Proposed Rule2022-17868
2023-2024 Multifamily Enterprise Housing Goals
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 18, 2022
Issuing agencies
Federal Housing Finance Agency
Abstract
The Federal Housing Finance Agency (FHFA or the Agency) is issuing a proposed rule with request for comments on the multifamily housing goals for Fannie Mae and Freddie Mac (the Enterprises) for 2023 and 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. Under FHFA's existing housing goals regulation, the multifamily housing goals for the Enterprises include benchmark levels through the end of 2022 based on the total number of affordable units in multifamily properties financed by mortgage loans purchased by the Enterprise each year. This proposed rule would amend the regulation to establish benchmark levels for the multifamily housing goals for 2023 and 2024 based on a new methodology--the percentage of affordable units in multifamily properties financed by mortgages purchased by the Enterprise each year.
Full Text
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<title>Federal Register, Volume 87 Issue 159 (Thursday, August 18, 2022)</title>
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[Federal Register Volume 87, Number 159 (Thursday, August 18, 2022)]
[Proposed Rules]
[Pages 50794-50803]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-17868]
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FEDERAL HOUSING FINANCE AGENCY
12 CFR Part 1282
RIN 2590-AB21
2023-2024 Multifamily Enterprise Housing Goals
AGENCY: Federal Housing Finance Agency.
ACTION: Proposed rule.
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SUMMARY: The Federal Housing Finance Agency (FHFA or the Agency) is
issuing a proposed rule with request for comments on the multifamily
housing goals for Fannie Mae and Freddie Mac (the Enterprises) for 2023
and 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. Under FHFA's existing housing goals regulation, the
multifamily housing goals for the Enterprises include benchmark levels
through the end of 2022 based on the total number of affordable units
in multifamily properties financed by mortgage loans purchased by the
Enterprise each year. This proposed rule would amend the regulation to
establish benchmark levels for the multifamily housing goals for 2023
and 2024 based on a new methodology--the percentage of affordable units
in multifamily properties financed by mortgages purchased by the
Enterprise each year.
DATES: FHFA will accept written comments on the proposed rule on or
before October 17, 2022.
ADDRESSES: You may submit your comments on the proposed rule,
identified by regulatory information number (RIN) 2590-AB21, by any one
of the following methods:
<bullet> Agency Website: <a href="http://www.fhfa.gov/open-for-comment-or-input">www.fhfa.gov/open-for-comment-or-input</a>.
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
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 <a href="/cdn-cgi/l/email-protection#d381b6b490bcbebeb6bda7a093b5bbb5b2fdb4bca5"><span class="__cf_email__" data-cfemail="2a784f4d694547474f445e596a4c424c4b044d455c">[email protected]</span></a> to ensure timely receipt by FHFA.
Include the following information in the subject line of your
submission: Comments/RIN 2590-AB21.
<bullet> Hand Delivered/Courier: The hand delivery address is:
Clinton Jones, General Counsel, Attention: Comments/RIN 2590-AB21,
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.
<bullet> 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-AB21, 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 and Community Investment, Division of Housing Mission and
Goals, (202) 649-3157, <a href="/cdn-cgi/l/email-protection#510534357f06302325343d3d11373937307f363e27"><span class="__cf_email__" data-cfemail="d98dbcbdf78eb8abadbcb5b599bfb1bfb8f7beb6af">[email protected]</span></a>; Padmasini Raman,
Supervisory Policy Analyst, Housing and Community Investment, Division
of Housing Mission and Goals, (202) 649-3633, <a href="/cdn-cgi/l/email-protection#a6f6c7c2cbc7d5cfc8cf88f4c7cbc7c8e6c0cec0c788c1c9d0"><span class="__cf_email__" data-cfemail="9acafbfef7fbe9f3f4f3b4c8fbf7fbf4dafcf2fcfbb4fdf5ec">[email protected]</span></a>;
Kevin Sheehan, Associate General Counsel, Office of General Counsel,
(202) 649-3086, <a href="/cdn-cgi/l/email-protection#6f240a190601413c070a0a070e012f0907090e41080019"><span class="__cf_email__" data-cfemail="733816051a1d5d201b16161b121d33151b15125d141c05">[email protected]</span></a>. These are not toll-free
numbers. The mailing address is: Federal Housing Finance Agency, 400
Seventh Street SW, Washington, DC 20219. For TTY/TRS users with hearing
and speech disabilities, dial 711 and ask to be connected to any of the
contact numbers above.
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
[[Page 50795]]
FHFA's public website at <a href="http://www.fhfa.gov">http://www.fhfa.gov</a>. 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 multifamily housing goals
benchmark levels and the proposed new multifamily housing goals
methodology based on the percentage of affordable units in multifamily
properties financed by mortgages purchased by the Enterprise each year.
II. Background
A. Statutory and Regulatory Background for the Housing Goals
The Safety and Soundness Act requires FHFA to establish several
annual housing goals for both single-family and multifamily mortgages
purchased by the Enterprises.\1\ The achievement of the annual housing
goals is one measure of the extent to which the Enterprises are meeting
their public purposes, which include ``an affirmative obligation to
facilitate the financing of affordable housing for low- and moderate-
income families in a manner consistent with their overall public
purposes, while maintaining a strong financial condition and a
reasonable economic return.'' \2\
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\1\ See 12 U.S.C. 4561(a).
\2\ See 12 U.S.C. 4501(7).
