, and 

Rural Housing Service) has generally 

been expanding, albeit with a recent 

contraction. In 2015, the total 

government share accounted for about 

30 percent of overall mortgage 

originations, considerably up from 

about 5 percent a decade earlier. That 

share was relatively stable until 2019, 

then declined to 22 percent in 2020. 

Past Performance of the Enterprises 

Table 1 provides the annual 

performance of both Enterprises on the 

single-family housing goals between 

2010 and 2020. Throughout this 

proposed rule, Enterprise performance 

data for 2020 is preliminary. FHFA will 


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Graph 1: Shares of the Conforming Mortgage Market 

100% 

80% 

60% 

40% 

20% 

0% 

05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 

■ Fannie Mae and Freddie Mac ::-: Government (FHA/VA/RHS) 

Ill Other (e.g., Retained Bank Portfolios) 

Source: National Mortgage Database; 2020 data through Q3. 
47406 Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 

make final determinations on Enterprise 

performance later in 2021. 

B. Proposed Benchmark Levels for the 

Single-Family Housing Goals for 2022– 

2024 

FHFA is proposing to establish the 

following benchmark levels for the 

single-family housing goals and 

subgoals for 2022–2024. 

1. Low-Income Home Purchase Goal 

The low-income home purchase goal 

is based on the percentage of all singlefamily, owner-occupied home purchase 

mortgages purchased by an Enterprise 

that are for low-income families, 

defined as families with incomes less 

than or equal to 80 percent of AMI. The 

proposed rule would set the annual lowincome home purchase goal benchmark 

level for 2022 through 2024 at 28 

percent. 


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Table 1: EntelJ)rise Single-Family Housing Goals Performance (2010-2020) 

Low-Income Home Purchase Goal 

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 

Actual Market 27.2 26.5 26.6 24.0 22.8 23.6 22.9 24.3 25.5 26.6 27.6 

Benchmark 27.0 27.0 23.0 23.0 23.0 24.0 24.0 24.0 24.0 24.0 24.0 

Fannie Mae Performance 25.1* 25.8* 25.6 23.8 23.5 23.5* 22.9 25.5 28.2 27.8 29.0 

Freddie Mac Performance 27.8 23.3* 24.4 21.8* 21.0* 22.3* 23.8 23.2* 25.8 27.4 28.5 

Very Low-Income Home Purchase Goal 

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 

Actual Market 8.1 8.0 7.7 6.3 5.7 5.8 5.4 5.9 6.5 6.6 7.0 

Benchmark 8.0 8.0 7.0 7.0 7.0 6.0 6.0 6.0 6.0 6.0 6.0 

Fannie Mae Performance 7.2* 7.6* 7.3 6.0* 5.7 5.6* 5.2* 5.9 6.7 6.5 7.3 

Freddie Mac Performance 8.4 6.6* 7.1 5.5* 4.9* 5.4* 5.7 5.7* 6.3 6.8 6.9 

Low-Income Areas Home Purchase Goal 

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 

Actual Market 24 22 23.2 22.1 22.1 19.8 19.7 21.5 22.6 22.9 22.4 

Benchmark 24 24 20 21 18 19 17 18 18 19 18 

Fannie Mae Performance 24.1 22.4 22.3 21.6 22.7 20.4 20.2 22.9 25.1 24.5 23.6 

Freddie Mac Performance 23.8* 19.2* 20.6 20.0* 20.1 19 19.9 20.9 22.6 22.9 21.8 

Low-Income Areas Home Purchase Subgoal 

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 

Actual Market 12.1 11.4 13.6 14.2 15.0 15.2 15.9 17.1 18.0 18.1 17.6 

Benchmark 13.0 13.0 11.0 11.0 11.0 14.0 14.0 14.0 14.0 14.0 14.0 

Fannie Mae Performance 12.4 11.6 13.1 14.0 15.5 15.6 16.2 18.3 20.1 19.5 18.3 

Freddie Mac Performance 10.8* 9.2* 11.4 12.3 13.6 14.5 15.6 16.4 17.3 18.0 17.1 

Low-Income Refinance Goal 

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 

Actual Market 20.2 21.5 22.3 24.3 25.0 22.5 19.8 25.4 30.7 24.0 21.0 

Benchmark 21.0 21.0 20.0 20.0 20.0 21.0 21.0 21.0 21.0 21.0 21.0 

Fannie Mae Performance 20.9 23.1 21.8 24.3 26.5 22.1 19.5* 24.8 31.2 23.8 21.2 

Freddie Mac Performance 22.0 23.4 22.4 24.1 26.4 22.8 21.0 24.8 27.3 22.4 19.7* 

*Numbers marked with asterisks indicate that the Enterprise failed to meet the goal. 
Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 47407 

As shown in Table 2, both Enterprises 

exceeded both the benchmark and 

market levels in 2018 and 2019. 

Although FHFA will not officially 

determine the 2020 housing goals 

performance of the Enterprises until 

later in 2021, both Enterprises exceeded 

the benchmark level in 2020. 

The low-income home purchase 

market levels have increased steadily 

since 2016. FHFA’s current model 

forecasts that the market for this goal in 

2020 will continue to increase and end 

up between 27 and 31.6 percent. From 

2022 through 2024, the proposed goal 

period, the current forecast is expected 

to decline slightly from these peaks and 

stay around 26 percent for each of the 

three years. As noted previously and in 

the accompanying market model paper, 

this forecast is based on the 2019 HMDA 

data and Moody’s forecasts as of July 

2021 and will be updated before the 

release of the final housing goals rule. 

FHFA is proposing a benchmark level 

for the low-income home purchase goal 

of 28 percent, which is above the 

middle point of the market forecast but 

well within the confidence interval for 

each year. This proposed benchmark 

level is significantly higher than the 

benchmark level of 24 percent that has 

been in place each year since 2015. 

FHFA is proposing a higher benchmark 

level for this goal in order to encourage 

the Enterprises to continue to find ways 

to support lower income borrowers 

without compromising safe and sound 

lending standards. FHFA recognizes 

that there may be challenges to meeting 

the goal, particularly in light of the 

recovery from the global pandemic. 

FHFA will continue to monitor the 

Enterprises in its capacities as regulator 

and as conservator, and if FHFA 

determines that the benchmark level for 

the low-income home purchase goal is 

not feasible for the Enterprises to 

achieve in light of market conditions, or 

for any other reason, FHFA will take 

appropriate steps to adjust the 

benchmark level. 

2. Very Low-Income Home Purchase 

Goal 

The very low-income home purchase 

goal is based on the percentage of all 

single-family, owner-occupied home 

purchase mortgages purchased by an 

Enterprise that are for very low-income 

families, defined as families with 

incomes less than or equal to 50 percent 

of AMI. The proposed rule would set 

the annual very low-income home 

purchase goal benchmark level for 2022 

through 2024 at 7 percent. 

As shown in Table 3, both Enterprises 

exceeded the benchmark level in 2018 

and 2019. In 2018, Fannie Mae 

exceeded both the benchmark and 

market levels, and in 2019, Freddie Mac 

exceeded both the benchmark and 

market levels. In 2020, both Fannie Mae 

and Freddie Mac exceeded the 

benchmark levels. FHFA will officially 

determine the 2020 market performance 

of the Enterprises later in 2021. 


