Rule2025-23746
2026-2028 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
December 23, 2025
Effective
February 23, 2026
Issuing agencies
Federal Housing Finance Agency
Abstract
The Federal Housing Finance Agency (FHFA) is issuing a final rule on the housing goals for Fannie Mae and Freddie Mac (the Enterprises) for 2026 through 2028 as required by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. The rule establishes benchmark levels for the housing goals for 2026 through 2028. The rule replaces the two area-based subgoals with one low-income areas subgoal, simplifies the goal determination process, clarifies inflation adjustments to maximum civil money penalties related to housing goals, and makes other technical changes.
Full Text
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<title>Federal Register, Volume 90 Issue 244 (Tuesday, December 23, 2025)</title>
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[Federal Register Volume 90, Number 244 (Tuesday, December 23, 2025)]
[Rules and Regulations]
[Pages 59948-59967]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23746]
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FEDERAL HOUSING FINANCE AGENCY
12 CFR Parts 1209, 1281, and 1282
RIN 2590-AB59
2026-2028 Enterprise Housing Goals
AGENCY: Federal Housing Finance Agency.
ACTION: Final rule.
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SUMMARY: The Federal Housing Finance Agency (FHFA) is issuing a final
rule on the housing goals for Fannie Mae and Freddie Mac (the
Enterprises) for 2026 through 2028 as required by the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992. The rule
establishes benchmark levels for the housing goals for 2026 through
2028. The rule replaces the two area-based subgoals with one low-income
areas subgoal, simplifies the goal determination process, clarifies
inflation adjustments to maximum civil money penalties related to
housing goals, and makes other technical changes.
DATES: This final rule is effective February 23, 2026.
FOR FURTHER INFORMATION CONTACT: For general questions, please contact
<a href="/cdn-cgi/l/email-protection#206d45444941694e5155495249455360666866610e474f56"><span class="__cf_email__" data-cfemail="9bd6fefff2fad2f5eaeef2e9f2fee8dbddd3dddab5fcf4ed">[email protected]</span></a>. For technical questions, please contact Leda
Bloomfield, Senior Associate Director, Office of Affordable Housing and
Community Investment, Division of Housing Mission and Goals, 202-649-
3415, <a href="/cdn-cgi/l/email-protection#662a03020748240a09090b000f030a0226000e000748010910"><span class="__cf_email__" data-cfemail="0e426b6a6f204c6261616368676b626a4e6866686f20696178">[email protected]</span></a>; Siobhan Kelly, Senior Associate
Director, Office of Single and Multifamily Policy, Division of Housing
Mission and Goals, 202-649-3142, <a href="/cdn-cgi/l/email-protection#f3a09a9c919b929dddb8969f9f8ab3959b9592dd949c85"><span class="__cf_email__" data-cfemail="4b18222429232a2565002e2727320b2d232d2a652c243d">[email protected]</span></a>; or Kevin
Sheehan, Associate General Counsel, Office of General Counsel, 202-649-
3086, <a href="/cdn-cgi/l/email-protection#430826352a2d6d102b26262b222d03252b25226d242c35"><span class="__cf_email__" data-cfemail="de95bba8b7b0f08db6bbbbb6bfb09eb8b6b8bff0b9b1a8">[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. Background
A. Statutory and Regulatory Background for Enterprise Housing Goals
The Federal Housing Enterprises Financial Safety and Soundness Act
of 1992 (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 annual housing goals are one
measure of the extent to which the Enterprises are meeting their public
purposes as defined by statute, 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\ 12 U.S.C. 4561(a).
\2\ 12 U.S.C. 4501(7).
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FHFA establishes 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 parameters for determining how mortgage purchases
are counted or not counted towards the goals are defined in FHFA's
Enterprise housing goals regulation.\3\ This final rule establishes
benchmark levels for the single-family and multifamily housing goals
for 2026-2028.
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\3\ 12 CFR part 1282.
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Single-family housing goals. The single-family housing goals
defined under the Safety and Soundness Act include separate categories
for home purchase mortgages for low-income families, very low-income
families, and families that reside in low-income areas.\4\ For purposes
of the single-family housing goals, families that reside in low-income
areas \5\ include: (1) families in low-income census tracts, defined as
census tracts with median income less than or equal to 80 percent of
area median income (AMI); \6\ (2) families with incomes less than or
equal to 100 percent of 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); \7\
and (3) families with incomes less than or equal to 100 percent of AMI
who reside in designated disaster areas.\8\ The current Enterprise
housing goals regulation also includes subgoals \9\ within the low-
income areas home purchase goal.\10\ Performance on the single-family
home purchase goals and subgoals 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
single-family refinance mortgages for low-income families, and
performance on the refinance goal is determined in a similar way.
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\4\ 12 U.S.C. 4562(a)(1). To distinguish the goals and subgoals
related to home purchase mortgages from the goal related to
refinance mortgages, this preamble refers to the ``low-income home
purchase goal'' and the ``very low-income home purchase goal'' to
refer to the low-income families housing goal and the very low-
income families housing goal, respectively, described in 12 CFR
1282.12(c) and (d).
\5\ See 12 U.S.C. 4502(28); 12 CFR 1282.1 (definition of
``families in low-income areas'').
\6\ 12 CFR 1282.1 (par. (i) of definition of ``families in low-
income areas'').
\7\ 12 U.S.C. 4502(29); 12 CFR 1282.1 (par. (ii) of definition
of ``families in low-income areas'' and definition of ``minority
census tract'').
\8\ 12 U.S.C. 4502(28); 12 CFR 1282.1 (definition of
``designated disaster area'' and par. (iii) of definition of
``families in low-income areas'').
\9\ For brevity, sometimes this preamble uses the term ``goals''
to refer to goals and subgoals.
\10\ 12 CFR 1282.12(f).
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Under the Safety and Soundness Act, the single-family housing goals
are limited to mortgages on owner-occupied housing with one to four
units. The single-family goals cover first lien, conventional,
conforming mortgages, meaning mortgages that are not subordinate to
other mortgage liens, that are not insured or guaranteed by the Federal
Housing Administration or another government agency, and that have
principal balances that do not exceed the conforming loan limits for
Enterprise mortgages.
Multifamily housing goals. The multifamily housing goals defined
under the Safety and Soundness Act
[[Page 59949]]
include separate categories for mortgages on multifamily properties
(properties with five or more units) with rental units affordable to
low-income and very low-income families. The Safety and Soundness Act
also requires reporting on smaller properties.\11\ The multifamily
housing goals generally include all Enterprise multifamily mortgage
purchases, regardless of the purpose of the loan. The multifamily
housing goals evaluate the performance of the Enterprises based on the
share of affordable units in properties that serve as collateral for
mortgages purchased by an Enterprise (loans that are excluded as
ineligible under 12 CFR 1282.16(b) are not counted for purposes of
measuring Enterprise performance). The Enterprise housing goals
regulation does not include a retrospective market level measure for
the multifamily housing goals, due in part to a lack of comprehensive
data about the multifamily market. As a result, FHFA measures
Enterprise multifamily housing goals performance against the benchmark
levels only and the final rule retains this approach.
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\11\ 12 U.S.C. 4563(a)(3).
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The Safety and Soundness Act requires that affordability for rental
units under the multifamily housing 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, i.e., the rent is
decreased by any subsidy payments that the renter may receive,
including housing assistance payments.\13\
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\12\ See 12 U.S.C. 4563(c).
\13\ See 12 CFR 1282.1 (par. (i)(B) of definition of ``rent'').
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B. Considerations After Publication of the Final Rule
If, after publication of this final rule, new information indicates
that any of the single-family or multifamily housing goals or subgoals
should be adjusted in light of market conditions or the safety and
soundness of the Enterprises, or for any other reason, FHFA may take
any steps that are necessary and appropriate to respond, consistent
with the Safety and Soundness Act and the Enterprise housing goals
regulation.
For example, under the Safety and Soundness Act and the Enterprise
housing goals regulation, FHFA is permitted to reduce a benchmark level
in response to an Enterprise petition for reduction for any of the
single-family or multifamily housing goals or subgoals in a particular
year. Any adjustment in response to such a petition must be 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.\14\ The Safety and
Soundness Act and the Enterprise housing goals regulation also consider
the possibility that achievement of a particular housing goal or
subgoal may or may not have been feasible for an Enterprise. If FHFA
determines that a housing goal or subgoal was not feasible for an
Enterprise to achieve, then the statute and regulation do not require
any further action related to that housing goal or subgoal for that
year.\15\ If FHFA determines that an Enterprise did not 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 performance.\16\
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\14\ See 12 U.S.C. 4564(b); 12 CFR 1282.14(d).
\15\ See 12 U.S.C. 4566(b); 12 CFR 1282.21(a) (current
regulation); 12 CFR 1282.22(a) (final rule).
\16\ See 12 U.S.C. 4566(c); 12 CFR 1282.21(a) (current
regulation); 12 CFR 1282.22(a) (final rule).
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II. Summary of Final Rule
A. Benchmark Levels for the Single-Family Housing Goals and Subgoal
This final rule establishes the benchmark levels for the single-
family housing goals for 2026-2028 as follows:
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Current Final
benchmark benchmark
Goal or subgoal Criteria level for 2025- level for 2026-
2027 (percent) 2028 (percent)
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Low-Income Home Purchase Goal (LIP)... Home purchase mortgages on single- 25.0 21.0
family, owner-occupied properties, to
borrowers with incomes no greater than
80 percent of area median income (AMI).
Very Low-Income Home Purchase Goal Home purchase mortgages on single- 6.0 3.5
(VLIP). family, owner-occupied properties, to
borrowers with incomes no greater than
50 percent of AMI.
Low-Income Refinance Goal (LIR)....... Refinance mortgages on single-family, 26.0 21.0
owner-occupied properties, to borrowers
with incomes no greater than 80 percent
of AMI.
Low-Income Areas Home Purchase Subgoal Home purchase mortgages on single- N/A 16.0
(LIA). family, owner-occupied properties with:
<bullet> Borrowers in census tracts with
tract median income of no greater than
80 percent of area median income; or
<bullet> Borrowers with income no
greater than 100 percent of area median
income in census tracts where (i) tract
income is less than 100 percent of area
median income, and (ii) minorities
comprise at least 30 percent of the
tract population.
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The final rule combines the current low-income census tracts home
purchase subgoal and the minority census tracts home purchase subgoal
into a single low-income areas home purchase subgoal. The benchmark
level for the low-income areas home purchase goal is the sum of the
benchmark levels for the low-income areas home purchase subgoal, plus
an additional amount that will be determined separately by FHFA that
takes into account families in disaster areas with incomes no greater
than 100 percent of AMI.\17\ The low-income areas home purchase goal is
[[Page 59950]]
published annually on FHFA's website.\18\
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\17\ See 12 CFR 1282.12(e). The low-income areas home purchase
goal benchmark level for 2025 is 21 percent.
\18\ See Housing Goal Annual Housing Activity Reports and
Determinations for each Enterprise at <a href="https://www.fhfa.gov/programs/affordable-housing/enterprise-housing-goals">https://www.fhfa.gov/programs/affordable-housing/enterprise-housing-goals</a>.
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To simplify the structure of the Enterprise housing goals
regulation, FHFA is removing the temporary measurement buffers for the
housing goals that the Agency previously established for 2025-2027. The
measurement buffers were established to encourage the Enterprises to
focus on achieving certain single-family housing goals by meeting the
market level, if the benchmark level turns out to be higher than the
market level. These measurement buffers partly addressed the
uncertainty in forecasting the market several years in advance as well
as the time lag in determining the actual market level retrospectively.