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Since 2010, FHFA has established annual housing goals for
Enterprise purchases of both single-family and multifamily mortgages by
rulemaking, consistent with the requirements of the Safety and
Soundness Act. FHFA's most recent rule, issued in December 2021,
amended the housing goals regulation to establish benchmark levels for
the single-family housing goals for 2022 through 2024 and benchmark
levels for the multifamily housing goals for 2022 only.\3\ FHFA
established the multifamily housing goals for a single year in response
to the uncertainty in housing markets associated with COVID-19 and the
potential for unforeseen changes to multifamily market conditions in
2023 and 2024. FHFA also considered comment letters submitted in
response to the 2021 proposed rule that urged the Agency to establish
one- or two-year multifamily goal benchmark levels, in part due to
those same factors.
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\3\ See 86 FR 73641 (December 28, 2021).
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B. Adjusting the Housing Goals
If, after publication of the final rule establishing the
multifamily housing goals for 2023 and 2024, FHFA determines that any
of the single-family or multifamily housing goals or subgoals 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 the goal(s) such
as reducing the benchmark level(s) through the processes in the
existing regulation. FHFA may also 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 or subgoals in a particular year
based on a determination by FHFA that: (1) market and economic
conditions or the financial condition of the Enterprise require a
reduction; or (2) efforts to meet the goal or subgoal would result in
the constraint of liquidity, over-investment in certain market
segments, or other consequences contrary to the intent of the Safety
and Soundness Act or the purposes of the Enterprises' charter acts.\4\
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\4\ See 12 CFR 1282.14(d).
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The Safety and Soundness Act and the Enterprise housing goals
regulation also take into account the possibility that achievement of a
particular housing goal or subgoal may or may not have been feasible
for an Enterprise to achieve. If FHFA determines that a housing goal or
subgoal was not feasible for an Enterprise to achieve, then the statute
and regulation provide for no further enforcement of that housing goal
or subgoal for that year.\5\
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\5\ See 12 CFR 1282.21(a); 12 U.S.C. 4566(b).
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If FHFA determines that an Enterprise failed to meet a housing goal
or subgoal and that achievement of the housing goal or subgoal 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 or subgoals performance.
The actions described in this section provide some flexibility for
FHFA to respond to new information or developments that occur after
publication of the final rule. The new methodology proposed here and
discussed further below, which would set the benchmark levels as a
percentage share of goal-eligible units backing mortgages acquired by
each Enterprise, could reduce the likelihood that FHFA will be required
to modify the benchmark levels in response to unexpected market
developments after publication of the final rule.
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. Proposed Change in Methodology for Measuring the Multifamily
Housing Goals
Since publication of the December 2021 final housing goals rule,
FHFA has considered alternative ways to measure Enterprise performance
on the multifamily housing goals. As a result, FHFA is now proposing
multifamily housing goals for both 2023 and 2024 that would measure
Enterprise performance as the percentage of affordable units in
multifamily properties financed by mortgages purchased by the
Enterprises, rather than using the current methodology of measuring
performance based on the absolute number of affordable units in the
properties. The requirements for determining which multifamily mortgage
purchases are counted, or not counted, continue to be defined in the
existing housing goals regulation and this proposed rule would not make
any changes to those requirements. This proposed rule specifically
requests comment on the proposed new methodology for measuring
Enterprise performance on the multifamily housing goals, as well as on
the proposed benchmark levels for 2023 and 2024 under this new
methodology.
The multifamily goals, as defined under the Safety and Soundness
Act, include categories for mortgages on multifamily properties
(properties with five or more dwelling 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
[[Page 50796]]
includes a small multifamily low-income subgoal for properties with 5
to 50 units. Under the current regulation, the performance of the
Enterprises on the multifamily goals is evaluated based on the number
of affordable units in properties backing mortgages purchased by an
Enterprise.
Under the proposed rule, the Enterprises would continue to report
on the number of multifamily units acquired each year, including data
on units that are affordable to low-income households, very low-income
households, and low-income households in small multifamily properties.
In order to meet each of the multifamily goals, each Enterprise would
be required to ensure that the percentage of units that are affordable
meets or exceeds the benchmark level. By changing to a percentage share
of the total multifamily units in properties securing goal-eligible
mortgages acquired by each Enterprise in a year, the proposed
multifamily housing goals would adjust automatically to the volume of
the Enterprise's multifamily business each year, while ensuring that
each Enterprise's focus remains on affordable segments.
FHFA is not proposing any changes to the current rules in
Sec. Sec. 1282.13, 1282.15, and 1282.16 of the Enterprise housing
goals regulation for determining which multifamily mortgages are
eligible to be counted towards the goals, and of those, which meet the
affordability criteria. FHFA is proposing technical revisions to Sec.
1282.15 to reflect the new proposed methodology. Section 1282.15(c)
would be revised to express the percentage of affordable units in
multifamily properties financed by mortgages purchased by the
Enterprises in terms of a defined numerator and denominator. Proposed
Sec. 1282.15(c) would mirror the description of the single-family
housing goals that currently exists in Sec. 1282.15(a), which already
measures the single-family housing goals as percentages.
In addition, proposed Sec. 1282.15(e)(3) would clarify the
treatment of rental units with missing affordability information. Under
the current regulation, an Enterprise is permitted to estimate the
affordability of such units, up to a maximum of 5 percent of the total
number of rental units in properties securing multifamily mortgages
purchased by the Enterprise in the current year. Rental units with
missing affordability information are not counted for purposes of the
multifamily housing goals to the extent that the number of such units
exceeds the nationwide maximum of 5 percent. Rental units also are
excluded if it is not possible to estimate the affordability of such
units. The proposed rule would clarify that under the new methodology,
any units with missing affordability information in excess of the 5
percent nationwide maximum would be excluded from the numerator of the
multifamily goals but would be included in the denominator. This
treatment would be consistent with the objective of the current
regulation to encourage the Enterprises to obtain affordability
information whenever possible. The proposed rule would exclude rental
units with missing affordability information from both the numerator
and the denominator if it is not possible to estimate the affordability
of such units. This treatment would reflect the fact that the
availability of information needed to estimate affordability is outside
the control of the Enterprises.