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Table 2. Enterprise Low-Income Home Purchase Goal 

Historical Performance Pro.iected Forecast 

Year 2018 2019 2020 2021 2022 2023 2024 

Actual Marlcet 25.5% 26.6% 27.6% 

Benchmarlc 24.0"/o 24.0% 24.0% 24.0% 

Current Marlcet Forecast 28.9% 26.9% 26.2% 26.4% 

+!- +!- +!- +!-

4.0% 5.1% 6.1% 6.9% 

Fannie :Mae Perfurmance 

Low-Income Home Purchase Mortgages 294,559 298,702 374,376 

Total Home Purchase Mortgages 1,044,098 1,075,032 1,288,806 

Low-Income% of Home Purchase Mortgages 28.2% 27.8% 29.0% 

Freddie l\1ac Performance 

Low-Income Home Purchase Mortgages 199,429 235,811 280,561 

Total Home Purchase Mortgages 774,394 860,669 982,888 

Low-Income% of Home Purchase Mortgages 25.8% 27.4% 28.5% 

Table 3. Very Low-Income Home Purchase Goal 

Historical Perfurmance Pro.iected Forecast 

Year 2018 2019 2020 2021 2022 2023 2024 

Actual Marlcet 6.5% 6.6% 7.0"/o 

Benchmarlc 6.0% 6.0% 6.0"/o 6.0"/o 

Current Marlcet Forecast 7.6% 6.8% 6.6% 6.6% 

+!- +!- +!- +!-

1.4% 1.8% 21% 24% 

Fannie :Mae Performance 

Very Low-Income Home Purchase Mortgages 69,952 70,214 93,909 

Total Home Purchase Mortgages 1,044,098 1,075,032 1,288,806 

Very Low-Income% ofHome Purchase Mortgages 6.7% 6.5% 7.3% 

Freddie l\1ac Performance 

Very Low-Income Home Purchase Mortgages 48,823 58,136 68,216 

Total Home Purchase Mortgages 774,394 860,669 982,888 

Verv Low-Income% ofHome Purchase Mortgages 6.3% 6.8% 6.9% 
47408 Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 

35See https://www.fhfa.gov/ 

SupervisionRegulation/Rules/Pages/EnterpriseHousing-Goals-Advance-Notice-of-ProposedRulemaking.aspx. 

Like the low-income home purchase 

market levels, the very low-income 

home purchase market levels have 

increased steadily since a low in 2016 

of 5.4 percent. FHFA’s current model 

forecasts that the market for this goal in 

2020 will continue to increase and end 

up between 6.5 and 8.1 percent. From 

2022 through 2024, the proposed goal 

period, the current forecast is expected 

to decline slightly from these peaks and 

stay between 6.4 and 6.8 percent for 

each of the three years. This forecast is 

based on the latest data available and 

will be updated before the release of the 

final housing goals rule. 

FHFA is proposing a benchmark level 

for the very low-income home purchase 

goal of 7 percent, which is close to the 

market forecast and well within the 

confidence interval for each year. This 

proposed benchmark level is an increase 

from the benchmark level of 6 percent 

that has been in place each year since 

2015. FHFA is proposing a slightly 

higher benchmark level in order to 

encourage the Enterprises to continue to 

find ways to support very low-income 

borrowers without compromising safe 

and sound lending standards. FHFA 

recognizes that there may be challenges 

to meeting the goal, particularly in light 

of the recovery from the global 

pandemic. FHFA will continue to 

monitor the Enterprises in its capacities 

as regulator and as conservator, and if 

FHFA determines that the benchmark 

level for the low-income home purchase 

goal is not feasible for the Enterprises to 

achieve in light of market conditions, or 

for any other reason, FHFA will take 

appropriate steps to adjust the 

benchmark level. 

3. Proposed Area-Based Subgoals 

The proposed rule would establish 

two new area-based subgoals, each with 

its own benchmark level. The new 

minority census tracts subgoal would 

specifically assess the Enterprises’ 

performance in minority areas with 

respect to loans for families with 

incomes no greater than 100 percent of 

AMI. The new low-income census tracts 

subgoal would assess the Enterprises’ 

performance in low-income census 

tracts. The low-income census tracts 

subgoal would not include any loans 

that would qualify for the minority 

census tracts subgoal. In other words, 

the low-income census tracts subgoal 

would be limited to: (1) Loans in lowincome census tracts that are not 

minority census tracts, and (2) loans to 

borrowers above 100 percent of AMI in 

low-income census tracts that are also 

minority census tracts. The two 

proposed subgoals would replace the 

existing low-income areas home 

purchase subgoal and address some of 

the issues that FHFA previously 

identified in the 2018–2020 proposed 

rule as well as in Question 2 of the 

recent ANPR (2020) discussed in 

Section III.D. above.35

The previous subgoal structure 

allowed the Enterprises to count all 

single-family, owner-occupied home 

purchase mortgages purchased that were 

either: (1) For families in low-income 

areas, defined to include census tracts 

with median income less than or equal 

to 80 percent of AMI; or (2) for families 

with incomes less than or equal to AMI 

who reside in minority census tracts 

(defined as census tracts with a minority 

population of at least 30 percent and a 

tract median income of less than 100 

percent of AMI). As a result, borrowers 

could qualify under either or both 

conditions. Over the years, this has 

meant that many goal-qualifying loans 

purchased by the Enterprises were for 

higher income families (over 100 

percent of AMI) rather than for families 

at or below 100 percent of AMI. The 

proposed rule would modify the 

previous structure and refocus 

Enterprise efforts towards minority 

census tracts and families at or below 

100 percent of AMI. The new subgoal 

structure would require the Enterprises 

to achieve both of the new subgoal 

benchmark levels each year. FHFA will 

continue to establish the overall lowincome areas housing goal on an annual 

basis by adding together the benchmark 

levels for the minority census tracts 

subgoal and the low-income census 

tracts subgoal, along with the disaster 

areas increment determined by FHFA 

each year. 

The proposed rule would establish 

the benchmark levels for the new 

subgoals for 2022–2024 as follows: 

Subgoal Criteria 

Proposed 

benchmark 

level for 

2022–2024 

(percent) 

Minority Census Tracts 

Subgoal.

Home purchase mortgages on single-family, owner-occupied properties to borrowers with income no 

greater than 100 percent of AMI in minority census tracts.1.

10 

Low-Income Census 

Tracts Subgoal.

(i) Home purchase mortgages on single-family, owner-occupied properties to borrowers (regardless 

of income) in low-income census tracts 2 that are not minority census tracts, and (ii) home purchase mortgages on single-family, owner-occupied properties to borrowers with incomes greater 

than 100 percent of AMI in low-income census tracts that are also minority census tracts.

4 

Minority Census Tracts 

Subgoal.

Home purchase mortgages on single-family, owner-occupied properties to borrowers with income no 

greater than 100 percent of AMI in minority census tracts.1.

10 

1 Census tracts that have a minority population of at least 30 percent and a median income of less than 100 percent of AMI. 

2 Census tracts where the median income is no greater than 80 percent of AMI. 

FHFA recognizes that, in the past, 

some loans acquired by the Enterprises 

were from locations considered both 

minority and low-income census tracts 

and, as a result, would have been 

counted under either criterion. The 

proposed rule would define the new 

subgoals so that a loan could not be 

counted under both of the new subgoals. 

Under the proposed rule, for loans 

purchased from areas that meet the 

criteria for both minority and lowincome census tracts, the borrower’s 

AMI would determine under which 

subgoal the loan would be eligible. If the 

borrower’s income is less than or equal 

to 100 percent of AMI, the loan would 

be counted towards the minority census 

tracts subgoal, and if the borrower’s 

income is above 100 percent of AMI, the 

loan would be counted towards the lowincome census tracts subgoal. FHFA 

believes that requiring the Enterprises to 

specifically and separately target loans 

for families living in minority and lowincome census tracts will result in better 

and more transparent reporting on both 

of these categories. 

FHFA will continue to set a 

benchmark level for the overall lowVerDate Sep<11>2014 16:13 Aug 24, 2021 Jkt 253001 PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 E:\FR\FM\25AUP1.SGM 25AUP1

khammond on DSKJM1Z7X2PROD with PROPOSALS
Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 47409 

36 Disaster declarations are listed on the FEMA 

website at https://www.fema.gov/disasters. 

income areas housing goal that will 

include mortgages to families with 

incomes less than or equal to 100 

percent of AMI who are located in 

federally declared disaster areas.36 The 

proposed rule would define the lowincome areas housing goal to be the sum 

of (i) the benchmark level for the new 

minority census tracts subgoal, (ii) the 

benchmark level for the new lowincome census tracts subgoal, and (iii) a 

disaster areas increment set in 

accordance with existing practice. 

Because the minority census tracts 

subgoal and the low-income census 

tracts subgoal are defined with no 

overlap between them, the proposed 

definition of the overall low-income 

areas housing goal is exactly equivalent 

to the current low-income areas housing 

goal. The disaster low-income areas 

housing goal benchmark level is set 

annually by FHFA separately from this 

rulemaking. Each year, FHFA notifies 

the Enterprises by letter of the 

benchmark level for that year, and this 

practice will continue. 

The tables below provide recent 

performance of both Enterprises in these 

subgoal areas. 