Since the 2026-2028 benchmarks are set below the forecasted marketed
level, FHFA expects that the Enterprises will be able to calibrate
their mortgage purchase strategies to anticipate small fluctuations in
market uncertainty, making it unnecessary to maintain an additional
regulatory buffer. This accomplishes the original intent of the
measurement buffers, rendering the buffers duplicative and unnecessary.
B. Benchmark Levels for the Multifamily Housing Goals and Subgoal
The final rule establishes the benchmark levels for the multifamily
housing goals and subgoal for 2026-2028 as follows:
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Current Final
benchmark benchmark
Goal and subgoal Criteria level for 2025- level for 2026-
2027 (percent) 2028 (percent)
----------------------------------------------------------------------------------------------------------------
Low-Income Goal....................... Percentage share of all goal-eligible 61.0 61.0
units in multifamily properties
financed by mortgages purchased by the
Enterprises in the year that are
affordable to low-income families,
defined as families with incomes less
than or equal to 80 percent of AMI.
Very Low-Income Goal.................. Percentage share of all goal-eligible 14.0 14.0
units in multifamily properties
financed by mortgages purchased by the
Enterprises in the 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.. Percentage share of all goal-eligible 2.0 2.0
units in all multifamily properties
financed by mortgages purchased by the
Enterprises in the year 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.
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C. Required Adjustments to Maximum Civil Money Penalty Amounts
The Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015 \19\ (Adjustment Improvements Act) requires FHFA to adjust
the level of civil monetary penalties for inflation (including an
initial catch-up adjustment and annual adjustments thereafter). The
final rule makes explicit that the required inflation adjustments apply
to civil money penalties described in section 1345 of the Safety and
Soundness Act (12 U.S.C. 4585), including penalties applicable to the
Enterprise and Federal Home Loan Bank housing goals.
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\19\ Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015, Public Law 114-74, title VII, sec. 701,
129 Stat. 599 (28 U.S.C. 2461 note) (2015), available at <a href="https://www.govinfo.gov/content/pkg/PLAW-114publ74/pdf/PLAW-114publ74.pdf">https://www.govinfo.gov/content/pkg/PLAW-114publ74/pdf/PLAW-114publ74.pdf</a>.
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D. Notice of Preliminary Determination of Compliance With Housing Goals
To streamline the housing goal compliance determination processes,
this final rule requires the Director to provide written notice to an
Enterprise of a preliminary determination only if an Enterprise has
failed to meet a housing goal or subgoal.
E. Technical Changes
The final rule also makes technical changes to the names of the
single-family housing goals to distinguish between goals related to
home purchase mortgages and the goal related to refinance mortgages.
III. Overview of Comments
On October 2, 2025, FHFA published a notice of proposed rulemaking
(proposed rule) in the Federal Register (90 FR 47632) proposing single-
family and multifamily housing goals for 2026-2028. Public comments
were accepted between October 2nd and November 3rd, 2025.
FHFA received 19 comments in response to the proposed rule, which
are published on FHFA's website.\20\ Of these, 18 include substantial
comments about the topics in the proposed rule. The comments submitted
include letters from four individuals, six nonprofit policy advocacy
groups, and nine trade associations. Six comment letters were signed by
coalitions of organizations.
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\20\ Available at <a href="https://www.fhfa.gov/regulation/federal-register/proposed-rulemaking/2026-2028-enterprise-housing-goals-proposed-rule">https://www.fhfa.gov/regulation/federal-register/proposed-rulemaking/2026-2028-enterprise-housing-goals-proposed-rule</a>.
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Five comments were in favor of the proposed rule, nine were not in
favor, and four comments expressed mixed support. Three trade
associations and two individuals generally supported the rule due to
its anticipated benefits for middle-income borrowers and low-income
renters, as well as its potential to reduce market distortions and
regulatory burdens. Policy advocacy groups and one trade group
generally opposed the rule because they believe it would reduce support
for low- to moderate-income borrowers. Four trade groups supported
parts of the proposed rule, such as the multifamily benchmarks, but
opposed different parts of the single-family benchmarks. Several
comments related to topics outside of the scope of rulemaking including
recommendations for manufactured housing policy activity and
legislative proposals to address housing affordability. Comments
received and FHFA's responses are summarized by topic below.
[[Page 59951]]
IV. Single-Family Housing Goals and Subgoal
A. Factors Considered in Setting the Single-Family Housing Goal
Benchmark 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\
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\21\ See 12 U.S.C. 4562(e)(2)(B).
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FHFA has considered each of these seven statutory factors in
setting the benchmark levels for each of the single-family housing
goals in this final rule. FHFA also has considered each of the comments
received in response to the proposed rule, as discussed in more detail
below
FHFA's analysis of the single-family housing goals depends in part
on a market forecast model developed by FHFA. The most recently
developed models, published in December 2024, relied on 20 years of
HMDA data, from 2004 to 2023, the latest year for which public HMDA
data was available when the proposed rule was issued. FHFA also uses
Moody's Analytics forecasts data as the primary data source for the
model's independent or driver variables. Additional discussion of the
most recent market forecast models can be found in a technical report
on FHFA's website.\22\
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\22\ Details on FHFA's single-family market models are available
in the technical report ``The Size of the Affordable Mortgage
Market: 2025-2027 Enterprise Single-Family Housing Goals,''
(December 2024), available at <a href="https://www.fhfa.gov/research/papers/2025-2027-enterprise-single-family-housing-goals-12-2024">https://www.fhfa.gov/research/papers/2025-2027-enterprise-single-family-housing-goals-12-2024</a>.
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B. National Housing Needs and Economic, Housing, and Demographic
Conditions
FHFA received several comments from national advocacy groups and
individuals on the current state of housing affordability, racial
disparities in lending, and threats to economic sustainability in the
United States. Two commenters argued that the lower benchmarks would
improve affordable housing, strengthen communities, and reduce
inequality. However, most commenters contended that the lower
benchmarks would widen gaps in affordable housing availability and
increase financial hardship for low- to moderate-income borrowers. Some
commenters claimed that FHFA asserted that mission focused lending
undermines safety and soundness. These commenters argued FHFA should
not prioritize recapitalization over equitable access to capital and
the public interest. Furthermore, advocacy groups stated that the
nation faces a housing affordability crisis compounded by a fair
housing crisis, both of which exacerbate challenges for borrowers.
Commenters provided evidence that racial homeownership gaps remain as
wide today as in 1968 and cited ongoing redlining, exclusionary zoning
laws, and labor market discrimination.
Other commenters, including trade associations, praised FHFA's
efforts to enhance the supply of affordable housing and promote
efficiency and innovation in the housing market. Specifically, trade
associations supported FHFA's focus on housing supply in the proposed
rule. They argued that the Enterprises should reconsider deployment of
housing goal subsides to address drivers of housing affordability
issues. Some policy advocacy groups, however, rejected the notion that
current affordable housing supply conditions justify a reduction in
goals, emphasizing that the Enterprises have a mandate to support
borrowers regardless of housing supply levels.
The Agency also received comments on the proposed rule's impact on
first-time homebuyers. Advocacy groups noted that homeownership remains
out of reach for borrowers across all income levels, emphasizing that
single-family home prices have risen faster than median incomes in
nearly all metropolitan areas. They urged FHFA not to reduce the
single-family benchmarks, emphasizing that Enterprise-backed mortgages
represent important opportunities for first-time homebuyers. Advocacy
groups further expressed concern that persistent drivers of wealth
inequality, such as exposure to natural disasters and worsening
macroeconomic conditions, continue to disproportionately affect low- to
moderate-income communities, and cautioned that the single-family
benchmarks should not be set at levels that could exacerbate
disparities among borrowers.
FHFA also received comments in favor of its broad efforts to better
serve middle- and working-class Americans. Trade organizations praised
FHFA for acknowledging the past evidence of ``denominator management''
and other market distortions that negatively impact middle class
borrowers and supported FHFA's proposed efforts to negate these
effects. Other commenters argued that the regulation does not expand
access to housing credit for all borrowers, but, instead, primarily
benefits wealthier households. Some policy advocacy groups also
challenged FHFA's belief that the rule, if finalized as proposed, will
better support middle-income borrowers, noting that the current housing
goals already target this group and that reducing the benchmarks
undermines the regulation's intended objective. Commenters emphasized
that middle-income borrowers should be supported by the Enterprises in
all economic cycles and across all regions, and argued that the
proposed benchmarks do not achieve this goal. Additionally, advocacy
groups criticized FHFA for not providing sufficient quantitative
evidence to support the assertion that moderate-income households will
face increasing obstacles to homeownership due to competition among
millennials pursuing first-time homeownership.
FHFA acknowledges the nation's affordable housing crisis, and
believes that finalizing the proposed rule will be a meaningful step
toward addressing these challenges for Americans. The rule accounts for
the limited supply of affordable housing and establishes benchmark
levels designed to prevent unfair market distortions, such as
discouraging or denying access to mortgages for credit-eligible
applicants in order to meet housing goals targets. The lower single-
family benchmarks are also intended to help mitigate potential price
escalation that could disproportionately harm affordability for goal-
eligible populations. Furthermore, the proposed benchmarks will enable
the Enterprises to focus their efforts on developing products and
resources that better support first-time homeownership and enhance
affordability, rather than competing in a bidding war over a limited
supply of goal-qualifying loans. FHFA finds that the proposed rule,
once finalized, will likely expand access to mortgage credit for
approximately 201,000 additional goal-eligible borrowers who otherwise
might not obtain mortgage financing. Therefore, FHFA concurs with
commenters who argue that the lower
[[Page 59952]]
single-family benchmarks will improve housing affordability and reduce
inequalities for Americans.
The Agency is committed to ensuring non-discriminatory access to
mortgage credit across the nation and works to ensure that fair lending
laws and requirements are followed by all of its regulated entities.
However, FHFA disagrees that the setting of housing goal benchmarks has
direct impact on redlining, exclusionary zoning laws, or labor market
discrimination. Rather, the Agency's policy is to ensure that all
households have equal access regardless of race and ethnicity. Over the
past year, the Agency has overseen and supported efforts by the
Enterprises to make housing more affordable, including, for example,
through down payment and closing cost assistance to very low-income
borrowers, enhanced free borrower education, and modern underwriting
that considers a borrower's rental payment history and cash flow.
While the rule is designed to support low- to moderate-income
borrowers in light of ongoing affordability and fair lending
challenges, FHFA emphasizes that other market participants also play a
vital role in advancing affordable housing. State Housing Finance
Agencies (HFAs), the Rural Housing Service (RHS), the Federal Housing
Administration (FHA), and the Department of Veterans Affairs (VA) are
among the government entities that help provide liquidity and access to
credit for low- to moderate-income borrowers. These organizations are
often able to offer more favorable products tailored to the unique
needs of these borrowers. As noted above and in the preamble to the
proposed rule, the final rule ensures that benchmark levels are
calibrated to avoid crowding out government entities and other sources
of mortgage liquidity, thereby fostering a balanced and coordinated
effort to expand affordable housing opportunities.
Lastly, FHFA finds that, given current affordability challenges and
heightened market uncertainty, it would be imprudent to set benchmarks
at overly aggressive levels. To maintain compliance with statutory
safety and soundness requirements and to promote long-term housing
market stability, FHFA believes it is essential to establish benchmark
levels that strengthen the Enterprises' financial positions while
continuing to ensure that low- and moderate-income families are
effectively served.
C. Performance and Effort of the Enterprises in Achieving Housing Goals
in Previous Years
Commenters representing industry trade organizations supported the
Agency's position regarding the potential for past goals to have been
too aggressive and beyond the capacity of available supply in the
market. In their view, the primary issue is the limited supply of
affordable homes, and an over-emphasis on the demand side of the
equation (high goal benchmarks) has historically led to market
distortions and ``gamesmanship,'' including an extreme bidding war for
goal-qualifying loans.