In this preamble, ``goal-eligible units'' is used as a synonym for
``denominator,'' to refer to all dwelling units that are financed by
mortgage purchases that could be counted for purposes of the
multifamily housing goals and subgoals. ``Goal-qualifying units'' is
used as a synonym for ``numerator,'' to refer to the goal-eligible
units that meet the respective affordability requirements of each
multifamily goal.\6\ The counting rules in Sec. 1282.16(b) exclude
certain types of mortgages from eligibility for housing goals credit,
such as multifamily mortgages with federal guarantees and subordinate
lien multifamily mortgages. FHFA specifically requests comment on
whether any other changes to the existing rules for counting
multifamily mortgages should be made to address any unintended
interactions that the proposed change to the methodology for measuring
the multifamily housing goals might have on the market or affordable
market segments.
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\6\ See 12 CFR 1282.15(c).
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The proposed change to the methodology would address recurring
issues that arise under the existing housing goals structure. Under the
current methodology, FHFA sets the multifamily housing goal benchmark
levels based on the absolute number of units in properties securing
goal-eligible mortgages that the Enterprise acquire in order to meet
the benchmark levels. This requires FHFA to be able to forecast the
multifamily market and the Enterprise volume of multifamily mortgage
purchases when setting the benchmark levels. Attempting to forecast
multifamily market conditions and Enterprise purchase volumes three or
four years into the future is an exceedingly difficult exercise, made
even more complicated by the lack of a comprehensive dataset of
multifamily loan origination volume similar to the Home Mortgage
Disclosure Act (HMDA) data available for the single-family mortgage
market. Under the proposed new methodology, FHFA would set the
benchmark levels as a percentage share of the goal-eligible units in
properties securing mortgages acquired by each Enterprise in a year.
This would encourage the Enterprises to continue focusing on serving
low-income renter families in a prudent and deliberate manner within
the context of their loan acquisitions. The proposed new percentage-
based benchmark levels would also mean that the absolute number of
affordable units needed to meet each of the housing goals each year
would adjust automatically based on the Enterprise's multifamily loan
purchase volume and reflect actual multifamily market conditions, as
the number of goal-qualifying units needed would scale up or down in
proportion with Enterprise loan acquisitions. Operationally, the
proposed change to the methodology would have minimal impact as it
would not change the existing counting rules, reporting requirements,
or definitions used for the housing goals in the housing goals
regulation.
Setting the multifamily goal benchmark levels as the percentage of
affordable units among all goal-eligible units backing mortgages
acquired by the Enterprise is consistent with the percentage-based
methodology followed for the single-family housing goals and should be
familiar to both Enterprises and external stakeholders. The proposed
change in methodology would continue to allow FHFA to track, report,
and verify data on multifamily units backing mortgages purchased by the
Enterprises, including data on affordable units by income level.
Although FHFA believes the proposed change to the methodology for
measuring the multifamily housing goals will make the multifamily
housing goals more responsive to market conditions and minimize
operational impact on FHFA and the Enterprises, FHFA recognizes that
there may be some drawbacks associated with the proposed change. For
example, by setting the benchmark levels as a percentage share of goal-
eligible units, the benchmark levels will no longer specify a minimum
number of affordable units backing mortgages acquired by the
Enterprises.
However, there are a number of other factors that support the
proposed change to percentage-based multifamily
[[Page 50797]]
housing goals. For example, the existing methodology for measuring the
multifamily housing goals does not incentivize or require that an
Enterprise continue to acquire mortgages backed by goal-qualifying
units after the Enterprise has purchased enough mortgages to meet the
minimum numeric benchmark levels. The proposed percentage-based
benchmark levels would require the Enterprises to continue to support
the affordable segment of the market as their mortgage acquisitions
increase, rather than potentially reducing their focus on supporting
affordable multifamily properties once the minimum numeric benchmark
levels are achieved.
Furthermore, the proposed change in methodology for measuring the
multifamily housing goals would help address concerns raised in a
number of comment letters received in response to the 2022-2024
Enterprise housing goals proposed rule published in August 2021.\7\
FHFA received several comment letters suggesting that the Agency create
and implement an alternative multifamily goal structure. A trade
association proposed an alternative goal structure to align the
multifamily housing goals, the Conservatorship Scorecard cap on
multifamily volume, which includes requirements for supporting
affordable multifamily properties, and limits on multifamily lending
under the January 14, 2021 letter agreements amending the Preferred
Stock Purchase Agreements (PSPAs) \8\ into a single set of standards,
as these three standards are not aligned and measure Enterprise
multifamily loan purchase performance differently. A policy advocacy
group similarly suggested aligning the multifamily housing goals with
the Conservatorship Scorecard requirements for supporting affordable
multifamily properties, stating that fixed-unit goals do not vary based
on the actual size of the market and could lead the Enterprises to
stretch to meet the goals, particularly in an inflationary or rising
interest rate environment. Another trade association commented that
fixed-unit goals require periodic adjustment to incorporate unknown
market factors, can become disjointed from actual market conditions,
and can incentivize erratic Enterprise competitive behavior. In
addition to the comments received in response to the 2022-2024 proposed
rule, FHFA has received comments in response to prior rulemakings
suggesting that the multifamily goals should be flexible based on
market dynamics.\9\
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\7\ See comments received in response to the 2022-2024
Enterprise Housing Goals Proposed Rule, 86 FR 47398 (August 25,
2021), <a href="https://www.fhfa.gov/SupervisionRegulation/Rules/Pages/Comment-List.aspx?RuleID=706">https://www.fhfa.gov/SupervisionRegulation/Rules/Pages/Comment-List.aspx?RuleID=706</a>.