Minority census tracts subgoal 

Recent performance 

(percent) 

2018 2019 2020 

Market .......................................................................................................................................... 9.0 9.2 9.2 

Fannie Mae Performance ............................................................................................................ 11.0 10.7 10.1 

Freddie Mac Performance ........................................................................................................... 9.0 9.5 9.2 

Source: FHFA’s tabulation of Home Mortgage Disclosure Act (HMDA) and Enterprises’ data. 

Low-income census tracts subgoal 

Recent performance 

(percent) 

2018 2019 2020 

Market .......................................................................................................................................... 9.1 8.9 8.5 

Fannie Mae Performance ............................................................................................................ 9.1 8.8 8.3 

Freddie Mac Performance ........................................................................................................... 8.3 8.5 8.0 

Source: FHFA’s tabulation of Home Mortgage Disclosure Act (HMDA) and Enterprises’ data. 

The proposed rule would establish 

the benchmark level for the minority 

census tracts subgoal at 10 percent. This 

proposed benchmark level is slightly 

higher than the Enterprises’ recent 

performance, when measured as if the 

proposed subgoal had been in place. 

FHFA is proposing this higher 

benchmark level to ensure that the 

Enterprises are targeting the needs of 

communities of color and to emphasize 

the importance of improving access to 

credit in these communities. 

The proposed rule would establish 

the benchmark level for the low-income 

census tracts subgoal at 4 percent. This 

proposed benchmark level is lower than 

the Enterprises’ recent performance, 

when measured as if the proposed 

subgoal had been in place. FHFA is 

proposing this lower benchmark level 

due to concerns about incentivizing 

purchases of loans to higher-income 

borrowers in low-income areas. 

However, this proposed benchmark 

level is intended to encourage the 

Enterprises to continue providing 

critically needed access to credit in lowincome areas. 

FHFA believes that the proposed 

benchmark levels for each of the new 

area-based subgoals are feasible and 

would not be disruptive to the market. 

FHFA specifically requests comments 

on the new proposed subgoal structure 

and the proposed benchmark levels. 

4. Low-Income Refinancing Goal 

The low-income refinancing goal is 

based on the percentage of all singlefamily, owner-occupied refinance 

mortgages purchased by an Enterprise 

that are for low-income families, 

defined as families with incomes less 

than or equal to 80 percent of AMI. The 

proposed rule would set the annual lowincome refinancing housing goal 

benchmark level for 2022 through 2024 

at 26 percent. 


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47410 Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 

37 12 U.S.C. 4563(a)(4). 

As shown in Table 4, both Enterprises 

exceeded the benchmark level for the 

low-income refinancing goal in 2018 

and 2019. In 2020, Fannie Mae 

exceeded the benchmark level, while 

Freddie Mac did not. Fannie Mae 

exceeded the market levels for this goal 

in 2018 and 2020, but not in 2019. 

Freddie Mac has trailed the market level 

each year from 2018 through 2020. As 

noted, 2020 data reflects FHFA’s 

preliminary determination of Enterprise 

performance on this goal. 

FHFA is proposing a benchmark level 

for the low-income refinancing goal of 

26 percent, which is close to the market 

forecast and well within the confidence 

interval for each year. This proposed 

benchmark level is an increase from the 

current benchmark level of 21 percent, 

but on the lower end of the range of 

estimates for 2023 and 2024. FHFA is 

proposing a slightly lower benchmark 

level due to the unpredictability of 

future interest rates and refinancing 

volumes, which result in greater 

volatility in the low-income shares for 

refinancing mortgages than what is 

typical for the home purchase mortgage 

market. FHFA will continue to monitor 

the Enterprises in its capacities as 

regulator and as conservator, and if 

FHFA determines that the benchmark 

level for the low-income refinancing 

goal is not feasible, then FHFA will take 

appropriate steps to adjust the 

benchmark level. 

V. Multifamily Housing Goals 

A. Factors Considered in Setting the 

Proposed Multifamily Housing Goal 

Levels 

In setting the proposed benchmark 

levels for the multifamily housing goals, 

FHFA has considered the statutory 

factors outlined in Section 1333(a)(4) of 

the Safety and Soundness Act. These 

factors include: 

1. National multifamily mortgage 

credit needs and the ability of the 

Enterprises to provide additional 

liquidity and stability for the 

multifamily mortgage market; 

2. The performance and effort of the 

Enterprises in making mortgage credit 

available for multifamily housing in 

previous years; 

3. The size of the multifamily 

mortgage market for housing affordable 

to low-income and very low-income 

families, including the size of the 

multifamily markets for housing of a 

smaller or limited size; 

4. The ability of the Enterprises to 

lead the market in making multifamily 

mortgage credit available, especially for 

multifamily housing affordable to lowincome and very low-income families; 

5. The availability of public subsidies; 

and 

6. The need to maintain the sound 

financial condition of the Enterprises.37

Unlike the single-family housing 

goals, performance on the multifamily 

housing goals is measured solely against 

a benchmark level set by FHFA, without 

any retrospective market measure. The 

absence of a retrospective market 

measure for the multifamily housing 

goals results, in part, from the lack of 

comprehensive data about the 

multifamily mortgage market. Unlike 

the single-family mortgage market, 

where HMDA provides a reasonably 

comprehensive dataset about singlefamily mortgage originations each year, 

the multifamily mortgage market (and 

the affordable multifamily mortgage 

market segment) has no comparable 

single, unified source with coverage 

extending across many years. As a 

result, it is difficult to correlate different 

datasets that rely on different reporting 

metrics. 

The lack of comprehensive data for 

the multifamily mortgage market is even 

more acute with respect to the segments 

of the market that are targeted to lowincome families, defined as families 

with incomes at or below 80 percent of 

AMI, and very low-income families, 

defined as families with incomes at or 

below 50 percent of AMI. 

Another difference between the 

single-family and multifamily housing 

goals is that while there are separate 

single-family housing goals for home 

purchase and refinancing mortgages, the 

multifamily housing goals include all 

Enterprise multifamily mortgage 

purchases, regardless of the purpose of 

the loan. In addition, unlike the singlefamily housing goals, the multifamily 

housing goals are measured based on 

the total number of affordable units in 

properties financed by multifamily 

mortgage loans rather than on a 

percentage of affordable units in 

properties financed by multifamily 

mortgage loans. The use of total number 

of eligible units rather than percentages 

requires that FHFA take into account 

the expected size of the overall 

multifamily mortgage market and the 

affordable share of the market, as well 

as the expected volume of the 

Enterprises’ overall multifamily 

purchases (in dollar terms) and the 

affordable share of those purchases. 

Methodology. FHFA sets the 

multifamily benchmark levels by 

estimating the minimum number of 

affordable rental units in multifamily 

properties financed by mortgage loans 

purchased by each Enterprise that 

would be needed to ensure a strong 

focus on affordability by the Enterprises 

in the proposed goal period. FHFA 

achieves this by considering the 

required statutory factors, a number of 

which are related, as discussed below. 

For the proposed 2022–2024 goal 


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Table 4. Low-Income Refinancing Goal 

IIlstorical Performance Pro_jected Forecast 

Year 2018 2019 2020 2021 2022 2023 2024 

Actual Matket 30.7"/o 24.0% 21.0% 

Benchllllllk 21.0% 21.0% 21.0% 21.0% 

Current Matket Forecast 25.5% 26.1% 28.0% 28.9% 

+!- +!- +!- +!-

4.7"/o 6.0% 7.1% 7.<.13⁄4 

Fannie 1"le Performance 

Low-Income Refinance Mortgages 196,230 234,249 663,667 

Total Refinance Mortgages 629,816 985,932 3,133,931 

Low-Income% of Refinance Mortgages 31.2% 23.8% 21.2% 

Freddie :Mac Performance 

Low-Income Refinance Mortgages 104,843 159,322 490,176 

Total Refinance Mortgages 384,593 712,376 2,485,748 

Low-Income% of Refinance Mortgages 27.3% 22.4% 19.7"/o 
Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 47411 

38See https://home.treasury.gov/news/pressreleases/sm1236. 

39See 12 U.S.C. 4563(c). 

40 ‘‘The State of the Nation’s Housing 2020,’’ Joint 

Center for Housing Studies of Harvard University, 

December 2020, p. 32, available at https://

www.jchs.harvard.edu/sites/default/files/reports/ 

files/Harvard_JCHS_The_State_of_the_Nations_

Housing_2020_Report_Revised_120720.pdf. 