Commenters specifically referenced past market data and FHFA's own
2024 determination that the 2023 low-income and very low-income home
purchase goals were not feasible to achieve. They posit that FHFA's
failure to reset these benchmarks resulted in the Enterprises engaging
in the kind of competition that the proposed rule noted produces market
distortions, such as pricing increases or managing down the
``denominator'' of total loans purchased.
These commenters largely supported the proposed benchmarks,
believing they were appropriately set at the low end of model
confidence intervals or just below model estimates. They viewed this
level as providing necessary flexibility for the Enterprises to respond
to the market while maintaining their statutory obligations. The
ultimate measure of success, they argued, should be the real-world
impact on affordability and household sustainability, not just meeting
a numerical loan production target. A commenter further noted that
aggressive goal setting can inadvertently increase housing costs.
Conversely, many commenters disagreed that the Enterprises are
crowding out other market participants and that their actions may lead
to market distortion, stating that no evidence was presented. A
commenter asserted that any perceived inefficiencies may lie in the
Enterprises' underwriting and pricing frameworks, not in the goals
themselves, and that updating those frameworks could strengthen
liquidity for lenders while maintaining robust goals.
FHFA appreciates the thoughtful comments regarding the historical
impact of setting housing goal benchmarks and the suggestions for
improving the measurement of goal success. The Agency concurs with
commenters who observed that aggressive goal setting in the past, where
targets exceeded the available supply in the market, resulted in market
distortions and bidding wars that ultimately do not benefit the
homebuyer. This aligns with FHFA's rationale that benchmarks set
inappropriately high penalizes middle-class borrowers and creates an
inefficient subsidy mechanism. The Agency's determination that the 2023
low-income and very low-income goals were infeasible further reinforces
the need for realistic, achievable targets.
FHFA also agrees that the housing goals should increase
affordability and promote sustainable homeownership, not simply meet a
numerical target. The proposed recalibration of the Enterprise housing
goals is warranted to address the concern, as detailed in the proposed
rule and reiterated in this final rule, that past benchmarks were too
high, which hindered the efficient deployment of funds. The new
benchmarks are designed to provide the necessary flexibility for the
Enterprises to respond to market conditions, meet their statutory
obligations, and facilitate a thorough examination of lending patterns
without causing undue market distortion.
The Agency finds merit in the suggestion to focus on loan
performance as an integral measure of housing goal success. Ensuring
loan sustainability is directly tied to FHFA's core responsibility to
maintain the safety and soundness of the housing finance system. FHFA
will examine incorporating household sustainability factors into future
goal credit calculations or performance assessments.
Regarding the comment that questioned the evidence of ``denominator
management,'' FHFA relies on its analysis of how the Enterprises'
pricing mechanisms and operational efforts, when driven by high
benchmarks, can lead to the displacement of private capital and distort
competition with other federal entities and harm middle-income
borrowers. As noted in the proposed rule and the Regulatory Impact
Analysis, FHFA notes that the non-Enterprise market segment \23\ has
experienced a growth in their share of goal-eligible loans since 2022,
while the Enterprises acquisitions declined, potentially indicating
``denominator management.''
---------------------------------------------------------------------------
\23\ Graph 2 in the Regulatory Impact Analysis includes all non-
Enterprise originations. However, Graph 4 to the proposed rule
provides the shares of the conforming mortgage market for all new
originations; the Graph shows that since 2022, the share of non-
Agency originations (retained portfolio, PLS market, etc.) has
grown.
---------------------------------------------------------------------------
FHFA aims to encourage the Enterprises to reassess the deployment
[[Page 59953]]
of housing goal subsidies to more effectively address the underlying
drivers of housing affordability. As described in the proposed rule and
the Regulatory Impact Analysis, current benchmarks have contributed to
bidding wars and market distortions over a limited housing supply.
Housing supply conditions therefore directly affect the statutory
factors FHFA must consider when setting benchmarks, including, but not
limited to: the Enterprises' ability to fulfill public needs; their
leadership role in the mortgage industry; and their support of safe and
sound mortgage practices. Accordingly, FHFA finds that current and
forecasted housing supply conditions may justify a reduction in goals,
as affordable housing supply is part of the statutory considerations
for benchmark-setting.
As noted previously in the preamble to the proposed rule and the
Regulatory Impact Analysis, FHFA continues to believe that finalizing
the proposed rule will expand access to housing credit for all
borrowers. Critiques suggesting that the rule primarily benefits
wealthier borrowers are unfounded. Goal-eligible loans exclude
borrowers in the highest income brackets, such as investors and
mortgages exceeding the conforming loan limit. Moreover, the
Enterprises remain incentivized to meet statutory requirements for low-
and moderate-income borrowers, as failure to comply could result in
penalties. Lenders are also likely to continue originating loans to
low- and moderate-income borrowers due to pay-ups (premiums) in
secondary market trading and because these loans represent a
significant and profitable segment of the homebuying market.
FHFA finds that finalizing the proposed rule will better support
middle-income borrowers compared to the current rule. While the same
number of goal-qualifying borrowers will be served, the proposed rule
reduces the likelihood of turning away middle-income borrowers who do
not fit a goal-qualifying definition solely to meet a ratio of goal-
qualifying to goal-eligible borrowers. According to FHFA's regulatory
impact analysis, finalizing the proposed rule is expected to result in
an increase of 201,000 loans to goal-eligible borrowers, with the
largest gains likely for middle-income households.
As described in the proposed rule, FHFA considers demographic
factors as part of its post-model adjustment process to identify
appropriate benchmarks based on model forecasts. One of the factors
discussed was a potential significant increase in demand compared to
the baseline forecasts due to indications that millennials are driving
increased competition for moderate-income homeownership opportunities.
According to NAR's Home Buyers and Sellers Generational Trends 2025
report and a Michigan Journal of Economics survey, millennials
represent the largest share (29%) of recent homebuyers,\24\ signaling
current demand, and 55% are expected to inherit wealth over the next
five years, indicating future demand.\25\ Furthermore, the Joint Center
for Housing Studies' 2025 report projects that the number of households
aged 35-44 will grow by 3.0 million between 2025 and 2035. FHFA
therefore finds it likely that an increasing number of moderate-income
borrowers will seek homeownership and will likely benefit from the
proposed rule. FHFA is committed to monitoring the impact of the final
benchmarks to ensure borrowers across all economic cycles and regions
are supported.
---------------------------------------------------------------------------
\24\ See National Association of Realtors, ``2025 Home Buyers
and Sellers Generational Trends Report,'' (2025), available at
<a href="https://cms.nar.realtor/sites/default/files/2025-03/2025-home-buyers-and-sellers-generational-trends-report-04-01-2025.pdf?_gl=1*8shge6*_gcl_au*OTc2MTQxNzk4LjE3NjI4MTAzNTY">https://cms.nar.realtor/sites/default/files/2025-03/2025-home-buyers-and-sellers-generational-trends-report-04-01-2025.pdf?_gl=1*8shge6*_gcl_au*OTc2MTQxNzk4LjE3NjI4MTAzNTY</a>.
\25\ See Michigan Journal of Economic, ``The Great Wealth
Transfer and its Implications for the American Economy,'' available
at <a href="https://sites.lsa.umich.edu/mje/2025/04/03/the-great-wealth-transfer-and-its-implications-for-the-american-economy/">https://sites.lsa.umich.edu/mje/2025/04/03/the-great-wealth-transfer-and-its-implications-for-the-american-economy/</a>.
---------------------------------------------------------------------------
D. Ability To Lead the Industry in Making Mortgage Credit Available
Many commenters asserted that the Enterprises have a statutory
mandate to serve low- to moderate-income borrowers and communities and
to lead the industry in making mortgage credit available. Commenters
cited the Enterprises' public missions and the requirements under the
Safety and Soundness Act, which includes a specific factor for FHFA to
consider in setting goals: the Enterprises' ability to lead the market
in supporting access to mortgage credit.\26\ These commenters contend
that Congress mandates the Enterprises to lead the industry in making
mortgage credit available for low- and moderate-income borrowers. Many
of the commenters believe that these goals, as proposed, would not
fulfill this mandate.
---------------------------------------------------------------------------
\26\ See 12 U.S.C. 4562(e)(2)(B)(iv) and 4563(a)(4)(D).
---------------------------------------------------------------------------
Several commenters also disagreed with the rationale in the
proposed rule that suggests it may be inappropriate for the Enterprises
to have an outsized market share in mortgage lending to low- to
moderate-income or that the Enterprises should cede their market share
to allow for other industry participants. Some commenters expressed
concern that the proposed benchmarks over-emphasize middle-income
borrowers at the expense of low- to moderate-income borrowers.
Commenters disputed the Agency's suggestion that other federal
government programs (FHA, VA, and USDA/RHS), state Housing Finance
Agency (HFA) programs, or the private-label securities (PLS) market
could serve to make mortgage credit available for low- to moderate-
income borrowers. Commenters explained that VA and USDA loans have
statutory eligibility restrictions that limit their availability, and
one commenter expressed concern that a reduction in the benchmark may
``create a credit gap for households on the margin of eligibility for
both programs.'' Furthermore, commenters noted that although FHA serves
a wider segment of the market, these loans are generally more expensive
for many creditworthy households due to higher upfront and ongoing
costs in the form of a higher mortgage insurance premium, and interest
rate, as well as the lifetime nature of the mortgage insurance.
Commenters note that similar borrowers who qualify for a conventional
mortgage are able to use Enterprise loan products often receive lower
interest rates and cancelable mortgage insurance, reducing the lifetime
costs of the mortgage.
Commenters contended that bank balance sheets cannot be expected to
fill the gap, as banks already receive full Community Reinvestment Act
(CRA) credit for loans sold to the Enterprises and have no reason to
increase the share of low- to moderate-income loans they hold on
balance sheet. Commenters pointed out that the PLS market is cyclical
and historically has primarily funded mortgages to higher-income
borrowers, with the one exception being the subprime lending boom
preceding the 2008 financial crisis. Rather, a commenter noted, the PLS
market is highly sensitive to global capital flows, and during times of
credit pressure (such as the 2008 global financial crisis and the 2020-
2021 coronavirus pandemic) the PLS market has either ceased to
function, or fully withdrew from participating in the market. At these
times, only government lending and the Enterprises remained to
stabilize the mortgage market. Concern was also raised that supporting
PLS market growth is not a mandate in statute and raises market
stability concerns.
A few commenters agreed with the underlying principle that the
Enterprises should not be the sole source of mortgage liquidity and
that pricing should determine the extent of their reach. These
commenters noted
[[Page 59954]]
that while it is appropriate for the Enterprises to increase market
share in periods of market stress or periods of retreat by other market
participants to ensure credit availability, when the private markets
are operating in a healthy manner, the Enterprises can and should
reduce market share. Several commenters, including industry groups,
supported the notion that goals should be set at an appropriate level
to avoid market distortions and prevent the Enterprises from crowding
out private sector participants.
A different set of commenters offered a criticism of past goals,
arguing that setting them too low led to a sharp growth in volume for
FHA, VA, and RHS programs, and simultaneously reduced private capital
participation through instruments like private mortgage insurance and
credit risk transfers. In their view, goals set too low concentrate
risk with the federal government, which runs counter to the
Congressional objective for the Enterprises to share risk with private
capital providers. These commentators expressed a preference for an
appropriate level of private capital to be deployed in the low- to
moderate-income space, arguing this would increase affordability and
efficiency while reducing dependence on Federal government support.