\8\ FHFA announced on September 14, 2021, that certain
provisions of the January 14, 2021 letter agreements, including the
limits on multifamily lending, were being suspended pending further
review. See FHFA Press Release, ``FHFA and Treasury Suspending
Certain Portions of the 2021 Preferred Stock Purchase Agreements,''
<a href="https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-and-Treasury-Suspending-Certain-Portions-of-the-2021-Preferred-Stock-Purchase-Agreements.aspx">https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-and-Treasury-Suspending-Certain-Portions-of-the-2021-Preferred-Stock-Purchase-Agreements.aspx</a>.
\9\ See comments received in response to the 2015-2017
Enterprise Housing Goals Proposed Rule, 79 FR 54481 (September 11,
2014), <a href="https://www.fhfa.gov/SupervisionRegulation/Rules/Pages/Comment-List.aspx?RuleID=498">https://www.fhfa.gov/SupervisionRegulation/Rules/Pages/Comment-List.aspx?RuleID=498</a>.
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FHFA specifically requests comment on the proposal to change the
methodology for measuring the multifamily housing goals from a fixed
number of goal-qualifying units to a goal-qualifying percentage share
of all goal-eligible units, as well as any other changes that might be
appropriate if a change to percentage-based multifamily housing goals
is adopted in the final rule.
IV. Multifamily Housing Goals
A. Factors Considered for the Proposed Multifamily Housing Goal
Benchmark Levels
In proposing benchmark levels for the multifamily housing goals for
2023 and 2024, FHFA has considered the statutory factors outlined in
section 1333(a)(4) of the Safety and Soundness Act. The statutory
factors are:
1. National multifamily mortgage credit needs and the ability of
the Enterprises to provide additional liquidity and stability for
the multifamily mortgage market;
2. The performance and effort of the Enterprises in making
mortgage credit available for multifamily housing in previous years;
3. The size of the multifamily mortgage market for housing
affordable to low-income and very low-income families, including the
size of the multifamily markets for housing of a smaller or limited
size;
4. The ability of the Enterprises to lead the market in making
multifamily mortgage credit available, especially for multifamily
housing affordable to low-income and very low-income families;
5. The availability of public subsidies; and
6. The need to maintain the sound financial condition of the
Enterprises.\10\
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\10\ See 12 U.S.C. 4563(a)(4).
This section analyzes key data related to several of the factors
that impact each of the multifamily goals, including the overall
economic outlook, multifamily mortgage market conditions, affordability
concerns in the multifamily mortgage market, the role of the
Enterprises in supporting the multifamily mortgage market, and the need
to maintain the sound financial condition of the Enterprises. The
following sections include additional analysis specific to each
multifamily goal and subgoal, including data on the past performance of
the Enterprises and the size of the market for each multifamily goal
and subgoal.
Overall economic 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
housing goals. FHFA will continue to monitor the affordable housing
market and take these factors into account when considering the
feasibility of the goals.
On June 15, 2022, the Federal Reserve noted that despite recent
strong job gains and a low unemployment rate, inflation remains
elevated.\11\ The Federal Reserve noted that the invasion of Ukraine by
Russia and related events are causing additional upward pressure on
inflation and affecting global economic activity. The Federal Reserve
added that COVID-19 pandemic-related lockdowns in China are likely to
worsen supply chain disruptions. In an effort to achieve maximum
employment and inflation of 2 percent in the long run, the Federal Open
Market Committee (FOMC) raised its target range for the federal funds
rate to 1.5 percent to 1.75 percent, with plans to increase the target
range as appropriate until its goals are achieved.\12\
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\11\ See <a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20220615a.htm">https://www.federalreserve.gov/newsevents/pressreleases/monetary20220615a.htm</a>.
\12\ Ibid.
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Interest rates are very important determinants of mortgage market
trajectory. Moody's May 2022 consensus forecast projects that 30-year
fixed-rate mortgage interest rates will rise from an annual average
rate of 3.0 percent in 2021 to 4.8 percent in 2022, then stabilize at
4.9 percent in 2023 and 2024. As of June 16, 2022, the weekly average
rate for a 30-year fixed-rate mortgage was 5.78 percent.\13\ Moody's
forecast also projects that the unemployment rate will be 3.6 percent
from 2022 to 2024. In addition, Moody's projects a modest increase in
per capita disposable nominal income growth--from $55,700 in 2021 to
$61,400 in 2024. Furthermore, Moody's forecast estimates that the
annual average inflation rate will decline from a projected 40-year
high of 6.9 percent in 2022 to 2.2 percent in 2024. The year-over-year
inflation rate for May 2022 was 8.6 percent.\14\
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\13\ See <a href="https://www.freddiemac.com/pmms/docs/historicalweeklydata.xls">https://www.freddiemac.com/pmms/docs/historicalweeklydata.xls</a>.
\14\ See <a href="https://data.bls.gov/timeseries/CUUR0000SA0&output_view=pct_12mths">https://data.bls.gov/timeseries/CUUR0000SA0&output_view=pct_12mths</a>.