41 ‘‘The State of the Nation’s Housing 2020,’’ Joint 

Center for Housing Studies of Harvard University, 

December 2020, p. 1, available at https://

www.jchs.harvard.edu/sites/default/files/reports/ 

files/Harvard_JCHS_The_State_of_the_Nations_

Housing_2020_Report_Revised_120720.pdf. 

42See 12 U.S.C. 4563(c). 

43LIHTCs are a supply-side subsidy created 

under the Tax Reform Act of 1986 and is the main 

source of new affordable housing construction in 

the United States. LIHTCs are used for the 

acquisition, rehabilitation, and/or new construction 

of rental housing for low-income households. 

LIHTCs have facilitated the creation or 

rehabilitation of approximately 2.4 million 

affordable units since inception of the program in 

1986. 

44The State of the Nation’s Housing 2020,’’ Joint 

Center for Housing Studies of Harvard University, 

December 2020, p. 6, available at https://

www.jchs.harvard.edu/sites/default/files/reports/ 

files/Harvard_JCHS_The_State_of_the_Nations_

Housing_2020_Report_Revised_120720.pdf. 

45See https://www.cbpp.org/research/housing/ 

more-housing-vouchers-most-important-step-tohelp-more-people-afford-stable-homes. 

period, FHFA also took into account the 

PSPA limit on each Enterprise’s 

multifamily mortgage acquisitions, 

which is $80 billion over a trailing 52- 

week period and requires that 50 

percent of that amount be missiondriven mortgages, as determined by 

FHFA.38 Much of the analysis below 

describes trends in the overall 

multifamily mortgage market as they 

apply to setting the proposed 

benchmark levels. FHFA recognizes that 

these general trends may not apply to 

the same extent to all segments of the 

multifamily mortgage market. 

Affordability in the multifamily 

mortgage market. There are several 

factors that make it difficult to 

accurately forecast the affordable share 

of the multifamily mortgage market. 

First, the portion of the overall 

multifamily mortgage market that 

provides housing units affordable to 

low-income and very low-income 

families may vary from year-to-year. 

Second, the competition between 

purchasers of mortgages within the 

multifamily mortgage market overall 

may differ from the competition within 

the affordable multifamily mortgage 

market segment. Finally, the volume for 

the affordable multifamily mortgage 

market segment also will depend on the 

availability of affordable housing 

subsidies. 

FHFA determines affordability based 

on a family’s rent and utility expenses 

not exceeding 30 percent of AMI.39

Using this measure, affordability for 

families living in rental units has 

decreased in recent years for many 

families. According to the Joint Center 

for Housing Studies (JCHS), in its 2020 

State of the Nation’s Housing Report, 

prior to 2020, the composition of 

housing stock had already negatively 

affected affordability. For example, the 

report stated that while housing stock 

grew by 7.5 million units between 2004 

and 2019, most of these additions were 

in single-family rentals or properties 

with 20 units or higher, whereas the 

number of units in two- to four-unit 

buildings declined by 38,000 units. The 

units in larger multifamily buildings 

tend to have higher median rents.40 The 

supply of apartments with rents of $600 

or lower declined by 2.5 million 

between 2004 and 2019, unlike 

apartments with rents of over $1,000, 

which increased by 10.4 million units 

within the same time period, according 

to the JCHS report. 

The JCHS study of the rental market 

noted the growing presence of costburdened renters in certain income 

segments. Although, in 2019, the share 

of tenants that paid more than 30 

percent of household income for rental 

housing decreased, at close to 50 

percent, that number was still high. 

Specifically, the share of cost-burdened 

households with incomes between 

$25,000 and $74,999 increased between 

2011 and 2019.41 This is significant 

because the housing goals statute 

defines affordability at the 30 percent 

threshold.42

The supply gap in affordable units 

combined with the prevalence of costburdened renters has led to an erosion 

of affordability, with fewer units 

qualifying for the housing goals. This 

affordability gap is also reflected in the 

falling share of the low-income 

multifamily units backing loans 

purchased by the Enterprises. While 77 

percent of the multifamily units 

financed by mortgages purchased by 

Fannie Mae in 2011 were low-income, 

that share dropped steadily in the 

intervening years to 64 percent in 2017, 

rising to 69 percent in 2020. At Freddie 

Mac, the low-income share also peaked 

in 2011 and 2012 at 79 percent, and 

decreased gradually to 65 percent in 

2017, rising to 71 percent in 2020. 

Financing for affordable multifamily 

buildings—particularly those that are 

affordable to very low-income 

families—often uses an array of state 

and federal housing subsidies, such as 

low-income housing tax credits 

(LIHTCs), tax-exempt bonds, Section 8 

rental assistance, or soft subordinate 

financing.43 Investor interest in tax 

credit equity projects of all types and in 

all markets has been strong in recent 

years, especially in markets in which 

bank investors are seeking to meet 

Community Reinvestment Act (CRA) 

goals. Consequently, there should 

continue to be opportunities in the 

multifamily mortgage market to provide 

permanent financing for properties with 

LIHTCs during the 2022–2024 period. 

Additionally, there should be 

opportunities for market participants, 

including the Enterprises, to purchase 

mortgages that finance the preservation 

of existing affordable housing units 

(especially for restructurings of older 

properties that reach the end of their 

initial 15-year LIHTC compliance 

periods and for refinancing properties 

with expiring Section 8 Housing 

Assistance Payment contracts). 

Availability of public subsidies. 

Multifamily housing assistance is 

primarily available in two forms— 

demand-side subsidies which either 

directly assist low-income tenants (e.g., 

Section 8 vouchers) or provide projectbased rental assistance (Section 8 

contracts), and supply-side subsidies 

which support the creation and 

preservation of affordable housing (e.g., 

public housing and LIHTCs). The 

availability of public subsidies impacts 

the overall affordable multifamily 

housing market, and significant changes 

to historic programs could impact the 

ability of the Enterprises to meet the 

housing goals. The Enterprises also play 

a role in providing liquidity to facilitate 

the preservation of public subsidies, like 

expiring Section 8 Housing Assistance 

Payment contracts and LIHTC 

properties reaching the end of the use 

restricted affordability period. 

The need for public subsidies persists 

as the number of cost-burdened renters 

remains high, at over 20 million renter 

households in 2019.44 The Center for 

Budget Policy Priorities estimates that 

only one in four households eligible for 

federal housing assistance currently 

receives it.45

Certain public subsidies have been 

provided since March 2020 to help the 

affordable housing sector and lowincome households during the 

pandemic. The CARES Act provided 

supplemental unemployment benefits to 

help people pay their rent, but those 

benefits expired on July 31, 2020. In 

December 2020, the Consolidated 

Appropriations Act, 2021 reinstated 

supplemental unemployment benefits 

through March 14, 2021. In March, the 

American Rescue Plan Act of 2021 

extended those benefits through 

September 6, 2021. 


khammond on DSKJM1Z7X2PROD with PROPOSALS
47412 Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 

46See https://www.mba.org/2021-press-releases/ 

february/mba-forecast-commercial/multifamilylending-to-increase-11-percent-to-486-billion-in2021; https://newslink.mba.org/cmf-newslinks/ 

2020/november/mba-commercial-multifamilynewslink-nov-12-2020/mba-forecast-2020- 

commercial-multifamily-lending-down-34-from2019-record-volumes/. 

47Accessed on 5/18/2021 at https://

www.nmhc.org/research-insight/quick-facts-figures/ 

quick-facts-resident-demographics/householdcharacteristics. 

48Urban Institute, ‘‘The GSEs’ Shrinking Role in 

the Multifamily Market,’’ April 2015, pg. 4: https:// 

www.urban.org/sites/default/files/publication/ 

48986/2000174-The-GSEs-Shrinking-Role-in-theMultifamily-Market.pdf. 

49See https://www.fhfa.gov/Media/PublicAffairs/ 

Pages/FHFA-Moves-to-Provide-EvictionSuspension-Relief-for-Renters-in-MultifamilyProperties.aspx. 

50See https://www.fhfa.gov/Media/PublicAffairs/ 

Pages/FHFA-Provides-Tenant-Protections.aspx. 

51See https://www.fhfa.gov/Media/PublicAffairs/ 

Pages/FHFA-Extends-COVID-19-MultifamilyForbearance-through-March-31-2021.aspx. 