FHFA appreciates the commenters' detailed feedback regarding the
statutory mission of the Enterprises and their role in the secondary
mortgage market. The Agency acknowledges the Enterprises' fundamental
statutory mandate to serve all borrowers, including low- to moderate-
income borrowers and communities throughout the country. FHFA believes
that the rule is designed to ensure that the Enterprises fulfill this
statutory purpose while ensuring that all borrowers have equal access
to a liquid secondary market, and balancing safety and soundness. FHFA
disagrees that the benchmarks are at odds with this important role.
FHFA also notes that the Director is required by statute to
establish goal targets by considering both historical performance and a
number of statutory factors. One of these factors is ``the ability of
the enterprise to lead the industry in making mortgage credit
available.'' \27\ This factor does not mean that the Enterprises must
lead the industry; rather, the Enterprises' ability to lead the
industry is one of several factors considered in conjunction with
historical performance in setting goals. FHFA believes that the goal
setting methodology described in the preamble to the proposed rule
follows the statutory framework by considering all the required factors
to set benchmarks that reflect the policy priorities of the Director.
---------------------------------------------------------------------------
\27\ 12 U.S.C. 4562(e)(2)(B)(iv).
---------------------------------------------------------------------------
FHFA agrees with the commenters who believe that the Enterprises
should not be the sole source of mortgage credit liquidity,
particularly for low- to moderate-income borrowers. The Agency
maintains a policy interest in ensuring the Enterprises do not crowd
out other market participants and intends to use the flexibility
provided by the new goals to collect and analyze comprehensive data to
definitively assess the relationship between goal levels and market
behavior, including potential pricing inefficiencies. A diverse
secondary mortgage market--one that includes the Enterprises, Federal
government loan programs, state and local Housing Finance Agencies, and
a robust, sustainable private-label securities market--is essential.
This diversity allows for healthy competition that can reduce costs for
borrowers, foster innovation, and ensure a more resilient and reliable
supply of liquidity across the economic cycle.
The Agency's approach is consistent with the policy objectives of
promoting competition, increasing private sector participation, and
ensuring the Enterprises' role is defined without duplicating support
provided by the Federal Housing Administration or other federal
programs. Setting goals appropriately requires balancing the statutory
obligation to promote access to affordable credit with the need to
ensure safety and soundness while avoiding unnecessary and costly
duplication of support. The Agency also acknowledges the critical need
to reduce taxpayer exposure to risk and promote private capital
participation.
The determination of the final goal targets balances the statutory
obligation to promote access to affordable credit, the Enterprises'
ability to lead the market, and the need to promote a sustainable,
liquid, and competitive secondary market that includes other market
participants and private risk-sharing mechanisms. The goal levels
ultimately established are determined to provide a sufficient incentive
for the Enterprises to fulfill their mission to low-to moderate-income
borrowers and serve as leaders in the market while encouraging the
sustainable growth and participation of other, non-Enterprise market
participants and the appropriate deployment of private capital.
Furthermore, as noted above, FHFA's analysis of past goal performance,
where Enterprises continued to perform above benchmarks even when they
were set lower, suggests that the Enterprises will maintain strong
liquidity and outreach to low-to moderate-income borrowers, as is
consistent with their broader statutory mission.
For many low-to moderate-income borrowers, the Enterprises are the
appropriate liquidity providers, for others it may be FHA or VA (via
Ginnie Mae), while still others could be better served by the PLS
market. It is important, however, to clearly distinguish between the
setting of the housing goals benchmarks and the selling and
underwriting requirements of the Enterprises. In response to a
commenter's belief that lower benchmarks could create a ``credit gap,''
FHFA notes that a reduced benchmark is separate and distinct from
Enterprise business decisions regarding the appropriate amount of
credit risk; further, it is unlikely that an applicant's mortgage that
was eligible for purchase by the Enterprises would be ineligible by
FHA. As noted above, FHFA does not agree that FHA loans are always a
more expensive alternative because pricing depends on a borrower's
financial profile, loan terms, and market conditions. FHFA also
acknowledges that FHA has a clear statutory mandate to make
homeownership more accessible, particularly for low- to moderate-income
borrowers with low down payments.
It is FHFA's intent to ensure that the Enterprises do not crowd out
other participants \28\ and believes the updated benchmarks will
encourage their involvement. It is also clear that under the current
housing goals benchmarks, a distortive effect is present and FHFA
believes that the means to correct this is to appropriately size the
goals to the needs of the market. It is with this in mind that FHFA
seeks to the right-size the goals and ensure that all borrowers are
served appropriately and extended credit that fits within a borrower's
need and circumstance. As noted earlier, the new benchmarks should not
be viewed as a ceiling for the Enterprises, and the Enterprises are
still expected to make best efforts at serving all segments of the
market, ensuring they meet their affirmative statutory obligations.
---------------------------------------------------------------------------
\28\ As noted above, Graph 4 to the proposed rule provides the
shares of the conforming mortgage market for all new originations;
the Graph shows that since 2022, the share of non-Agency
originations (retained portfolio, PLS market, etc.) has grown.
---------------------------------------------------------------------------
E. Low-Income Purchase and Very Low-Income Purchase Goal Determinations
FHFA received a total of 11 comment letters from advocacy groups
regarding
[[Page 59955]]
the single-family purchase benchmarks. All letters focused on the
proposed reduction of the low-income purchase (LIP) benchmark from 25.0
percent to 21.0 percent, while all but one also addressed the proposed
reduction of the very low-income purchase (VLIP) benchmark from 6.0
percent to 3.5 percent for the years 2026-2028.
The commenters generally expressed concerns that the proposed goals
are not ambitious enough and fall below current market levels,
undermining the assistance that the Enterprises could provide to
families in need. They argued that these reduced goals could jeopardize
the statutory mission of the Enterprises and significantly limit
lending opportunities for households with incomes up to 80 percent and
50 percent of area median income for LIP and VLIP, respectively.
Additionally, several commenters raised issues with FHFA's reliance
on qualitative evidence related to the crowding out of other funding
sources, the increasing costs for middle-income borrowers, and the
notion that increased lending to low and moderate-income borrowers
could undermine safety and soundness. Despite these Agency concerns,
the commenters argue that market data supports maintaining the current
benchmark levels, which they say have consistently been met in previous
years. The commenters advocate for more ambitious goals, especially
given the ongoing affordability challenges in the housing market.
Most of the commenters urged FHFA to either maintain the current
benchmarks or reassess them based on additional empirical data, rather
than qualitative evidence and industry sentiment. One of these
commenters suggested that the Enterprises could exceed the current
purchase benchmarks, requesting increases in both LIP and VLIP
benchmarks, although no specific targets were provided.
In contrast to the commenters advocating higher benchmarks, there
were two letters from industry trade groups expressing their
appreciation to FHFA for its recognition of the potential for market
distortion and efforts to more appropriately calibrate the goals. One
of these commenters pointed out that the LIP and VLIP goals were not
feasible to achieve for 2023.
FHFA has thoroughly reviewed the comments and decided to retain the
proposed reductions to both single-family purchase goals. This decision
is based on FHFA's consideration of each of the statutory factors and
the comments received, as discussed above.
The Agency reaffirms that while data is crucial, qualitative
insights from stakeholder experience also play an essential role in
understanding the complexities of the mortgage finance landscape. These
qualitative assessments enrich the understanding of market dynamics and
borrower needs. Further, the Agency provided quantitative data using
the National Mortgage Database, noting unexpectedly lower acquisitions
of goal-eligible loans by the Enterprises beginning in 2022, which may
be explained by denominator management strategies identified by market
participants through the qualitative data. The Regulatory Impact
Analysis estimates that in 2024, the Enterprises would have acquired an
additional 67,000 goal-eligible loans per annum without having to
purchase any fewer housing goal qualifying loans. Both qualitative and
quantitative data provide unique and valuable insights into the market.
In this case, both qualitative and quantitative information reinforce
the need for FHFA to make adjustments to the goals to appropriately
align incentives with desired outcomes.
FHFA aims to balance market dynamics by reconciling the
Enterprises' commitment to affordable lending with the necessity of
providing liquidity in the broader market. The Agency believes that
maintaining these revised goals will reduce market distortions and
mitigate unintended consequences while continuing to provide robust
support for low- to moderate-income households. Furthermore, FHFA
acknowledges the current economic realities affecting the housing
landscape, such as a significant decrease in affordable inventory and
rising costs, necessitating a reevaluation of attainable targets.
With a focus on long-term stability in the housing market, FHFA
believes that implementing lower benchmarks is a prudent strategy to
ensure the Enterprises can operate sustainably while protecting their
financial health and the structural integrity of the secondary mortgage
market. It is important to note that these goals reflect minimum
requirements, and the Agency expects the Enterprises to exceed these
benchmarks whenever feasible and prudent.
Table 1--Single-Family Low-Income Home Purchase Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Historical performance
Year ---------------------------------------------------- 2025 2026 2027 2028
2021 2022 2023 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual Market................................... 26.7% 26.8% 26.3% ........... ........... ........... ........... ...........
Benchmark....................................... 24.0% 28.0% 28.0% 28.0% 25.0% 21.0% 21.0% 21.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low-Income Home Purchase Mortgages.............. 375,569 278,799 189,439 189,247 ........... ........... ........... ...........
Total Home Purchase Mortgages................... 1,306,459 1,016,371 726,139 710,076 ........... ........... ........... ...........
Low-Income % of Home Purchase Mortgages......... 28.7% 27.4% 26.1% 26.7% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Freddie Mac Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low-Income Home Purchase Mortgages.............. 329,426 264,118 209,432 200,757 ........... ........... ........... ...........
Total Home Purchase Mortgages................... 1,201,540 911,037 735,932 753,338 ........... ........... ........... ...........
Low-Income % of Home Purchase Mortgages......... 27.4% 29.0% 28.5% 26.6% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
As presented in Table 2, the market level for the low-income home
purchase housing goal, derived from HMDA data, declined from 27.6
percent in 2020 to 26.3 percent in 2023. FHFA's most recent forecast
for this goal projects a continued market level decline, averaging 25.9
<plus-minus> 5.6 percent. FHFA's current model forecasts the market
level to remain below 26.0 percent through 2027, with an average
forecast midpoint value of 25.9 percent.
Regarding Enterprise performance, Freddie Mac recorded a low-income
home purchase performance of 29.0 percent in 2022 and 28.5 percent in
2023, exceeding both the benchmark and market levels in those years.
Fannie
[[Page 59956]]
Mae's performance in 2022 was 27.4 percent, which was below the
benchmark level but above the market level. In 2023, however, Fannie
Mae's performance decreased to 26.1 percent, falling below both the
benchmark and the market levels. For 2023, FHFA determined that while
Fannie Mae did not meet the goal, the established benchmark was not
feasible for the Enterprise.\29\ For 2024, both Enterprises exceeded
the market level, with Fannie Mae's performance at 26.7 percent and
Freddie Mac's performance at 26.6 percent.
---------------------------------------------------------------------------
\29\ FHFA's final determination of Fannie Mae's performance for
2023, available at <a href="https://www.fhfa.gov/sites/default/files/2024-11/2023-Final-Determination-Letter-Fannie-Mae.pdf">https://www.fhfa.gov/sites/default/files/2024-11/2023-Final-Determination-Letter-Fannie-Mae.pdf</a>.
Table 2--Single-Family Very Low-Income Home Purchase Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Historical performance
Year ---------------------------------------------------- 2025 2026 2027 2028
2021 2022 2023 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual Market................................... 6.8% 6.8% 6.5% ........... ........... ........... ........... ...........
