FHFA Issues Rule for Enterprise Duty to Serve Underserved Markets
December 29, 216, the Federal Housing Finance Agency (FHFA) published the rule, Enterprise Duty to Serve Underserved Markets in Federal Register Vol. 81, No 250. The Housing and Economic Recovery Act of 2008 (HERA) amended the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act) to establish a duty for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises) to serve three specified underserved markets in order to increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for very low-, low-, and moderate-income families in those markets. The three markets include:
- Manufactured housing
- Affordable housing preservation
- Rural markets
The Federal Housing Finance Agency is issuing this final rule which specifies the scope of Enterprise activities that are eligible to receive Duty to Serve credit. These activities generally are those that facilitate a secondary market for mortgages related to:
- Manufactured homes titled as real property or personal property;
- Blanket loans for certain categories of manufactured housing communities;
- Preserving the affordability of housing for renters and homebuyers; and
- Housing in rural markets.
The final rule provides a framework for FHFA’s method for evaluating and rating the Enterprises’ compliance with the Duty to Serve each underserved market. The final rule is effective January 30, 2017.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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