52See https://www.fhfa.gov/Media/PublicAffairs/ 

Pages/FHFA-Extends-COVID-19-MultifamilyForbearance-through-June-30-2021.aspx. 

53See https://www.fhfa.gov/Media/PublicAffairs/ 

Pages/FHFA-Extends-COVID-19-MultifamilyForbearance-through-September-30-2021.aspx. 

54FHFA Announces 2021 Multifamily Loan 

Purchase Caps for Fannie Mae and Freddie Mac, 

November 17, 2020: https://www.fhfa.gov/Media/ 

PublicAffairs/Pages/FHFA-Announces-2021-MFLoan-Purchase-Caps-for-Fannie-and-Freddie.aspx. 

Multifamily mortgage market. FHFA’s 

consideration of the multifamily 

mortgage market addresses the size of 

and competition within the multifamily 

mortgage market, as well as the subset 

of the multifamily mortgage market 

affordable to low-income and very lowincome families. The pandemic has 

impacted the multifamily affordable 

housing market and renters across the 

country. In February 2021, the Mortgage 

Bankers Association (MBA) estimated 

that multifamily mortgage originations 

declined by 17 percent in 2020 relative 

to the previous year. The MBA also 

anticipated a partial recovery in 2021, 

with total multifamily mortgage 

originations projected to be $323 billion, 

a 7 percent increase from 2020 but still 

below the 2019 level of $364 billion.46

In addition, MBA’s February forecast 

anticipated an economic rebound in 

2021 that should bring stability to the 

market and projected that multifamily 

mortgage lending should almost fully 

rebound in 2022 to $358 billion, just shy 

of the 2019 level. Despite that overall 

expected rebound, recent multifamily 

housing trends point to likely prolonged 

and diverse impacts in subsegments. 

According to the National Multifamily 

Housing Council’s tabulation of 

American Community Survey 

microdata, in 2019 about 45.4 percent of 

renter households (20 million 

households) lived in multifamily 

properties, defined as structures with 

five or more rental units with the 

remaining renter households living in 

1–4 unit single-family structures.47

Nationally, on a year-over-year basis, 

rent growth slowed during the 

pandemic to 0.3 percent in 2020, 

according to CoStar data. Growth 

accelerated in the first half of the year, 

with the second quarter of 2021 growing 

by 7.1 percent relative to one year 

earlier. Vacancy rates rose during the 

pandemic but have begun to decline in 

2021. 

Role of the Enterprises. In setting the 

proposed multifamily housing goal 

benchmark levels, FHFA has considered 

the ability of the Enterprises to lead the 

market in making multifamily mortgage 

credit available. The Enterprises’ share 

of the overall multifamily mortgage 

origination market increased in the 

years immediately following the 

financial crisis, but their share has 

declined more recently in response to 

growing private sector participation. 

The Enterprises’ share of the 

multifamily mortgage origination market 

was approximately 70 percent in 2008 

and 2009, compared to 38 percent in 

2015.48 The total share has remained at 

around 40 percent since 2015, due for 

the most part to the cap imposed by 

FHFA in its role as conservator under 

the Conservatorship Scorecard, with the 

exception of 2017 and 2020 when that 

share was around 50 percent. 

FHFA and the Enterprises have also 

taken numerous actions to support the 

multifamily housing market and provide 

relief to renters since March 2020. For 

example, on March 23, 2020, FHFA and 

the Enterprises announced that 

forbearance would be available to 

Enterprise-backed multifamily property 

owners on the condition that they 

suspend eviction of tenants struggling to 

pay rent due to the pandemic.49 On June 

29, 2020, FHFA announced that the 

Enterprises would offer extended 

forbearance agreements for multifamily 

property owners with existing 

forbearance agreements for up to three 

months, for a total forbearance of up to 

six months.50 Under the terms of the 

Enterprise forbearance agreements, 

while mortgage payments are in 

forbearance, the landlord must suspend 

all evictions for renters unable to pay 

rent and offer other protections for 

renters. This forbearance program was 

extended several times, with the most 

recent extension through September 30, 

2021.51 52 53 On May 4, 2020, the 

Enterprises published online 

multifamily property lookup tools so 

that tenants could determine if the 

multifamily property in which they 

reside has an Enterprise-backed 

mortgage and fell under the CARES 

Act’s 120-day eviction moratorium. On 

August 6, 2020, FHFA announced that 

multifamily property owners in new 

forbearance agreements must inform 

tenants in writing about tenant 

protections, and that the Enterprises are 

improving their online multifamily 

property loan lookup tools. 

FHFA expects the Enterprises to 

continue to demonstrate leadership in 

multifamily affordable housing lending 

by providing liquidity and supporting 

housing for tenants at different income 

levels in various geographic markets 

and in various market segments. 

Conservatorship limits on multifamily 

mortgage purchases (Conservatorship 

Scorecard cap) and other factors. 

Beginning in 2015, as conservator for 

the Enterprises, FHFA has set a yearly 

cap under the Conservatorship 

Scorecard that limits the total unpaid 

principal balance of multifamily loans 

that each Enterprise may purchase. The 

multifamily mortgage purchase cap 

furthers FHFA’s conservatorship goals 

of maintaining the presence of the 

Enterprises as a backstop for the 

multifamily finance market while not 

impeding the participation of private 

capital. These targets for the Enterprise 

purchase share of the multifamily 

origination market reflect what is 

generally considered by FHFA as an 

appropriate market share for the 

Enterprises during normal market 

conditions. To encourage the 

Enterprises to participate in purchasing 

loans financing properties in 

underserved multifamily market 

segments, from 2015 through 2019, 

FHFA excluded several categories of 

multifamily business from the cap. 

FHFA revised the cap structure in 

September 2019 by placing a cap on all 

multifamily loan purchases (no 

exclusions) and requiring a minimum 

amount of this capped amount to be for 

affordable and underserved market 

segments. The cap was set at $100 

billion for each Enterprise, a combined 

total of $200 billion, for the five-quarter 

period from the fourth quarter of 2019 

through the fourth quarter of 2020. In 

November 2020, FHFA announced the 

new multifamily loan purchase cap for 

the 2021 calendar year of $70 billion for 

each Enterprise, a combined total of 

$140 billion.54

The Conservatorship Scorecard cap 

applies to the entire multifamily 

business for each Enterprise without 

any exclusions. To ensure a strong focus 

on affordable housing and underserved 

markets, the 2021 Conservatorship 

Scorecard requires that at least 50 

percent of each Enterprises’ multifamily 


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Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 47413 

55Appendix A: Multifamily Definitions to the 

2021 Scorecard, November 17, 2020: https://

www.fhfa.gov/Media/PublicAffairs/PublicAffairs

Documents/2021-Appendix-A.pdf. 

56 2021 Scorecard for Fannie Mae, Freddie Mac, 

and Common Securitization Solutions, February 

2021: https://www.fhfa.gov/AboutUs/Reports/ 

ReportDocuments/2021-Scorecard.pdf. 

loan purchases be mission-driven, 

affordable housing. Multifamily loans 

considered to be mission-driven, 

affordable include: Subsidized/assisted 

affordable housing; manufactured 

housing communities; affordable units 

in small multifamily properties; 

affordable properties in rural areas; 

affordable units in seniors housing 

assisted living properties; and market 

rate units affordable to residents at or 

below 80 percent of AMI. Furthermore, 

the 2021 Conservatorship Scorecard 

requires that a minimum of 20 percent 

of Enterprise multifamily loan 

purchases be affordable to residents at 

60 percent of AMI or below. Multifamily 

loan purchases that meet the minimum 

20 percent requirement may also count 

as loan purchases that meet the 

minimum 50 percent requirement.55 56

In addition to the Conservatorship 

Scorecard cap, FHFA also incorporated 

the January 2021 PSPA requirements 

when determining appropriate 

multifamily benchmarks for 2022–2024. 

These requirements include a PSPA cap 

of $80 billion over the prior 52-week 

period, which is greater than the current 

Conservatorship Scorecard cap for 2021 

and places an upper bound on 

Enterprise share. FHFA will continue to 

review its estimates of market size and 

mission-driven requirements throughout 

the year. FHFA may take appropriate 

action to adjust the multifamily housing 

goals benchmark levels should changes 

to the Conservatorship Scorecard cap, 

the PSPAs, or other market conditions 

warrant an adjustment, whether in 2021 

or in future years. 

