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Latest Duty to Serve plans are a noticable difference, affordable housing coalition says

A coalition of 21 affordable housing groups on Wednesday said Fannie Mae and Freddie Mac made important improvements with their plans to provide housing financing in underserved markets, but nonetheless have a methods to go.

The Underserved Mortgage Markets Coalition, which include the Center for Community Progress, theNational Housing Conference, theNational Council of State Housing Agencies, theNational Community Stabilization Trustand theLincoln Institute of Land Policy, on Wednesday released its scorecard on the government-sponsored enterprises 2022-2024 Duty to Serve plans, that have been produced on April 27 following the prior plans were rejected by Sandra Thompson, the FHFA director.

The federal regulation requires that the GSEs prioritize and improve affordable housing opportunities linked to manufactured housing, affordable housing preservation and rural housing.

The scorecard recognizes significant improvement in the most recent plans weighed against the versions released per year earlier, the UMMC, that is spearheaded by the Lincoln Institute, said in a statement Wednesday. However, the scorecard finds that Fannie Mae and Freddie Mac didn’t fully implement most the improvements recommended in theBlueprint for ImpactfulDutytoServePlans, that your UMMC released January 20.

In October 2021, affordable housing groups heavily criticized the GSEs for wanting to eliminate programs to get chattel loans and for reducing loan targets for manufactured housing, affordable housing preservation and rural housing.

Affordable housing advocates specifically have sought a stronger commitment from the GSEs on manufactured housing. On that front, the scorecard presents a mixed grade for the enterprises.

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Neither Fannie Mae nor Freddie Mac is substantially increasing its commitment to greatly help manufactured housing homeowners obtain real property loans, the UMMC said in its scorecard, noting that Fannie Mae is targeting the purchase of 9,500 real property loans for manufactured housing by 2024 and Freddie Mac is targeting between 6,300 and 7,500. Those targets flunk of prior years. Fannie Maes 2021 target was 12,650 loans, and Freddie Macs 2021 target was 8,200 loans.

Freddie Mac, however, decided to a pilot program to get between 1,500 and 2,500 manufactured homes not titled as real property, better referred to as chattel loans, which will make up 42% of the manufactured housing marketplace. Those loans generally have fewer consumer protections than mortgages and higher interest levels. Fannie Mae have not yet focused on buying chattel loans, that your coalition encouraged.

The scorecard for rural housing finance was also mixed. Fannie Mae met the UMMCs recommendation of 13 loans linked to Section 515 property investment, an integral financing program for rental housing in rural areas. Freddie Mac projects to create four transactions by 2024, below the UMMCs recommendation of 13.

The USDA anticipates 183 Section 515 properties will exit this program between 2022- 2024, the UMMC said. Fannie Maes significant loan purchase will substantially preserve affordability for rural renters. Freddie Macs lower targets can do significantly less to mitigate the increased loss of affordable housing.

Neither of the GSEs adopted the UMMCs recommendation to focus on 10% of these loan purchase to low- and moderate-income families in areas with high energy cost burdens.

However, both made some improvements linked to single-family affordable housing preservation targets, notably in loan purchases for shared equity homes.

Fannie Mae increase loan purchases for borrowers of shared equity homes by 100% above its baseline by 2024 and is attempting to update its Selling Guide to market standardization, the UMMC said. Freddie Mac also updated its selling guide and is considering methods to increase lender participation.

In a statement, the UMMC said it hopes that both companies will continue to work collaboratively to amend their DTS plans so the UMMC can issue an updated DTS scorecard with higher scores.

In response, Fannie Mae on Wednesday said it appreciates UMMCs continued fascination with our DTS plan and the task we’ve underway to accomplish our objectives. We anticipate our continued engagement with the UMMC members, other industry stakeholders, and our business partners to supply innovative answers to expand access, explore options, and knock down barriers in these underserved markets in the united states and help more families have an inexpensive spot to call home.

Freddie Mac responded: Freddie Mac appreciates the input of stakeholders once we work toward the objectives established inside our Duty to Serve plan. The program builds on our first three-year initiative with ambitious but appropriate targets. We have been continually evaluating what opportunities exist to accomplish more to get underserved markets.

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