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[GRAPHIC] [TIFF OMITTED] TP18AU22.002
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 low-
income families. In July 2022, the Mortgage Bankers Association (MBA)
forecast that multifamily mortgage originations would decline from the
2021 record of $487 billion to $436 billion in 2022, and would rise to
$454 billion in 2023.\15\
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\15\ See <a href="https://www.mba.org/news-and-research/newsroom/news/2022/07/19/higher-rates-economic-uncertainty-to-slow-commercial-multifamily-lending-in-the-second-half-of-2022">https://www.mba.org/news-and-research/newsroom/news/2022/07/19/higher-rates-economic-uncertainty-to-slow-commercial-multifamily-lending-in-the-second-half-of-2022</a>.
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Rising interest rates, rising rent growth, and the decline of
alternative real estate investment opportunities such as commercial and
retail lending during the pandemic have resulted in an influx of new
market participants and competition in the multifamily market. Renewed
interest from debt funds and other institutional investors in the
multifamily market has created additional competition for the
Enterprises, particularly around their ability to compete for
multifamily affordable deals.
Low vacancy rates in the multifamily market pushed rents upwards in
2021. Based on the nationwide CoStar data, on a year-over-year basis,
rent growth increased sharply from less than 1 percent in 2020 during
the COVID-19 pandemic to 11.3 percent in 2021.\16\ CoStar's 2022 Q1
Base Case forecast projects national rent growth to be 6.6 percent in
2022, then slow down to 3.5 percent by 2024. While rent increases were
most significant for 4 & 5 Star properties, which had a rent increase
of 13.9 percent in 2021, the more affordable buildings also experienced
significant rent increases.\17\ For example, 3 Star building rents
increased by 11.7 percent in 2021, and are projected to increase by
still-strong 6.7 percent in 2022, and by 5.2 percent and 3.5 percent in
the following two years, respectively. In addition, 1 & 2 Star building
rent growth is forecast to rise from a two-decade high of 5.2 percent
in 2021 to 5.7 percent in 2022, and remain high at 5.1 percent in 2023.
The 1 & 2 Star building rents are forecast to grow by 3.6 percent in
2024.
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\16\ FHFA tabulations of CoStar data.
\17\ CoStar building ratings definitions are available at
<a href="https://www.costar.com/docs/default-source/brs-lib/costar_buildingratingsystem-definition.pdf">https://www.costar.com/docs/default-source/brs-lib/costar_buildingratingsystem-definition.pdf</a>.
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Vacancy rates are expected to remain low through 2024, only
increasing from 4.8 percent in 2021 to 5.3 percent in 2023 then
slightly declining to 5.2 percent in 2024. As with rents, this
tightening can be observed in all building classes, including the more
affordable segments. Vacancies in 3 Star properties are forecast to
expand from 4.3 percent in 2021 to 4.9 percent in 2023, then decline to
4.6 percent in 2024, while 1 & 2 Star property vacancies are expected
to rise from a very tight 3.8 percent in 2021 to 4.1 percent in 2024.
The path for these various economic trends is uncertain, and
whether the projected trends materialize remains to be seen. In this
context, the Federal Reserve's monetary policy, other domestic economic
policies, and developments in the global economy will also have an
impact on the multifamily mortgage market.
Affordability in the multifamily mortgage market. There are several
factors that impact the affordable share of the multifamily mortgage
market in any given year, such as the overall multifamily mortgage
market origination volume, competition between purchasers of mortgages
within the affordable multifamily mortgage market segment, and the
availability of affordable housing subsidies.
The Safety and Soundness Act requires FHFA to determine
affordability for purposes of the Enterprise housing goals based on a
family's rent and utility expenses not exceeding 30 percent of area
median income (AMI).\18\ Using this measure, affordability for families
living in rental units has decreased in recent years for many families.
The Joint Center for Housing Studies of Harvard University's (JCHS)
State of the Nation's Housing Report 2022 noted the growing presence of
cost-burdened renters in certain income segments.\19\ The report shows
that the share of cost-burdened renters rose by 2.6 percent--from 43.6
percent in 2019 to 46.2 percent in 2020.\20\ The report states that
82.6 percent of renters earning less than $15,000 and 77.9 percent of
renters earning between $15,000 and $29,999 were cost-burdened in 2020.
The share of cost-burdened renters earning between $30,000 and $44,999
increased the most, rising approximately 9.0 percent--from 49.2 percent
in 2019 to 58.3 percent in 2020.\21\
---------------------------------------------------------------------------
\18\ See 12 U.S.C. 4563(c).
\19\ See ``The State of the Nation's Housing 2022,'' Joint
Center for Housing Studies of Harvard University, June 2022, p.6,
available at <a href="https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_State_Nations_Housing_2022.pdf">https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_State_Nations_Housing_2022.pdf</a>.
\20\ See ``The State of the Nation's Housing 2022: Appendix and
Web Tables,'' Joint Center for Housing Studies of Harvard
University, June 2022, Table W-2, available at <a href="https://www.jchs.harvard.edu/sites/default/files/interactive-item/files/Harvard_JCHS_State_Nations_Housing_2022_Appendix_Tables_0.xlsx">https://www.jchs.harvard.edu/sites/default/files/interactive-item/files/Harvard_JCHS_State_Nations_Housing_2022_Appendix_Tables_0.xlsx</a>.
\21\ Ibid.
---------------------------------------------------------------------------
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 project-based rental
assistance (e.g., Section 8
[[Page 50799]]
contracts), and supply-side subsidies which support the creation and
preservation of affordable housing (e.g., public housing and low-income
housing tax credits (LIHTC)). The availability of public subsidies
impacts the overall affordable multifamily housing market, and
significant changes to long-standing 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 such as expiring Section 8 Housing Assistance Payment
contracts and LIHTC properties reaching the end of the use-restricted
affordability period.