Maintaining the sound financial 

condition of the Enterprises. In setting 

the proposed multifamily housing goals 

benchmark levels, FHFA must balance 

the role that the Enterprises play in 

providing liquidity and supporting 

various multifamily mortgage market 

segments with the need to maintain the 

Enterprises in sound and solvent 

financial condition. The Enterprises 

have served as a stabilizing force in the 

multifamily mortgage market. During 

the conservatorship period, the 

Enterprises’ portfolios of loans on 

multifamily affordable housing 

properties have experienced low levels 

of delinquency and default, similar to 

the performance of multifamily loans on 

market rate properties. The Enterprises, 

therefore, should be able to sustain or 

increase their volume of purchases of 

loans on affordable multifamily housing 

properties without impacting the 

Enterprises’ safety and soundness or 

negatively affecting the performance of 

their total mortgage loan portfolios. 

FHFA continues to monitor the 

activities of the Enterprises in FHFA’s 

capacity as safety and soundness 

regulator and as conservator. If 

necessary, FHFA will make appropriate 

changes in the multifamily housing 

goals benchmark levels to ensure the 

Enterprises’ continued safety and 

soundness. 

B. Proposed Multifamily Housing Goals 

Benchmark Levels 

Based on FHFA’s consideration of the 

statutory factors described above and 

the performance of the Enterprises 

described in this section, the proposed 

rule would establish benchmark levels 

for the multifamily housing goals for the 

Enterprises, as further discussed below. 

Before finalizing the benchmark levels 

for the low-income and very lowincome multifamily goals in a final rule, 

FHFA will review any additional data 

that becomes available about the 

multifamily housing goals performance 

of the Enterprises through 2020, any 

additional information about the 

Conservatorship Scorecard cap for 2022 

that is available, and any other 

information about the multifamily 

mortgage market or other factors, along 

with any comments on the proposed 

multifamily housing goals benchmark 

levels. 

1. Multifamily Low-Income Housing 

Goal 

The multifamily low-income housing 

goal is based on the total number of 

rental units in multifamily properties 

financed by mortgages purchased by the 

Enterprises that are affordable to lowincome families, defined as families 

with incomes less than or equal to 80 

percent of AMI. 

Both Enterprises have exceeded the 

low-income multifamily housing goal by 

significant margins in recent years. 

Taking into account the Conservator 

Scorecard cap and PSPA limits, as well 

as the multifamily market conditions 

described above, FHFA is proposing to 

raise the multifamily low-income 

housing goal benchmark level to 

415,000 units for 2022–2024. This 

proposed benchmark level would be a 

significant increase over the benchmark 

level that has been in place since 2018. 

FHFA believes that this proposed 

increase is appropriate and achievable 

for the Enterprise in light of the past 

performance of the Enterprises on this 

housing goal and the current loan 

purchase volumes that would be 

permitted for the Enterprises under the 

applicable Conservatorship Scorecard 

cap and PSPA limits. 


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47414 Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 

2. Multifamily Very Low-Income 

Housing Subgoal 

The multifamily very low-income 

housing subgoal includes units 

affordable to very low-income families, 

defined as families with incomes no 

greater than 50 percent of AMI. 

Both Enterprises have exceeded the 

multifamily very low-income housing 

subgoal by significant margins in recent 

years. Taking into account the 

Conservator Scorecard cap and PSPA 

limits, as well as the multifamily 

mortgage market conditions described 

above, FHFA is proposing to raise the 

multifamily low-income housing 

subgoal benchmark level to 88,000 units 

for 2022–2024. This proposed 

benchmark level would be a significant 

increase over the benchmark level that 

has been in place since 2018. FHFA 

believes that this proposed increase is 

appropriate and achievable for the 

Enterprise in light of the past 

performance of the Enterprises on this 

housing subgoal and the current loan 

purchase volumes that would be 

permitted for the Enterprises under the 

applicable Conservatorship Scorecard 

cap and PSPA limits. 

3. Small Multifamily Low-Income 

Housing Subgoal 

The Enterprise housing goals 

regulation defines a small multifamily 

property as a property with 5 to 50 

units. The small multifamily lowincome housing subgoal is based on the 

total number of units in small 

multifamily properties financed by 

mortgages purchased by the Enterprises 

that are affordable to low-income 

families, defined as families with 

incomes less than or equal to 80 percent 

of AMI. 

This subgoal was created in the 2015– 

2017 housing goals rulemaking, and 

initially set at 6,000 units in 2015, 

gradually increasing to 10,000 units in 

2017. Monitoring trends in this 

multifamily market segment is 

challenging, and there is evidence that 

small multifamily properties were hit 

particularly hard in 2020 as a result of 

the pandemic. FHFA is proposing to 

raise the benchmark level for this 

subgoal to 23,000 units for 2022–2024. 

This proposed benchmark level would 

be a significant increase over the 

benchmark level that has been in place 

since 2018. FHFA believes that this 

proposed increase is appropriate and 

achievable for the Enterprise in light of 

the past performance of the Enterprises 

on this housing subgoal and the current 

loan purchase volumes that would be 

permitted for the Enterprises under the 

applicable Conservatorship Scorecard 

cap and PSPA limits. 


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Table 5. Multifamily Low-Income Housing Goal 

Performance 

Year 2014 2015 2016 2017 2018 2019 2020 

Fannie Mae Benchmark 250,000 300,000 300,000 300,000 315,000 315,000 315,000 

Freddie Mac Benchmark 200,000 300,000 300,000 300,000 315,000 315,000 315,000 

Fannie Mae Performance 

Low-Income Multifamily Units 262,050 307,510 352,368 401,145 421,813 385,763 441,m 

Total Multifamily Units 372,072 468,798 552,785 630,868 628,230 596,137 637,696 

Low-Income % Total 70.4% 65.6% 63.7"/o 63.6% 67.1% 64.7"/o 69.3% 

Freddie Mac Performance 

Low-Income Multifamily Units 273,434 379,042 406,958 408,096 474,062 455,451 473,338 

Total Multifamily Units 366,377 514,275 597,399 630,037 695,587 661,417 667,451 

Low-Income % of Total Units 74.6% 73.7"/o 68.1% 64.8% 68.2% 68.9% 70.9% 

Table 6. Multifamily Very Low-Income Subgoal 

Performance 

Year 2014 2015 2016 2017 2018 2019 2020 

Fannie Mae Benchmark 60,000 60,000 60,000 60,000 60,000 60,000 60,000 

Freddie Mac Benchmark 40,000 60,000 60,000 60,000 60,000 60,000 60,000 

Fannie Mae Performance 

Very Low-Income Multifamily Units 60,542 69,078 65,910 82,674 80,891 79,649 95,416 

Total Multifamily Units 372,072 468,798 552,785 630,868 628,230 596,137 637,696 

Very Low-Income% of Total Units 16.3% 14.7"/o 11.9% 13.1% 12.9% 13.4% 15.0% 

Freddie Mac Performance 

Very Low-Income Multifamily Units 48,689 76,935 73,030 92,274 105,612 112,773 107,105 

Total Home Purchase Mortgages 366,377 514,275 597,399 630,037 695,587 661,417 667,451 

Very Low-Income% of Total Units 13.3% 15.0% 12.2% 14.6% 15.2% 17.1% 16.0% 
Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 47415 

57These datasets can be accessed at: https://

www.fhfa.gov/DataTools/Downloads/Pages/ 

Underserved-Areas-Data.aspx. 

58 Individual Assistance Program and Policy 

Guide (IAPPG), Version 1.1, FP 104–009–03, May 

2021, page 4, accessible at https://www.fema.gov/ 

assistance/individual/program-policy-guide. 

59See 60 FR 61846 (Dec. 1, 1995). Prior to the 

creation of FHFA in 2008, HUD was responsible for 

mission oversight of Fannie Mae and Freddie Mac, 

including the affordable housing goals. 

VI. Section-by-Section Analysis of 

Other Proposed Changes 

The proposed rule would also revise 

other provisions of the Enterprise 

housing goals regulation, as discussed 

below. These proposed changes are nonsubstantive technical changes intended 

to conform the housing goals regulation 

text to FHFA’s established practices and 

procedures in implementing the 

housing goals. 