Benchmark....................................... 6.0% 7.0% 7.0% 7.0% 6.0% 3.5% 3.5% 3.5%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Low-Income Home Purchase Mortgages......... 97,154 69,919 43,792 41,783 ........... ........... ........... ...........
Total Home Purchase Mortgages................... 1,306,459 1,016,371 726,139 710,076 ........... ........... ........... ...........
Very Low-Income % of Home Purchase Mortgages.... 7.4% 6.9% 6.0% 5.9% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Freddie Mac Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Low-Income Home Purchase Mortgages......... 75,945 64,850 50,244 46,055 ........... ........... ........... ...........
Total Home Purchase Mortgages................... 1,201,540 911,037 735,932 753,338 ........... ........... ........... ...........
Very Low-Income % of Home Purchase Mortgages.... 6.3% 7.1% 6.8% 6.1% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
As detailed in Table 3, the market level for the very low-income
home purchase housing goal, derived from HMDA data, decreased from 7.0
percent in 2020 to 6.5 percent in 2023. FHFA's most recent forecast
projects a continued market level decline, averaging 6.0 <plus-minus>
2.5 percent. FHFA's current model forecasts the market to continue its
downward trajectory reaching below 6 percent through 2027, with an
average forecast midpoint value of 5.9 percent.
Regarding the Enterprises, both Enterprises met the very low-income
home purchase goal in 2022, with Freddie Mac's performance at 7.1
percent and Fannie Mae's performance at 6.9 percent. In 2023, Freddie
Mac met the very low-income home purchase goal, with performance at 6.8
percent, but Fannie Mae's performance was 6.0 percent, which was below
both the market and the benchmark. For 2024, Freddie Mac again met the
very low-income home purchase goal, while Fannie Mae's performance was
5.9 percent, below both the market and the benchmark.
The Agency remains committed to its statutory mission of promoting
affordable housing. However, the latest available market performance
data, market forecasts, and Enterprise performance all indicate that
the current benchmark levels for the low-income home purchase goal and
the very low-income home purchase goal are set too aggressively. FHFA
believes that the reductions in the LIP and VLIP goals are a necessary
strategy to maintain the stability of the Enterprises and the broader
housing market. FHFA values the constructive dialogue and insights from
stakeholders and will continue to monitor market conditions closely to
evaluate the ongoing viability of these housing goals.
F. Low-Income Areas, Minority Census Tracts, & Low-Income Census Tracts
Subgoal Determinations
The Agency received several comments regarding the restoration of
the low-income areas subgoal, which would merge the current minority
census tracts subgoal and the low-income census tracts subgoal. One
individual supported the restoration of the low-income areas subgoal as
it reduces administrative burden.
One individual, one trade association, two nonprofits, and three
policy advocacy groups disagreed with the proposal to restore the
previous subgoal and urged FHFA to keep the two area-based subgoals
separate. They argued that given that the Enterprises can meet the low-
income census tracts segment by serving borrowers at any income,
combining both segments could result in greater service to higher-
income borrowers and reduced focus on lower-income homebuyers in
minority census tracts. One policy advocacy group argued that this
change could result in the Enterprises' purchasing up to 88,000 fewer
loans in minority census tracts from 2026 to 2028. In addition,
commenters noted that while this merger may reduce administrative
burden, it may make it more difficult to track the Enterprises'
performance in the minority census tracts.
As stated in the proposed rule, FHFA is restoring the low-income
areas subgoal to simplify the regulatory framework, improve operational
clarity for the Enterprises, and better align the subgoal with existing
borrower-based metrics. This merger ensures that both segments of the
subgoal remain supported while considering the implementation
challenges related to the current structure. This change also advances
the Administration's priorities for race neutral policies, and for
regulatory reform by reducing compliance costs, increasing efficiency,
and reducing regulatory burden.
Under the current structure, all higher-income borrower loans in
low-income census tracts that are also minority census tracts qualify
for the low-income census tracts subgoal only, while the lower-income
loans in those census tracts qualify for the minority census tracts
subgoal only. Although this separation enables the Enterprises to focus
on lower-income borrowers in census tracts that are both minority and
low-income in one subgoal (the minority census tracts subgoal), it also
places higher-income loans in those census tracts in the other subgoal,
which increases operational complexity.
However, a 2020 study of Enterprise acquisitions between 2010 and
2019, conducted by FHFA, found that under the previous structure, when
the loans
[[Page 59957]]
were not separated as described above, the share of loans made to
borrowers with incomes greater than 100 percent of AMI and residing in
low-income census tracts declined from 40.7 percent in 2010 to 37.0
percent in 2019.\30\ The trend was similar among borrowers residing in
minority census tracts, with the share of higher-income borrowers
declining from 45.4 percent in 2010 to 42.9 percent in 2019.\31\ The
share of high-income borrowers peaked between 2014 and 2016,
corresponding with an overall increase in loan volume, decline in
mortgage rates, and expansion of credit availability. In the following
years, FHFA observed an overall decline in the share of higher-income
borrowers that qualified for this housing goal. Based on this evidence,
and assuming that the trend observed during the 2010 to 2019 study
period is representative of the subgoal as a whole, there does not
appear to be any evidence that having a combined goal results in
reduced support for low-income borrowers. FHFA believes that the
Enterprises will continue to support lower-income borrowers when
borrowers in low-income census tracts and minority census tracts are
served under one subgoal.
---------------------------------------------------------------------------
\30\ Advanced Notice of Proposed Rulemaking, Table 3: Borrower
Income Relative to AMI (Enterprise Loans Only), available at <a href="https://www.govinfo.gov/content/pkg/FR-2020-12-21/pdf/2020-28084.pdf">https://www.govinfo.gov/content/pkg/FR-2020-12-21/pdf/2020-28084.pdf</a>.
\31\ Ibid.
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Additionally, FHFA notes that the public will still be able to
track the Enterprises' performance in minority census tracts without
the minority census tracts subgoal. The Enterprises provide this
information in Tables 7 and 9 of their Annual Mortgage Reports
published on their websites.\32\ Additionally, FHFA publishes
information on borrower race and ethnicity by loan product compared to
the market in its Annual Housing Report.\33\
---------------------------------------------------------------------------
\32\ See Fannie Mae's 2024 Annual Mortgage Report, available at
<a href="https://www.fanniemae.com/media/55596/display">https://www.fanniemae.com/media/55596/display</a> and Freddie Mac's 2024
Annual Mortgage Report, available at <a href="https://www.freddiemac.com/about/pdf/2024-annual-mortgage-report.pdf">https://www.freddiemac.com/about/pdf/2024-annual-mortgage-report.pdf</a>.
\33\ Under 12 U.S.C. 4544(b)(3), FHFA is required to ``aggregate
and analyze data on income, race, and gender by census tract and
other relevant classifications, and compare such data with larger
demographic, housing, and economic trends.'' See FHFA's 2024 Annual
Housing Report, available at <a href="https://www.fhfa.gov/document/annual-housing-report-2024">https://www.fhfa.gov/document/annual-housing-report-2024</a>.
---------------------------------------------------------------------------
Given the operational challenges that emerged with the current
structure, and the evidence of Enterprise behavior under the previous
structure, FHFA believes that it is reasonable and prudent to restore
the low-income areas subgoal as it will reduce administrative burden
while encouraging the Enterprises to focus on supporting borrowers in
low-income areas.
Table 3--Single-Family Low-Income Areas Home Purchase Subgoal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Historical performance
Year ---------------------------------------------------- 2025 2026 2027 2028
2021 2022 2023 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual Market................................... 19.1% 21.8% 22.1% ........... ........... ........... ........... ...........
Benchmark....................................... 14.0% N/A N/A N/A N/A 16.0% 16.0% 16.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Minority Census Tracts Home Purchase Mortgages.. 143,340 137,474 91,202 92,060 ........... ........... ........... ...........
Low-Income Census Tracts Home Purchase Mortgages 122,177 94,864 67,844 68,370 ........... ........... ........... ...........
Low-Income Areas Subgoal Home Purchase Mortgages 265,517 232,338 159,046 160,430 ........... ........... ........... ...........
Total Home Purchase Mortgages................... 1,306,459 1,016,371 726,139 710,076 ........... ........... ........... ...........
Low-Income Area Subgoal % of Home Purchase 20.3% 22.9% 21.9% 22.6% ........... ........... ........... ...........
Mortgages......................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Freddie Mac Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Minority Census Tracts Home Purchase Mortgages.. 111,691 116,223 97,378 90,754 ........... ........... ........... ...........
Low-Income Census Tracts Home Purchase Mortgages 104,401 82,883 69,459 69,438 ........... ........... ........... ...........
Low-Income Areas Subgoal Home Purchase Mortgages 216,092 199,106 166,837 160,192 ........... ........... ........... ...........
Total Home Purchase Mortgages................... 1,201,540 911,037 735,932 753,338 ........... ........... ........... ...........
Low-Income Area Subgoal % of Home Purchase 18.0% 21.9% 22.7% 21.3% ........... ........... ........... ...........
Mortgages......................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
The numbers in italics refer to FHFA's tabulations of the market and Enterprise performance had this subgoal been in place from 2022-2024.
Table 3 shows the market levels and Enterprise performance on this
subgoal in 2021, along with implied market levels and Enterprise
performance for the years 2022 through 2024, during which the low-
income areas subgoal was replaced by the low-income census tracts and
minority census tracts subgoals. As shown above, both Enterprises
exceeded the proposed benchmark level for this subgoal in 2022, 2023,
and 2024.
Based on the comments received and FHFA's consideration of the
statutory factors, including the recent performance of the Enterprises
and the market forecasts shown in Table 3, FHFA has determined that the
benchmark level for the low-income areas home purchase subgoal should
be established at the level that was proposed by FHFA earlier this
year, 16 percent.
G. Low-Income Refinance Goal Determinations
The Agency received comments regarding the proposal to maintain the
low-income refinance benchmark level at 26.0 percent. A trade
organization supported FHFA's proposal to maintain the benchmark level
as was finalized in the 2025-2027 rule, given the segment's sensitivity
to interest rates. Another trade organization urged FHFA to consider
lowering the low-income
[[Page 59958]]
refinance benchmark level--which is below the lower bound of the market
forecast confidence interval--also due to the segment's sensitivity to
interest rates.\34\ They noted that there is a potential for a decline
in interest rates given the Administration's stated policy priorities.
They also urged FHFA to reinstate the measurement buffer for this goal,
due to the potential of interest rates declining to a level that does
not support the proposed benchmark level (as explained below).
---------------------------------------------------------------------------
\34\ Refinance activity is significantly more sensitive to
market interest rate changes than mortgages for new home purchases.
This is because refinancing is discretionary--homeowners only
proceed when prevailing rates are low enough to offer a clear
financial benefit over their current mortgage. In contrast, purchase
money mortgages are necessary for a transaction to occur, making
their volume less sensitive to short-term rate fluctuations.
---------------------------------------------------------------------------
As noted in the proposed rule, the Enterprises' annual performance
on the low-income refinance goal tends to be inversely proportional to
the volume of low-income refinance loans the market produces and the
Enterprises purchase during a given year.\35\ For example, during the
low mortgage rate environment in 2020, overall low-income refinance
volume in the market increased significantly, exceeding 1.3 million
loans.\36\ However, the total market volume for all refinances also
surged, reaching over 6.3 million loans.\37\ This resulted in a low-
income refinance market performance of only 21.0 percent. During that
time period, as well as during 2015 to 2017, neither the Enterprises
nor the market was able to perform above the 26.0 percent proposed
target.
---------------------------------------------------------------------------
\35\ See ``2026-2028 Enterprise Housing Goals,'' 90 FR 47652
(Oct. 2, 2025).
\36\ Ibid.
\37\ Ibid.