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 LIHTC, tax-exempt bonds,
Section 8 rental assistance, or soft subordinate financing.\22\
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 LIHTC during 2023 and 2024. 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.)
---------------------------------------------------------------------------
\22\ LIHTCs are a supply-side subsidy created under the Tax
Reform Act of 1986 and are 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.
---------------------------------------------------------------------------
The need for public subsidies persists as the number of cost-
burdened renters remains high, at over 20.4 million renter households
in 2019.\23\ The Center for Budget Policy Priorities estimates that
only one in four households eligible for federal housing assistance
currently receives it.\24\
---------------------------------------------------------------------------
\23\ ``America's Rental Housing 2022,'' Joint Center for Housing
Studies of Harvard University, January 2022, p.32, available at
<a href="https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_Americas_Rental_Housing_2022.pdf">https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_Americas_Rental_Housing_2022.pdf</a>.
\24\ See <a href="https://www.cbpp.org/research/housing/more-housing-vouchers-most-important-step-to-help-more-people-afford-stable-homes">https://www.cbpp.org/research/housing/more-housing-vouchers-most-important-step-to-help-more-people-afford-stable-homes</a>.
---------------------------------------------------------------------------
Role of the Enterprises. In proposing the multifamily housing goal
benchmark levels for 2023 and 2024, FHFA has considered the ability of
the Enterprises to lead the market in making multifamily mortgage
credit available. The share of the overall multifamily mortgage
origination market that is purchased by the Enterprises increased in
the years immediately following the financial crisis, but their share
has declined more recently in response to growing private sector
participation. The share of the multifamily mortgage origination market
that was purchased by the Enterprises was over 70 percent in 2008 and
2009, compared to 36 percent in 2015.\25\ The total share was at 40
percent or higher from 2016 to 2020.\26\ In 2021, a record multifamily
volume year, the combined Enterprise share was estimated to have been
around 29 percent.<SUP>27 28 29</SUP>
---------------------------------------------------------------------------
\25\ See Fannie Mae, ``Multifamily Business Information
Presentation,'' May 2022, pg. 3, available at <a href="https://multifamily.fanniemae.com/media/9131/display">https://multifamily.fanniemae.com/media/9131/display</a>.
\26\ Ibid.
\27\ See <a href="https://www.mba.org/news-and-research/newsroom/news/2022/07/19/higher-rates-economic-uncertainty-to-slow-commercial-multifamily-lending-in-the-second-half-of-2022">https://www.mba.org/news-and-research/newsroom/news/2022/07/19/higher-rates-economic-uncertainty-to-slow-commercial-multifamily-lending-in-the-second-half-of-2022</a>.
\28\ See <a href="https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-hits-2021-multifamily-cap-707-billion-total-housing">https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-hits-2021-multifamily-cap-707-billion-total-housing</a>.
\29\ See <a href="https://multifamily.fanniemae.com/news-insights/multifamily-wire/fannie-mae-multifamily-reports-2021-financial-results">https://multifamily.fanniemae.com/news-insights/multifamily-wire/fannie-mae-multifamily-reports-2021-financial-results</a>.
---------------------------------------------------------------------------
FHFA recognizes that there are numerous Enterprise activities that
impact how the Enterprises contribute to and participate in the
multifamily market, including through their Duty to Serve Underserved
Markets Plans, their Equitable Housing Finance Plans, and the mission-
driven elements of the Conservatorship Scorecard. FHFA will continue to
monitor these initiatives and priorities to ensure appropriate focus by
the Enterprises and compliance with the Enterprises charter acts and
safety and soundness considerations.
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. This support should
continue throughout the economic cycle, with the Enterprises providing
steady support even as the overall volume of the multifamily mortgage
market fluctuates.
Maintaining the sound financial condition of the Enterprises. In
proposing multifamily housing goals benchmark levels for 2023 and 2024,
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' sound and solvent financial
condition. The Enterprises have served as a stabilizing force in the
multifamily mortgage market. During conservatorship, 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.
FHFA continues to monitor the activities of the Enterprises in
FHFA's capacity as safety and soundness regulator and as conservator.
As discussed above, FHFA may take any steps it determines necessary and
appropriate to address 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 the benchmark levels for the
multifamily housing goal and subgoals for 2023 and 2024 as follows:
----------------------------------------------------------------------------------------------------------------
Proposed
benchmark for
Goal Criteria 2023 and 2024
(%)
----------------------------------------------------------------------------------------------------------------
Low-Income Goal............................... Percent of all goal-eligible units in 61
multifamily properties financed by mortgages
purchased by the Enterprises in that year that
are affordable to low-income families, defined
as families with incomes less than or equal to
80 percent of AMI.
[[Page 50800]]
Very Low-Income Subgoal....................... Percent of all goal-eligible units in 12
multifamily properties financed by mortgages
purchased by the Enterprises in that year that
are affordable to very low-income families,
defined as families with incomes less than or
equal to 50 percent of AMI.
Small Multifamily Low-Income Subgoal.......... Percent of all goal-eligible units in 2
multifamily properties of all sizes financed
by mortgages purchased by the Enterprises that
are units in small multifamily properties
affordable to low-income families, defined as
families with incomes less than or equal to 80
percent of AMI.
----------------------------------------------------------------------------------------------------------------
Before finalizing the benchmark levels for the multifamily housing
goals, FHFA will review any additional data that becomes available
about the multifamily housing goals performance of the Enterprises, any
other information about the multifamily mortgage market or other
factors, and comments received in response to the proposed rule.
Each of the proposed multifamily housing goals benchmark levels is
discussed further below.