FHFA welcomes comments on these 

technical changes and any other 

technical changes or corrections that are 

necessary. FHFA may include 

additional technical changes or 

corrections in its final rule based on 

comments received. 

A. Definition of ‘‘Designated Disaster 

Area’’—Proposed § 1282.1 

Section 1282.1 of the current 

Enterprise housing goals regulation 

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 

FEMA, where individual assistance 

payments were authorized by FEMA.’’ 

While this definition accurately reflects 

the types of disasters that FHFA counts 

for purposes of calculating the disaster 

areas increment for the low-income 

areas housing goal, the definition does 

not reflect FHFA’s longstanding practice 

regarding the types of assistance 

covered. The proposed rule would 

revise the definition of ‘‘designated 

disaster area’’ to refer to major disasters 

‘‘where housing assistance payments 

were authorized by FEMA.’’ 

This proposed change to the 

definition of ‘‘designated disaster area’’ 

would be consistent with longstanding 

FHFA practice. Each year, FHFA 

identifies the areas that are considered 

‘‘designated disaster areas’’ for purposes 

of the Enterprise housing goals in a 

dataset published on FHFA’s website 

that can be used in conjunction with 

other information to determine whether 

mortgages purchased by an Enterprise 

would meet the criteria for the lowincome areas housing goal.57 In practice, 

FHFA’s identification of ‘‘designated 

disaster areas’’ for purposes of the 

Enterprise housing goals has been 

limited to areas that the Federal 

Emergency Management Agency 

(FEMA) has identified as eligible for 

‘‘housing assistance’’ under FEMA’s 

‘‘Individual and Households Program’’ 

(IHP). ‘‘Individual assistance’’ is an 

umbrella term used by FEMA that 

encompasses a variety of types of 

assistance in addition to housing 

assistance under FEMA’s IHP. 

‘‘Individual assistance’’ includes other 

types of assistance under FEMA’s IHP, 

as well as disaster case management, 

disaster legal services, and disaster 

unemployment assistance, among 

others.58 If FHFA included all areas for 

which individual assistance payments 

were authorized by FEMA, it would 

result in areas being included as 

‘‘designated disaster areas’’ where the 

relevant disaster did not have any 

significant direct impact on the physical 

housing stock. For example, if FHFA 

had included all areas that FEMA 

identified as eligible for ‘‘individual 

assistance’’ in 2020, every census tract 

in the United States would have been 

included as a ‘‘designated disaster area’’ 

for purposes of the housing goals in 

2020 due to assistance related to the 

COVID–19 pandemic. That outcome 

would have been inconsistent with the 

purposes of the low-income areas 

housing goal and with FHFA’s 

longstanding practice. To avoid this 

outcome and to clarify the regulation 

with respect to FHFA’s existing 

practice, the proposed rule would revise 

the definition of ‘‘designated disaster 

area’’ for purposes of the low-income 

areas housing goal to refer specifically 

to ‘‘housing assistance’’ rather than to 

the broader category of ‘‘individual 

assistance.’’ 

B. Newly Available Data—Proposed 

Removal of § 1282.15(i) 

Section 1282.15(i) of the current 

Enterprise housing goals regulation 

provides that an Enterprise is not 

required to use new data related to 

housing goals treatment of mortgages it 

purchases until the start of the quarter 

after it receives the data. This provision 

was adopted originally by the U.S. 

Department of Housing and Urban 

Development (HUD) in its 1995 final 

rule establishing housing goals under 

the Safety and Soundness Act.59

However, this provision does not reflect 

FHFA’s longstanding practice of 

independently calculating each 

Enterprise’s housing goals performance 

on the basis of data provided to FHFA 

by the Enterprise. For example, FHFA 

determines the AMIs applicable to each 

census tract on an annual basis and 

provides that information to the 

Enterprises in the first half of each year. 

However, in calculating Enterprise 

housing goals performance for that year, 

FHFA applies the new data to all 

mortgage purchases in that year. 

Accordingly, the proposed rule would 

remove § 1282.15(i) to avoid any 

implication that the housing goals 

regulation requires a particular method 

of calculating or applying affordability 

data such as AMIs. This proposed 

change is non-substantive and does not 

reflect or require any change in any of 


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Table 7. Small Multifamily Low-Income Subgoal 

Performance 

Year 2014 2015 2016 2017 2018 2019 2020 

Small Low-Income Multifamily Benchmaik 6,000 8,000 10,000 10,000 10,000 10,000 

Fannie Mae Performance 

Small Low-Income Multifamily Units 6,732 6,731 9,312 12,043 11,890 17,832 21,797 

Total Small Multifamily Units 11,880 11,198 15,211 20,375 17,894 25,565 36,880 

Low-Income % of Total Small Multifamily Units 56.7% 60.1% 61.2% 59.1% 66.4% 69.8"/o 59.1% 

Freddie Mac Performance 

Small Low-Income Multifamily Units 2,076 12,801 22,101 39,473 39,353 34,847 28,142 

Total Small Multifamily Units 4,659 21,246 33,984 55,116 53,893 46,879 41,263 

Low-Income % of Total Small Multifamily Units 44.6% 60.3% 65.0% 71.6% 73.0% 74.3% 68.2% 
47416 Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 

the processes or standards that FHFA 

uses to determine Enterprise housing 

goals performance each year. 

C. Loan Modifications—Proposed 

Removal of § 1282.16(c)(10) 

Section 1282.16(c)(10) of the current 

Enterprise housing goals regulation 

provides that the permanent 

modification of a mortgage under the 

Home Affordable Modification Program 

(HAMP) is counted as a refinancing for 

purposes of the low-income refinancing 

goal. Permanent loan modifications 

under HAMP are the only type of loan 

modification eligible for counting for 

purposes of the low-income refinancing 

goal. The HAMP modification program 

expired at the end of 2016. The 

proposed rule would remove 

§ 1282.16(c)(10) from the housing goals 

regulation as it is no longer necessary in 

light of the expiration of the HAMP 

modification program. 

VII. Paperwork Reduction Act 

The proposed rule would not contain 

any information collection requirement 

that would require the approval of the 

Office of Management and Budget 

(OMB) under the Paperwork Reduction 

Act (44 U.S.C. 3501 et seq.). Therefore, 

FHFA has not submitted the proposed 

rule to OMB for review. 

VIII. 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 proposed 

rule under the Regulatory Flexibility 

Act. FHFA certifies that the proposed 

rule, if adopted as a final rule, will not 

have a significant economic impact on 

a substantial number of small entities 

because the rule applies to Fannie Mae 

and Freddie Mac, which are not small 

entities for purposes of the Regulatory 

Flexibility Act. 

List of Subjects in 12 CFR Part 1282 

Mortgages, Reporting and 

recordkeeping requirements. 

Authority and Issuance 

For the reasons stated in the 

Preamble, under the authority of 12 

U.S.C. 4511, 4513, and 4526, FHFA 

proposes to amend part 1282 of Title 12 

of the Code of Federal Regulations as 

follows: 

CHAPTER XII—FEDERAL HOUSING 

FINANCE AGENCY 

SUBCHAPTER E—HOUSING GOALS 

AND MISSION 

PART 1282—ENTERPRISE HOUSING 

GOALS AND MISSION 

■ 1. The authority citation for part 1282 

continues to read as follows: 

Authority: 12 U.S.C. 4501, 4502, 4511, 

4513, 4526, 4561–4566. 

■ 2. Amend § 1282.1 by revising the 

definition of ‘‘Designated disaster area’’ 

to read as follows: 

§ 1282.1 Definitions. 

* * * * * 

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 housing 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 Enterprises. 

* * * * * 

■ 3. Amend § 1282.12 as follows: 

■ a. Revise paragraphs (c)(2), (d)(2), 

(e)(2), and (f); 

■ b. Redesignate paragraph (g) as 

paragraph (h); 

■ c. Add new paragraph (g); and 

■ d. Revise newly redesignated 

paragraph (h)(2). The revisions and 

additions read as follows: 

§ 1282.12 Single-family housing goals. 

* * * * * 

(c) * * * 

(2) The benchmark level, which for 

2022, 2023, and 2024 shall be 28 

percent of the total number of purchase 

money mortgages purchased by that 

Enterprise in each year that finance 

owner-occupied single-family 

properties. 

(d) * * * 

(2) The benchmark level, which for 

2022, 2023, and 2024 shall be 7 percent 

of the total number of purchase money 

mortgages purchased by that Enterprise 

in each year that finance owneroccupied single-family properties. 