---------------------------------------------------------------------------
Conversely, in 2023, amidst higher mortgage rates, the overall low-
income refinance volume contracted sharply to approximately 160,000
loans, while total market refinance volume declined to about 397,000
loans.\38\ This contraction in volume corresponded to a substantially
higher low-income refinance market performance of 40.3 percent. The
Enterprises' performance on the low-income refinance goal mirrored this
pattern, with their low-income refinance percentages increasing
significantly during this later period, even as the absolute volume of
their low-income refinance mortgage purchases decreased.
---------------------------------------------------------------------------
\38\ Ibid.
---------------------------------------------------------------------------
Moreover, since the publication of the proposed rule, FHFA has
observed declines in the 30-year mortgage rate in September and
October. These rates correspond to expected increases in refinances for
primary residences compared to the rest of 2025. With this surge in
refinance activity, the Agency has already observed a decline in the
rate of low-income refinance mortgages below the proposed benchmark.
This performance is consistent with our expectations based on
historical market performance.
Although mortgage rates are expected to decline during the 2026-
2028 housing goals period, FHFA's model cannot forecast the low-income
refinance market with a high degree of confidence due to the
unpredictability of future interest rates and the strong sensitivity of
refinance originations to interest rates. FHFA initially proposed to
maintain the benchmark level at 26.0 percent, which is below the lower
bound of the confidence interval in the market forecast used in the
2025-2027 final rule, to account for this uncertainty. Additionally,
FHFA included the measurement buffer in the 2025-2027 final rule to
enable the Enterprises to focus on meeting the market if mortgage rates
decline more significantly than expected. Without a measurement buffer,
FHFA believes that a 26.0 percent benchmark level may not be achievable
if mortgage rates decline and the Enterprises need to focus on the
market level to meet the goal.
Table 4--Single-Family Low-Income Refinance Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Historical performance
Year ---------------------------------------------------- 2025 2026 2027 2028
2021 2022 2023 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual Market................................... 26.1% 37.3% 40.3% ........... ........... ........... ........... ...........
Benchmark....................................... 21.0% 26.0% 26.0% 26.0% 26.0% 26.0% 26.0% 26.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low-Income Refinance Mortgages.................. 809,452 279,020 60,682 67,584 ........... ........... ........... ...........
Total Refinance Mortgages....................... 3,089,529 803,634 157,984 185,763 ........... ........... ........... ...........
Low-Income % of Refinance Mortgages............. 26.2% 34.7% 38.4% 36.4% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Freddie Mac Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low-Income Refinance Mortgages.................. 658,845 254,332 54,906 61,557 ........... ........... ........... ...........
Total Refinance Mortgages....................... 2,651,858 686,394 127,043 186,266 ........... ........... ........... ...........
Low-Income % of Refinance Mortgages............. 24.8% 37.1% 43.2% 33.0% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
As shown in Table 4, both Enterprises performed well above the 26.0
percent benchmark level in 2022-2024, when mortgage rates were high,
and FHFA does not expect Enterprise performance to decline
significantly due to a lowered benchmark level if mortgage rates remain
elevated.\39\ Considering that the Enterprises have performed well
above the benchmark level in the current high-interest rate
environment, FHFA believes the 21.0 percent benchmark level in the
final rule is reasonable and will enable the Enterprises to remain
focused on both affordability and safety and soundness, even if
mortgage rates decline significantly. Additionally, FHFA believes that
setting the benchmark level where the market performed when mortgage
rates were low eliminates the need for a measurement buffer for this
goal.
---------------------------------------------------------------------------
\39\ See ``2026-2028 Enterprise Housing Goals,'' 90 FR 47651
(Oct. 2, 2025).
---------------------------------------------------------------------------
In response to comments and after reassessing the historical
performance and market trends, FHFA has determined that a benchmark
level lower than 26.0 percent for the low-income refinance goal is
appropriate. The Agency believes that this decision is responsive to
concerns expressed by commenters in this rule and in response to the
2025-2027 proposed housing goals rule, and that a lower benchmark goal
will be a more reasonable and achievable, yet still difficult, target
if interest rates decline significantly. Therefore, in this final rule
FHFA is setting the benchmark level for the low-income refinance goal
at 21.0 percent,
[[Page 59959]]
which was the market performance during the 2020 refinance boom when
mortgage rates were low.
V. Multifamily Housing Goals and Subgoal
A. Factors Considered in Setting the Multifamily Housing Goal Benchmark
Levels
The Safety and Soundness Act requires FHFA to consider the
following six factors in setting the multifamily housing goals:
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.\40\
---------------------------------------------------------------------------
\40\ 12 U.S.C. 4563(a)(4).
---------------------------------------------------------------------------
FHFA has considered each of these six statutory factors in setting
the benchmark levels for each of the multifamily housing goals in this
final rule.
B. Multifamily Housing Goals Comments and FHFA Determinations
FHFA received comments on the multifamily housing goals
recommendations from seven commenters, including trade associations,
nonprofit organizations, and letters signed by multiple organizations.
Nearly all of the commenters that provided feedback on the proposed
multifamily housing goals benchmark levels supported the proposal to
maintain the current multifamily low-income goal benchmark at 61.0
percent, maintain the current very low-income goal benchmark at 14.0
percent, and maintain the current small multifamily low-income subgoal
benchmark at 2.0 percent. One trade association stated that the
proposed housing goals appropriately reflect past performance of the
Enterprises and maintain their focus on serving the low- and very low-
income renter community. Another trade association stated that the
proposed benchmarks strike an appropriate balance, ensuring the
Enterprises fulfill their mission to promote affordability while
continuing to provide liquidity across the broader multifamily market.
These two trade associations strongly supported the proposal to
maintain the small multifamily low-income subgoal at 2.0 percent,
noting that this segment already benefits from robust private capital
participation. Regarding the proposed very low-income goal, one trade
association expressed support for the 14.0 percent benchmark given the
past performance of the Enterprises and the critical need for housing
for this income cohort.
Of the remaining commenters on the multifamily housing goals, one
trade association suggested increasing the low-income goal due to the
Enterprises' track record of exceeding the 61 percent benchmark and
ongoing national shortages of affordable rental housing for low-income
households. The group noted that the need for affordable rental housing
is well-documented and growing. Another trade association stated that
the low-income goal should only be increased if the single-family
housing goals are similarly increased, so as not to create an imbalance
between rental and homeownership opportunities.
All the comments on the proposed multifamily housing goal benchmark
levels emphasized the importance of the role of the multifamily housing
goals in the affordable rental housing finance market. One letter
submitted on behalf of 28 organizations stated that the multifamily
housing goals are important in addressing the affordable rental housing
crisis. Another letter submitted on behalf of 17 organizations noted
that the Enterprises back more than 40 percent of multifamily mortgage
debt, giving them a critical role in supporting affordable rental
housing.
Additionally, a trade association recommended that FHFA help the
Enterprises balance their multifamily housing goals with providing
liquidity support for market-rate units. The Agency agrees that the
Enterprises should support both affordable and market-rate units. FHFA
considers market-rate units when setting the cap on multifamily
purchase volume (the Multifamily Volume Cap) and the percent of loans
purchased that must be ``mission-driven'' affordable housing.\41\ The
Enterprise housing goals, however, are focused on families at or below
specific AMI levels.
---------------------------------------------------------------------------
\41\ FHFA establishes an annual cap on the multifamily purchase
volume of each Enterprise. FHFA also establishes a percentage of
multifamily purchases within the cap that must be ``mission-
driven,'' a defined term, that generally encompasses affordable and
underserved market segments.
---------------------------------------------------------------------------
The recent performance of the Enterprises on each of the
multifamily housing goals and subgoal is shown in the tables below.
Note that for each of the multifamily goals and subgoal, starting in
2023, the benchmark metrics changed from the number of low-income units
to the share of low-income units.
Table 5--Multifamily Low-Income Housing Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Historical performance
Year ---------------------------------------------------- 2025 2026 2027 2028
2021 2022 2023 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low-Income Multifamily Benchmark................ 315,000 415,000 61.0% 61.0% 61.0% 61.0% 61.0% 61.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low-Income Multifamily Units.................... 384,488 419,361 317,032 270,357 ........... ........... ........... ...........
Total Multifamily Units......................... 557,152 542,347 415,513 398,661 ........... ........... ........... ...........
Low-Income % Total.............................. 69.0% 77.3% 76.3% 68.0% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Freddie Mac Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low-Income Multifamily Units.................... 373,225 420,107 231,968 302,324 ........... ........... ........... ...........
Total Multifamily Units......................... 540,541 567,249 345,702 463,113 ........... ........... ........... ...........
Low-Income % of Total Units..................... 69.0% 74.1% 67.1% 65.3% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 59960]]
Table 5 shows the number and share of goal-qualifying low-income
multifamily units in properties backing mortgages acquired by each
Enterprise from 2021 through 2024.\42\ In addition, the historical
performance share 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.\43\
---------------------------------------------------------------------------
\42\ 12 CFR 1282.16 (Special Counting Requirements).
\43\ See ``2023-2024 Multifamily Enterprise Housing Goals,''
(Proposed Rule), 87 FR 50794, 50800 (Aug. 18, 2022), available at
<a href="https://www.federalregister.gov/documents/2022/08/18/2022-17868/2023-2024-multifamily-enterprise-housing-goals">https://www.federalregister.gov/documents/2022/08/18/2022-17868/2023-2024-multifamily-enterprise-housing-goals</a>.
Table 6--Multifamily Very Low-Income Housing Goal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Historical performance
Year ---------------------------------------------------- 2025 2026 2027 2028
2021 2022 2023 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Low-Income Multifamily Benchmark........... 60,000 88,000 12.0% 12.0% 14.0% 14.0% 14.0% 14.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Low-Income Multifamily Units............... 83,459 127,905 77,509 57,796 ........... ........... ........... ...........
Total Multifamily Units......................... 557,152 542,347 415,513 398,661 ........... ........... ........... ...........
Very Low-Income % of Total Units................ 15.0% 23.6% 18.7% 14.5% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Freddie Mac Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Low-Income Multifamily Units............... 87,854 127,733 71,217 70,795 ........... ........... ........... ...........
Total Multifamily Units......................... 540,541 567,249 345,702 463,113 ........... ........... ........... ...........
Very Low-Income % of Total Units................ 16.3% 22.5% 20.6% 15.3% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 6 shows the number and share of goal-qualifying very low-
income multifamily units as a percentage of the total goal-eligible
units in properties backing mortgages acquired by each Enterprise from
2021 through 2024. In addition, the historical performance share
average for the pre-pandemic years of 2017-2019 would have been 13.1
percent for Fannie Mae and 15.6 percent for Freddie Mac.\44\
---------------------------------------------------------------------------
\44\ See ``2023-2024 Multifamily Enterprise Housing Goals,''
(Proposed Rule), 87 FR 50794, 50801 (Aug. 18, 2022), available at
<a href="https://www.govinfo.gov/content/pkg/FR-2022-08-18/pdf/2022-17868.pdf">https://www.govinfo.gov/content/pkg/FR-2022-08-18/pdf/2022-17868.pdf</a>.
Table 7--Small (5-50 Units) Multifamily Low-Income Subgoal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Historical performance
Year ---------------------------------------------------- 2025 2026 2027 2028
2021 2022 2023 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Small Low-Income Multifamily 10,000 17,000 2.5% 2.5% 2.0% 2.0% 2.0% 2.0%
Benchmark......................................
Freddie Mac Small Low-Income Multifamily 10,000 23,000 2.5% 2.5% 2.0% 2.0% 2.0% 2.0%
Benchmark......................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Low-Income Multifamily Units.............. 14,409 21,436 13,241 11,182 ........... ........... ........... ...........