1. Multifamily Low-Income Housing Goal
The proposed multifamily low-income housing goal would be based on
the percentage of rental units in multifamily properties financed by
mortgages purchased by the Enterprises in that year that are affordable
to low-income families, defined as families with incomes less than or
equal to 80 percent of AMI. The proposed rule would set the annual
benchmark level for this goal for both 2023 and 2024 at 61 percent of
goal-eligible units acquired. For example, if an Enterprise acquires
100,000 goal-eligible multifamily units in 2023, 61 percent of those
goal-eligible units (or 61,000 units) must be for low-income households
in order to meet the goal. FHFA has calculated what the Enterprise
performance would have been in previous years if the multifamily
housing goals had been based on this percentage-based approach. The
historic performance average for the pre-pandemic years of 2017-2019
would have been 65.1 percent for Fannie Mae and 67.3 percent for
Freddie Mac. FHFA believes the proposed benchmark level of 61 percent
is appropriate to ensure a strong focus on affordability by the
Enterprises in 2023-2024 while recognizing the increased competitive
pressures described above. The proposed benchmark level of 61 percent
would take into account the rising interest rate environment and the
additional challenges the Enterprises currently face in the competitive
market, without diminishing the Enterprises' focus on affordability.
Table 2 shows the Enterprise acquisitions of goal-qualifying low-
income multifamily units, as well as the goal-qualifying low-income
units as a percentage of the total goal-eligible units that were
acquired in each year. It is difficult to compare the proposed
benchmark level of 61 percent to the current numeric benchmark level of
415,000 units because the percentage depends on the volume of
Enterprise business as well as the composition of that business.
However, the recent performance of the Enterprises indicates that the
number of goal-qualifying units in properties backing mortgages
purchased by the Enterprises varies more widely from year-to-year than
the percentage of goal-qualifying units, as seen in Table 2. This is
especially true as the market expands and contracts from year-to-year
illustrating one of the major advantages of shifting from numeric
benchmark levels to percentage-based benchmark levels.
The proposed benchmark level of 61 percent may be adjusted as
needed in the final rule based on any comments received and any new
information that becomes available before publication of the final
rule. FHFA welcomes comments on the proposed benchmark level of 61
percent, the role of the Enterprises in this market, and any other
matters related to the multifamily low-income housing goal.
[GRAPHIC] [TIFF OMITTED] TP18AU22.003
2. Multifamily Very Low-Income Housing Subgoal
The proposed multifamily very low-income housing subgoal would be
based on the percentage of rental units in multifamily properties
financed by mortgages purchased by the Enterprises that are affordable
to 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
benchmark level for this subgoal for 2023 and 2024 at 12 percent of
goal-eligible units acquired. FHFA has calculated what the Enterprise
performance would have been in previous years if the subgoal had been
based on this percentage-based
[[Page 50801]]
approach. The average performance of the Enterprises under this subgoal
during the pre-pandemic years of 2017-2019 would have been 13.1 percent
for Fannie Mae and 15.6 percent for Freddie Mac. FHFA believes that the
proposed benchmark level of 12 percent is appropriate to ensure that
the Enterprises continue to adequately serve very low-income families
while accounting for the challenges associated with increasing interest
rates and uncertain economic conditions.
It is difficult to compare this proposed benchmark level of 12
percent to the current numeric benchmark level of 88,000 units because
the percentage depends on the volume of Enterprise business as well as
the composition of that business. Nevertheless, Table 3 lays out the
percentage shares and the number of units that qualify for the very
low-income subgoal at both Enterprises from 2015 to 2021. As with the
multifamily low-income goal, the recent performance of the Enterprises
on the multifamily very low-income subgoal indicates that the number of
goal-qualifying units in properties backing mortgages purchased by the
Enterprises varies more widely from year-to-year than the percentage of
goal-qualifying units.
The proposed benchmark level of 12 percent may be adjusted as
needed in the final rule based on any comments received and any new
information that becomes available before publication of the final
rule. FHFA welcomes comments on the proposed benchmark level of 12
percent, the role of the Enterprises in this market, and any other
matters related to the multifamily very low-income housing subgoal.
[GRAPHIC] [TIFF OMITTED] TP18AU22.004
3. Small Multifamily Low-Income Housing Subgoal
The proposed small multifamily low-income housing subgoal would be
based on the percentage of rental units in all multifamily properties
financed by mortgages purchased by the Enterprises that are units in
small multifamily properties affordable to low-income families, defined
as families with incomes less than or equal to 80 percent of AMI. The
Enterprise housing goals regulation defines a small multifamily
property as a property with 5 to 50 units. The proposed rule would set
this subgoal as a percentage of the overall Enterprise multifamily loan
purchases each year rather than as a percentage of the small
multifamily properties only, consistent with the objectives FHFA has
previously expressed for this subgoal. The proposed rule would set the
annual benchmark level for affordable units in small multifamily
properties for 2023 and 2024 at 2 percent of goal-eligible units in all
multifamily properties securing mortgages acquired by an Enterprise
each year.
This subgoal was created in the 2015-2017 housing goals rulemaking
to position the Enterprises to respond quickly to potential need in
this segment.\30\ Due to increased private sector financing and current
market conditions in the small multifamily market, FHFA is interested
in ensuring that the Enterprises remain positioned to support this
market when needed without crowding out other sources of financing for
small multifamily properties. The proposed benchmark level would be set
as a share of total goal-eligible units and not the affordable share of
units in small multifamily properties to ensure that the Enterprises
maintain a minimum level of engagement in the small multifamily segment
of the market.
---------------------------------------------------------------------------
\30\ See 80 FR 53392 (Sept. 3, 2015).