(e) * * * 

(2) A benchmark level which shall be 

set annually by FHFA notice based on 

the sum of the benchmark levels for the 

low-income census tracts housing 

subgoal and the minority census tracts 

housing subgoal, plus an adjustment 

factor reflecting the additional 

incremental share of mortgages for 

moderate-income families in designated 

disaster areas in the most recent year for 

which such data is available. 

(f) Low-income census tracts housing 

subgoal. The percentage share of each 

Enterprise’s total purchases of purchase 

money mortgages on owner-occupied 

single-family housing that— 

(1) Consists of: 

(i) Mortgages in low-income census 

tracts that are not minority census 

tracts; and 

(ii) Mortgages for families with 

incomes in excess of 100 percent of the 

area median income in low-income 

census tracts that are also minority 

census tracts; 

(2) Shall meet or exceed either: 

(i) The share of such mortgages in the 

market as defined in paragraph (b) of 

this section in each year; or 

(ii) The benchmark level, which for 

2022, 2023, and 2024 shall be 4 percent 

of the total number of purchase money 

mortgages purchased by that Enterprise 

in each year that finance owneroccupied single-family properties. 

(g) Minority census tracts housing 

subgoal. The percentage share of each 

Enterprise’s total purchases of purchase 

money mortgages on owner-occupied 

single-family housing that consists of 

mortgages for moderate-income families 

in minority census tracts shall meet or 

exceed either: 

(1) The share of such mortgages in the 

market as defined in paragraph (b) of 

this section in each year; or 

(2) The benchmark level, which for 

2022, 2023, and 2024 shall be 10 

percent of the total number of purchase 

money mortgages purchased by that 

Enterprise in each year that finance 

owner-occupied single-family 

properties. 

(h) * * * 

(2) The benchmark level, which for 

2022, 2023, and 2024 shall be 26 

percent of the total number of 

refinancing mortgages purchased by that 

Enterprise in each year that finance 

owner-occupied single-family 

properties. 

■ 4. Amend § 1282.13 by revising 

paragraphs (b) through (d) to read as 

follows: 

§ 1282.13 Multifamily special affordable 

housing goal and subgoals. 

* * * * * 

(b) Multifamily low-income housing 

goal. The benchmark level for each 


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Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules 47417 

Enterprise’s purchases of mortgages on 

multifamily residential housing 

affordable to low-income families shall 

be at least 415,000 dwelling units 

affordable to low-income families in 

multifamily residential housing 

financed by mortgages purchased by the 

Enterprise in each year for 2022, 2023, 

and 2024. 

(c) Multifamily very low-income 

housing subgoal. The benchmark level 

for each Enterprise’s purchases of 

mortgages on multifamily residential 

housing affordable to very low-income 

families shall be at least 88,000 dwelling 

units affordable to very low-income 

families in multifamily residential 

housing financed by mortgages 

purchased by the Enterprise in each 

year for 2022, 2023, and 2024. 

(d) Small multifamily low-income 

housing subgoal. The benchmark level 

for each Enterprise’s purchases of 

mortgages on small multifamily 

properties affordable to low-income 

families shall be at least 23,000 dwelling 

units affordable to low-income families 

in small multifamily properties financed 

by mortgages purchased by the 

Enterprise in each year for 2022, 2023, 

and 2024. 

§ 1282.15 [Amended] 

■ 5. Amend § 1282.15 by removing 

paragraph (i). 

§ 1282.16 [Amended] 

■ 6. Amend § 1282.16 by removing and 

reserving paragraph (c)(10). 

Sandra L. Thompson, 

Acting Director, Federal Housing Finance 

Agency. 

[FR Doc. 2021–18008 Filed 8–24–21; 8:45 am] 

BILLING CODE 8070–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2021–0690; Project 

Identifier MCAI–2020–01495–E] 

RIN 2120–AA64 

Airworthiness Directives; Rolls-Royce 

Deutschland Ltd & Co KG (Type 

Certificate Previously Held by RollsRoyce plc) Turbofan Engines 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: The FAA proposes to adopt a 

new airworthiness directive (AD) for 

certain Rolls-Royce Deutschland Ltd. & 

Co KG (RRD) Trent 1000 model turbofan 

engines. This proposed AD was 

prompted by the manufacturer revising 

the engine Time Limits Manual (TLM) 

life limits of certain critical rotating 

parts and direct accumulation counting 

data files. This proposed AD would 

require the operator to revise the 

airworthiness limitation section (ALS) 

of their existing approved aircraft 

maintenance program (AMP) by 

incorporating the revised tasks of the 

applicable TLM for each affected model 

turbofan engine, as specified in a 

European Union Aviation Safety Agency 

(EASA) AD, which is proposed for 

incorporation by reference (IBR). The 

FAA is proposing this AD to address the 

unsafe condition on these products. 

DATES: The FAA must receive comments 

on this proposed AD by October 12, 

2021. 

ADDRESSES: You may send comments, 

using the procedures found in 14 CFR 

11.43 and 11.45, by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

https://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: (202) 493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue SE, Washington, DC 20590. 

• Hand Delivery: Deliver to Mail 

address above between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. 

For material that is proposed for IBR 

in this AD, contact EASA, KonradAdenauer-Ufer 3, 50668 Cologne, 

Germany; phone: +49 221 8999 000; 

email: ADs@easa.europa.eu; website: 

https://www.easa.europa.eu. You may 

find this material on the EASA website 

at https://ad.easa.europa.eu. For RRD 

service information identified in this 

NPRM, contact Rolls-Royce plc, 

Corporate Communications, P.O. Box 

31, Derby, DE24 8BJ, United Kingdom; 

phone: +44 (0)1332 242424 fax: +44 

(0)1332 249936; website: https://

www.rolls-royce.com/contact-us.aspx. 

You may view this service information 

at the FAA, Airworthiness Products 

Section, Operational Safety Branch, 

1200 District Avenue, Burlington, MA 

01803. For information on the 

availability of this material at the FAA, 

call (781) 238–7759. The EASA material 

is also available at https://

www.regulations.gov by searching for 

and locating Docket No. FAA–2021– 

0690. 

Examining the AD Docket 

You may examine the AD docket at 

https://www.regulations.gov by 

searching for and locating Docket No. 

FAA–2021–0690; or in person at Docket 

Operations between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. The AD docket contains this 

NPRM, the EASA AD, any comments 

received, and other information. The 

street address for Docket Operations is 

listed above. 

FOR FURTHER INFORMATION CONTACT: 

Kevin M. Clark, Aviation Safety 

Engineer, ECO Branch, FAA, 1200 

District Avenue, Burlington, MA 01803; 

phone: (781) 238–7088; fax: (781) 238– 

7199; email: kevin.m.clark@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

The FAA invites you to send any 

written relevant data, views, or 

arguments about this proposal. Send 

your comments to an address listed 

under ADDRESSES. Include ‘‘Docket No. 

FAA–2021–0690; Project Identifier 

MCAI–2020–01495–E’’ at the beginning 

of your comments. The most helpful 

comments reference a specific portion of 

the proposal, explain the reason for any 

recommended change, and include 

supporting data. The FAA will consider 

all comments received by the closing 

date and may amend this proposal 

because of those comments. 

Except for Confidential Business 

Information (CBI) as described in the 

following paragraph, and other 

information as described in 14 CFR 

11.35, the FAA will post all comments 

received, without change, to https://

www.regulations.gov, including any 

personal information you provide. The 

agency will also post a report 

summarizing each substantive verbal 

contact received about this NPRM. 

Confidential Business Information 

CBI is commercial or financial 

information that is both customarily and 

actually treated as private by its owner. 

Under the Freedom of Information Act 

(FOIA) (5 U.S.C. 552), CBI is exempt 

from public disclosure. If your 

comments responsive to this NPRM 

contain commercial or financial 

information that is customarily treated 

as private, that you actually treat as 

private, and that is relevant or 

responsive to this NPRM, it is important 

that you clearly designate the submitted 

comments as CBI. Please mark each 

page of your submission containing CBI 

as ‘‘PROPIN.’’ The FAA will treat such 

marked submissions as confidential 

under the FOIA, and they will not be 

placed in the public docket of this 


khammond on DSKJM1Z7X2PROD with PROPOSALS