Total Multifamily Units......................... 557,152 542,347 415,513 398,661 ........... ........... ........... ...........
Low-Income % of Total Multifamily Units......... 2.6% 4.0% 3.2% 2.8% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Freddie Mac Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Low-Income Multifamily Units.............. 31,913 27,103 14,006 15,639 ........... ........... ........... ...........
Total Multifamily Units......................... 540,541 567,249 345,702 463,113 ........... ........... ........... ...........
Low-Income % of Total Multifamily Units......... 5.9% 4.8% 4.1% 3.4% ........... ........... ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 7 shows Enterprise performance on this subgoal, including the
previous numeric benchmark levels applicable through 2022 and the
percentage-based metric that began in 2023. FHFA recognizes that the
Enterprises have different business approaches to the small multifamily
market segment, and that each Enterprise sets its own credit risk
tolerance for these products. As a result, each Enterprise has
performed very differently on this subgoal. Since 2021, Freddie Mac has
exceeded Fannie Mae in terms of percentage share of total units and
volume of low-income units in small (5-50) multifamily properties.
Based on the comments received and FHFA's consideration of the
statutory factors, including the recent performance of the Enterprises
and the market forecasts shown in the tables above, FHFA has determined
that the benchmark levels for each of the multifamily housing goals and
subgoal should be established at the levels proposed. FHFA believes
that this approach will appropriately balance the objectives of the
housing goals and the Multifamily Volume Cap. FHFA also agrees with
commenters that maintaining the three multifamily goals at current
levels is appropriate and believes that the benchmark levels support
affordable housing.
C. Simplify Enterprise Multifamily Goals and Targets
One trade association encouraged FHFA to work towards harmonizing
the multifamily affordable and mission-related goals of the Enterprises
(including the housing goals that are the subject of this final rule
and the annual ``mission-driven'' requirements associated with the
Multifamily Volume Cap). According to the trade association, the
Enterprises' multifamily businesses operate to meet two affordable
housing targets every year, one based on unit
[[Page 59961]]
count and the other based on a dollar volume limit with required
minimum percentages. The commenter stated that this is a confusing
process whereby each Enterprise must meet two different affordability
frameworks.
FHFA has already taken measures to assist the Enterprises in
coordinating their efforts with respect to these requirements. Both of
these requirements help ensure that the Enterprises fulfill a different
aspect of their statutory mission and charters, and each requirement
serves low- and moderate-income families and underserved markets in
different ways. For example, FHFA's 2023-2024 Multifamily Enterprise
Housing Goals final rule established the benchmark levels for the
multifamily housing goals based on a different methodology--the
percentage of affordable units in multifamily properties financed by
mortgages purchased by the Enterprise each year. FHFA believes this
change simplifies the multifamily housing goals in a way that
complements the Multifamily Volume Cap and enables the Enterprises to
meet both targets more seamlessly. FHFA will continue to explore ways
to coordinate and streamline the requirements of the various
multifamily affordable and mission-related goals of the Enterprises
while ensuring these goals are achieved.
VI. Other Issues
A. 12866 Regulatory Impact & Single-Family Market Forecast
Recommendations
Five commenters responded to FHFA's regulatory impact analysis and
12866 significance determination. Overall, commenters expressed concern
about evidence provided in FHFA's regulatory impact analysis. Advocacy
groups opposed FHFA's estimated decrease in goal-qualified loans under
the proposed rule, stating that the estimate is inaccurate and should
incorporate the assumption that lenders will stop making loans to low-
income borrowers if the housing goals were lowered. Additionally,
nonprofit policy advocacy groups and trade associations asserted the
regulatory impact analysis included insufficient data and over-relied
on anecdotal evidence. For example, groups argued that several
arguments lacked credible evidence, including claims by FHFA in the
proposed rule that FHA, VA, and USDA loans may better meet borrowers'
needs than Enterprise loans, and that the Enterprises have been turning
away middle-class borrowers to meet housing goals.
One commenter, representing 28 national and state advocacy groups,
believed FHFA included contradictory reasoning within the regulatory
impact analysis. Specifically, the commenter noted, FHFA states that
the Enterprises' acquisition of goal loans under the proposed rule will
not change from current levels, yet also acknowledges a factor that
could dissuade the Enterprises from acquiring the same volume of goal
loans: the lower returns the Enterprises receive on housing-goal-
qualifying loans. Other commenters urged FHFA to conduct further data-
driven analysis of the proposed rule's impact to housing goal
acquisitions. Advocacy groups also urged FHFA to study the
effectiveness of housing goals in accomplishing statutory intent and
provide empirical evidence to support FHFA's anecdotal claims before
making further regulatory decisions. Some individual commenters
suggested FHFA evaluate the effectiveness of the proposed rule post-
implementation to learn and adjust for future rulemakings.
State and national policy advocacy groups also raised a series of
data concerns with the market forecast model for single-family goals.
First, groups recommended that FHFA avoid setting the benchmarks below
historic and expected mortgage market level without sufficient evidence
and model data to support the decisioning. Additional market forecast-
related concerns include claims that the rule relies on the same data
and market forecast used in the 2025-2027 rule, which set higher
single-family benchmarks, but now reaches the opposite conclusion by
lowering benchmarks. Individual commenters, advocacy groups, and trade
associations urged FHFA to maintain a data-driven approach to setting
the benchmarks, respecting the data integrity and analytical rigor in
goal setting.
Responding to the first concern raised by advocacy groups that
FHFA's regulatory impact analysis shows an inaccurate decrease in the
number of loans to low-to moderate-income households over the next
three years, FHFA considered impacts to loan deliveries across likely
and unlikely scenarios. In accordance with OMB's Circular No. A-4,
Executive Order 12866, 44 U.S.C. 3501-3521, and 31 U.S.C. 1105, FHFA
provided an estimate of impact under a range of scenarios, to account
for unforeseen factors including market uncertainty. While FHFA
acknowledges stakeholder concerns regarding the estimated likely and
unlikely impact as identified in the regulatory impact analysis, the
Agency provided this analysis using the most up to date and accurate
data available. Addressing the concern that lenders may not make loans
to low- to moderate-income households without Enterprise backing, FHFA
anticipates no reduction in Enterprise support for such loans and, as
such, no adverse changes in lender activity. As articulated in the
preamble to the proposed rule, both Enterprises have a statutory
mandate to provide these loans, regardless of established benchmark
levels.\45\ Further, lenders have an economic incentive to purchase
these loans due to pricing benefits, and these loans are profitable for
the Enterprises to purchase.\46\ Lastly, historical performance data
demonstrates that the Enterprises are likely to deliver above the
benchmark number, and more similar to the market.\47\ Therefore, FHFA
believes that the current benchmark levels will not lead to a reduction
in support and instead will best promote homeownership.
---------------------------------------------------------------------------
\45\ See ``2026-2028 Enterprise Housing Goals,'' 90 FR 47644
(Oct. 2, 2025).
\46\ Ibid.
\47\ Ibid.
---------------------------------------------------------------------------
FHFA acknowledges that certain statements in the proposed rule,
when taken in isolation can be perceived as ``contradictory.'' However,
FHFA finds it inappropriate to isolate these statements and not
consider the full arguments articulated. For example, given the
argument that FHFA makes contradictory statements about whether the
Enterprises will purchase loans to low-income borrowers, the fact that
goal qualifying loans can be less profitable for the Enterprises should
not lead to the conclusion that the Enterprises will stop providing
liquidity. Lenders and the Enterprises have clear statutory obligations
and economic incentives to deliver loans to low- and moderate-income
borrowers, such as spec pool trading pay-ups.\48\ Addressing the
concern about the lack of sufficient data on the benefit of the VA/RHS
and FHA for low-income borrowers in comparison to Enterprise loans,
FHFA provided a summary of how many low-income borrowers were served by
VA/RHS and FHA loans in 2024 in the preamble to the proposed rule.\49\
This evidence makes clear that non-Enterprise players have a valuable
stake in serving low to moderate income borrowers. Concerning
sentiments that FHA mortgages are not cheaper alternatives than
Enterprise loans, FHFA does not agree that FHA loans are always a more
expensive or less
[[Page 59962]]
attractive alternative. Borrower costs and loan decisions depend on
multiple factors that include credit risk, loan structure, expected
tenure, down payment or closing cost constraints, and prevailing market
conditions. For some borrowers, FHA products may be more attractive due
to lower upfront cash requirements, underwriting flexibility, or other
alignments with their financial circumstances. However, FHFA does
acknowledge that there may be, on-net, increased costs for the group of
borrowers shifting from Enterprise-backed mortgages to non-conventional
mortgages as a result of this rule. FHA loans play a critical role in
expanding access to mortgage credit and, along with VA/RHS, operate as
part of a diverse system of federal housing finance programs rather
than one with direct competitors or substitutes for Enterprise-backed
products.
---------------------------------------------------------------------------
\48\ For further discussion please reference: See ``2026-2028
Enterprise Housing Goals,'' 90 FR 47644 (Oct. 2, 2025).
\49\ See ``2026-2028 Enterprise Housing Goals,'' 90 FR 47642-3
(Oct. 2, 2025).
---------------------------------------------------------------------------
FHFA considered commenters' concerns about reliance on anecdotal
evidence within 12866. FHFA acknowledges that empirical evidence
provides a scientific basis for decision-making. However, the Agency
notes that qualitative and anecdotal evidence can be an important
source of decisioning, especially with limited data available on a
problem.\50\ FHFA intends to use its observations of how aggressively
high housing goals lead to market distortions, crowding-out effects,
and ``denominator-management,'' to spark further investigation and
empirical research into these claims, although it is not prepared to
commit to publishing any specific research or review at this time.
Further, as noted above, FHFA's regulatory impact analysis did provide
empirical evidence for the denominator management effect based on all
available agency data which includes entire portfolio information from
both Enterprises as well as a nationally representative sample of all
residential mortgages in the United States.\51\ This indicates that, on
the margins, lenders may be turning away middle-class borrowers.
Performance under the proposed benchmarks will provide FHFA with the
additional empirical data necessary to further study the impact of the
lowered benchmarks and gain more insight into the nature of our
preliminary observations. Since 2013, FHFA has consistently increased
the benchmarks for most single-family goals,\52\ yet housing
affordability continues to be a challenge for Americans. The Agency
believes that this alternative approach may best meet the Agency's
policy goals to ensure a liquid housing market for all Americans, while
continuing to support lower-income families.
---------------------------------------------------------------------------
\50\ See Lim, W.M. ``What Is Qualitative Research? An Overview
and Guidelines.'' (2024), available at <a href="https://journals.sagepub.com/doi/10.1177/14413582241264619">https://journals.sagepub.com/doi/10.1177/14413582241264619</a>, & Limb CJ. ``The Need for Evidence in
an Anecdotal World. Trends Amplif.'' (2011), available at <a href="https://pmc.ncbi.nlm.nih.gov/articles/PMC4040832/">https://pmc.ncbi.nlm.nih.gov/articles/PMC4040832/</a>.
\51\ Significant Regulatory Action Assessment and Regulatory
Impact Analysis for 2026-2028 Enterprise Housing Goals Proposed Rule
(p. 13). Federal Housing Finance Agency, available at <a href="https://www.fhfa.gov/sites/default/files/2025-10/2026-2028-enteprise-housing-goals-proposed-rule-regulatory-impact-analysis.pdf">https://www.fhfa.gov/sites/default/files/2025-10/2026-2028-enteprise-housing-goals-proposed-rule-regulatory-impact-analysis.pdf</a>.