---------------------------------------------------------------------------
The small low-income multifamily housing market historically has
been challenging to size and monitor. FHFA is aware that conditions in
the small multifamily market may have changed recently in part due to
the return of private sector financing since its pandemic-related
slowdown in 2020.\31\ As a result, the need for a significant presence
by the Enterprises in this market may no longer be necessary.
Furthermore, as reflected by the different numeric benchmark levels for
each Enterprise in the 2021 final rule, FHFA recognizes that the
Enterprises have different multifamily business models and each
Enterprise sets its own credit risk tolerance for multifamily products.
As a result, Fannie Mae and Freddie Mac perform very differently on
this subgoal.
---------------------------------------------------------------------------
\31\ See <a href="https://www.walkerdunlop.com/insights/2021/07/19/small-balance-multifamily-sizable-and-resilient/">https://www.walkerdunlop.com/insights/2021/07/19/small-balance-multifamily-sizable-and-resilient/</a>. FHFA defines small
multifamily properties as properties with 5 to 50 units, while this
article defines small multifamily properties to include properties
with 5 to 99 units and multifamily properties with a principal loan
balance at origination between $1 and $10 million.
---------------------------------------------------------------------------
Taking all of these factors into account, FHFA is proposing a
benchmark level for this subgoal for each Enterprise of 2 percent of
goal-eligible units in all multifamily properties securing mortgages
acquired by an Enterprise each year. FHFA believes that this proposed
benchmark level would reflect a reduced level of Enterprise
participation that would adjust with Enterprise loan acquisitions but
also maintain Enterprise participation in this small, but specialized,
segment. Furthermore, the benchmark level could be increased in future
notice-and-comment rulemaking should the need arise.
It is difficult to compare the proposed percentage-based benchmark
level to the current numeric benchmark level of 17,000 units for Fannie
Mae and 23,000 units for Freddie Mac because the percentage depends on
the volume of Enterprise business as well as the composition of that
business. Table 4 shows Enterprise performance on this subgoal both in
terms of the actual numeric benchmark levels applicable through 2022,
as well as the proposed
[[Page 50802]]
subgoal metric that would be based on percentages.
The proposed benchmark level of 2 percent may be adjusted as needed
in the final rule based on any comments received and any new
information that becomes available before the publication of the final
rule. FHFA welcomes comments on the proposed benchmark level of 2
percent, the effectiveness of this subgoal, small multifamily market
dynamics, and the role of the Enterprises in this market.
[GRAPHIC] [TIFF OMITTED] TP18AU22.005
V. 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.
VI. 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. FHFA need not undertake such an
analysis 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 and 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 regulation only 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
0
1. The authority citation for part 1282 continues to read as follows:
Authority: 12 U.S.C. 4501, 4502, 4511, 4513, 4526, 4561-4566.
0
2. Amend Sec. 1282.13 by revising paragraphs (b) through (d) to read
as follows:
Sec. 1282.13 Multifamily special affordable housing goal and
subgoals.
* * * * *
(b) Multifamily low-income housing goal. The percentage share of
dwelling units in multifamily residential housing financed by mortgages
purchased by each Enterprise that consists of dwelling units affordable
to low-income families shall meet or exceed 61 percent of the total
number of dwelling units in multifamily residential housing financed by
mortgages purchased by the Enterprise in each year for 2023 and 2024.
(c) Multifamily very low-income housing subgoal. The percentage
share of dwelling units in multifamily residential housing financed by
mortgages purchased by each Enterprise that consists of dwelling units
affordable to very low-income families shall meet or exceed 12 percent
of the total number of dwelling units in multifamily residential
housing financed by mortgages purchased by the Enterprise in each year
for 2023 and 2024.
(d) Small multifamily low-income housing subgoal. The percentage
share of dwelling units in small multifamily properties financed by
mortgages purchased by each Enterprise that consists of dwelling units
affordable to low-income families shall meet or exceed 2 percent of the
total number of dwelling units in all multifamily residential housing
financed by mortgages purchased by the Enterprise in each year for 2023
and 2024.
0
3. Amend Sec. 1282.15 by revising paragraphs (c) and (e)(3) to read as
follows:
Sec. 1282.15 General counting requirements.
* * * * *
(c) Calculating the numerator and denominator for multifamily
housing goals. Performance under the multifamily housing goal and
subgoals shall be measured using a fraction that is converted into a
percentage. Neither the numerator nor the denominator shall include
Enterprise transactions or activities that are not mortgage purchases
as defined by FHFA or that are specifically excluded as ineligible
under Sec. 1282.16(b).
[[Page 50803]]
(1) The numerator. The numerator of each fraction is the number of
dwelling units that count toward achievement of a particular
multifamily housing goal or subgoal in properties financed by mortgages
purchased by an Enterprise in a particular year.
(2) The denominator. The denominator of each fraction is the total
number of dwelling units in properties financed by mortgages purchased
by an Enterprise in a particular year.
* * * * *
(e) * * *
(3) The estimation methodology in paragraph (e)(2) of this section
may be used up to a nationwide maximum of 5 percent of the total number
of rental units in properties securing multifamily mortgages purchased
by the Enterprise in the current year. Multifamily rental units with
missing affordability information in excess of this maximum shall be
included in the denominator for the multifamily housing goal and
subgoals, but such rental units shall not be counted in the numerator
of any multifamily housing goal or subgoal. Multifamily rental units
with missing affordability information for which estimation information
is not available shall be excluded from both the numerator and the
denominator for purposes of the multifamily housing goal and subgoals.
* * * * *
Sandra L. Thompson,
Director, Federal Housing Finance Agency.
[FR Doc. 2022-17868 Filed 8-17-22; 8:45 am]
BILLING CODE 8070-01-P
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