\52\ See U.S. Federal Housing, ``Housing Goals Performance
Page,'' available at <a href="https://www.fhfa.gov/programs/affordable-housing/housing-goals-performance">https://www.fhfa.gov/programs/affordable-housing/housing-goals-performance</a>.
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FHFA's decisioning behind setting the benchmarks below the
historical and expected market delivery is aimed at addressing current
market uncertainty with predictions. By setting most benchmarks at the
low end of the model confidence interval, or just below the model
estimates, FHFA provides flexibility for the Enterprises while still
holding them to statutory obligations. FHFA considered the seven
statutory factors in establishing the benchmarks, including the market
forecast. However, FHFA weighed the evidence of the past performance of
the Enterprises in achieving the benchmarks and the ability of the
Enterprises to lead the industry, more heavily in its decisioning given
Agency priorities. Instead of relying primarily on the uncertain
single-family market forecast model, as in previous rulemakings, FHFA
considered the model as one of many factors considered when setting the
final benchmark levels. It is important to note that the Agency has
never relied solely on the model output to set goals, and has set the
housing goal benchmarks in the context of all the statutory factors.
Therefore, FHFA finds the benchmarks appropriately balance flexibility
and market forecast data to set the benchmarks at the proposed level.
B. Regulatory Capacity & Accountability Mechanisms
The agency received comments on how the proposed rule impacts
regulatory capacity and function. Individual commenters and trade
associations commended FHFA for its efforts to reduce regulatory
burden, streamline processes, and enhance operational efficiency. They
argued that the lower benchmarks appropriately balance statutory
obligations with the need for greater efficiency in loan pricing and
the minimization of duplication across the secondary mortgage market.
Trade associations also praised FHFA's holistic approach in the
proposed rule, highlighting the importance of ensuring optimal loan
execution for borrowers in the market. In contrast, advocacy groups
contended that there is insufficient evidence to demonstrate that the
proposed changes will meaningfully improve operational efficiency or
reduce regulatory burden for FHFA, the Enterprises, or the broader
housing market.
National, state, and local advocacy groups emphasized that housing
goals are a critical accountability mechanism for FHFA to ensure the
Enterprises serve low- to moderate-income borrowers. These groups
argued that the proposed single-family benchmarks weaken FHFA's
regulatory authority and asserted that this accountability mechanism
should be strengthened, not diminished, given current affordability
challenges. Nonprofits and advocacy organizations also encouraged FHFA
to take a more active role in adjusting policy in real time to reflect
public needs and current housing conditions.
FHFA finds that the proposed rule will reduce regulatory burden.
The Enterprises are likely to save on expenses associated with meeting
and monitoring housing goals and responding to regulatory requests
under a housing plan, as the lower benchmarks are more achievable given
current and projected market conditions. By removing the complexity of
multiple low-income area subgoals, the proposed rule provides the
Enterprises with a clearer framework for underwriting, investment,
pricing, and reporting. Evidence of the rule's potential to improve
operational efficiency is presented in FHFA's regulatory impact
analysis, which shows that the Enterprises are expected to issue
approximately $72 billion in additional goal-eligible financing over
2026-2028 without incurring any expenses beyond those already
anticipated under the 2025-2027 housing goal benchmark levels.\53\
---------------------------------------------------------------------------
\53\ Significant Regulatory Action Assessment and Regulatory
Impact Analysis for 2026-2028 Enterprise Housing Goals Proposed Rule
(p. 19). Federal Housing Finance Agency, available at <a href="https://www.fhfa.gov/sites/default/files/2025-10/2026-2028-enteprise-housing-goals-proposed-rule-regulatory-impact-analysis.pdf">https://www.fhfa.gov/sites/default/files/2025-10/2026-2028-enteprise-housing-goals-proposed-rule-regulatory-impact-analysis.pdf</a>.
---------------------------------------------------------------------------
The Agency agrees that the housing goals are a critical
accountability mechanism to ensure the Enterprises serve low- to
moderate-income borrowers. However, FHFA disagrees with commenters who
suggested that lower benchmarks would diminish the Agency's ability to
hold the Enterprises accountable for fulfilling statutory mandates.
While FHFA acknowledges that the proposed single-family
[[Page 59963]]
benchmarks are lower than recent single-family benchmarks, the rule
maintains existing enforcement mechanisms to ensure that the
Enterprises continue to support low- to moderate-income borrowers.\54\
These mechanisms include civil money penalties, housing plans, final
and preliminary determinations of compliance, ongoing monitoring of the
Enterprises, and annual reporting requirements. FHFA, as conservator,
also has additional tools to ensure the Enterprises are supporting
liquidity for low- to moderate-income families and it is FHFA's
intention that the housing goal benchmarks do not represent a cap on
loan purchases.
---------------------------------------------------------------------------
\54\ See U.S. Federal Housing, ``Housing Goals Performance
Page,'' available at <a href="https://www.fhfa.gov/programs/affordable-housing/housing-goals-performance">https://www.fhfa.gov/programs/affordable-housing/housing-goals-performance</a>.
---------------------------------------------------------------------------
FHFA also agrees with commenters that FHFA should adjust policy in
real time to reflect public needs and current housing conditions. FHFA
is committed to actively evaluating policy and the benchmarks to
reflect public needs and current housing conditions, as demonstrated by
the decision to issue the proposed rule. The Agency plans to assess the
impact of the proposed single-family benchmarks on borrowers and will
adjust future policy decisions accordingly. FHFA will also assess
whether more frequent rulemakings for housing goals benchmark setting
would be appropriate and better reflect changing market conditions and
respond to market uncertainty.
C. Measurement Buffer Recommendations
The Agency received comments regarding the application of
measurement buffers and the setting of benchmarks within the housing
goals framework. An industry trade group strongly urged the retention
of measurement buffers, arguing that they are essential to mitigate
market distortions and the challenges posed by using lagged,
potentially year-old data to set static goals. The group noted the
housing industry's sensitivity to rapid shifts in interest rates,
volumes, and macroeconomic conditions, asserting that buffers help
ensure goal compliance when goal levels and actual market production
are misaligned, specifically suggesting the benefit for the single-
family low-income refinance goal. Similarly, an advocacy coalition
voiced concern over removal of the measurement buffers and factored
increasing the benchmark and maintaining the buffers to ensure lower-
income borrowers have reduced access to liquidity. The coalition
believed that lowering the benchmark could permit the Enterprises to
allocate a significantly smaller share of activity to goals-eligible
loans than the market overall.
The Agency agrees that misalignment between the goal levels and
actual market production may result in unintended consequences,
particularly for the low-income refinance goal due to its heightened
sensitivity to outside changes. Based on commenters' feedback, as
discussed above, FHFA has adjusted the low-income refinance goal to the
same level that was in place in prior periods of low-interest rates.
Additionally, the Enterprises may be in compliance with housing goals
if they meet the market, which is determined retrospectively, is not
static, and accurately represents overall market performance. FHFA
believes that having a market-level compliance standard and
implementing the revised benchmark will mitigate any unintended market
distortions. FHFA disagrees that the benchmarks will result in the
Enterprises purchasing a smaller share of goal qualifying loans. Based
on historical data, and, as discussed in the preamble to the proposed
rule and above, the Enterprises have performed above benchmarks and
have incentives to continue to purchase loans made to low-income
borrowers.
D. Notice of Determination of Compliance With Housing Goals
The current housing goals regulation requires FHFA to provide each
Enterprise with a preliminary determination of the Enterprise's
performance each year, whether the Enterprise has met its housing goals
or not. The proposed rule sought to simplify FHFA's process for issuing
preliminary and final determination letters by eliminating the
requirement for FHFA to issue a preliminary determination letter if an
Enterprise has met all of the housing goals for that year. As revised,
FHFA would be required to provide a preliminary determination to an
Enterprise only if the Enterprise failed to meet one or more of its
housing goals for the year.
FHFA did not receive any substantive comments on the proposed
revision to the process for issuing preliminary and final determination
letters. If an Enterprise has met the housing goals, it is not
necessary for the Enterprise to provide additional information in order
for FHFA to reach a final determination. Issuing a preliminary
determination letter in that situation creates unnecessary paperwork,
without a corresponding procedural benefit. The final rule therefore
revises section 1282.20(b) so that a preliminary determination letter
is required only if an Enterprise has failed, or that there is a
substantial probability that an Enterprise will fail, to meet any
housing goal or subgoal.
E. Technical Changes
The proposed rule included several technical changes to conform the
language used in the regulation with FHFA's current processes and with
commonly-used terminology. FHFA did not receive any substantive
comments on the proposed technical changes. For the reasons stated in
the preamble to the proposed rule and summarized below, the final rule
adopts each of the proposed technical changes.
FHFA often uses the terms ``low-income home purchase goal'' and
``very low-income home purchase goal'' to refer to the low-income
families housing goal and the very low-income families housing goal,
respectively, described in 12 CFR 1282.12(c) and (d). Similarly, FHFA
uses the term ``low-income areas home purchase goal'' to refer to the
low-income areas housing goal described in 12 CFR 1282.12(e). FHFA
typically refers to the refinancing housing goal in 12 CFR 1282.12(h)
as the ``low-income refinance goal.'' The final rule adopts each of
these changes to the names of the various housing goals in the relevant
paragraphs.
The final rule also revises section 1282.12(e) to specify that FHFA
will publish the annual notice establishing the benchmark level for the
low-income areas home purchase goal on FHFA's website. This change is
consistent with FHFA's current practice for notices and determinations
related to the Enterprise housing goals.
Finally, the final rule updates how the benchmark levels are
expressed in the regulation. The current regulation does not include
any decimals in the benchmark levels. For example, the benchmark for
the low-income families home purchase goal is expressed as ``25
percent'' rather than ``25.0 percent.'' FHFA has an established
practice has been to determine Enterprise performance on the housing
goals at the first decimal. Updating the numeric expression of the
benchmark levels in the regulation is a technical, non-substantive
change that better aligns the rule language with existing practice, and
reduces the possibility of confusion. The final rule therefore updates
the numeric expression of each benchmark level to include the first
digit after the decimal for each of the single-family and multifamily
benchmark levels.
[[Page 59964]]
F. Required Adjustments To Maximum Civil Money Penalty Amounts
The Safety and Soundness Act authorizes FHFA to seek civil money
penalties to enforce several requirements related to the Enterprise and
Bank housing goals. These civil money penalties are subject to the
Federal Civil Penalties Inflation Adjustment Act Improvements Act of
2015 (Adjustment Improvements Act), which amended the Federal Civil
Penalties Inflation Adjustment Act of 1990 by establishing a mechanism
for regular adjustment for inflation of civil money penalties.\55\
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\55\ Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015, Public Law 114-74, title VII, sec. 701,
129 Stat. 599 (28 U.S.C. 2461 note) (2015), available at <a href="https://www.govinfo.gov/content/pkg/PLAW-114publ74/pdf/PLAW-114publ74.pdf">https://www.govinfo.gov/content/pkg/PLAW-114publ74/pdf/PLAW-114publ74.pdf</a>.
---------------------------------------------------------------------------
The proposed rule would have made explicit the mandatory inflation
adjustments required by law. Additional detail on the calculation
method used by FHFA to determine the new maximum civil money penalty
amounts. FHFA did not receive any substantive comments on the proposed
changes related to the maximum amounts for any civil money penalties
that may be assessed in connection with the Bank or Enterprise housing
goals. The final rule adopts the changes to the relevant sections as
proposed. The new maximum civil money penalty amounts are set out in
this table, summarizing the changes made by this final rule:
----------------------------------------------------------------------------------------------------------------
Adjusted
maximum
U.S. Code citation Description penalty
amount
----------------------------------------------------------------------------------------------------------------
12 U.S.C. 4585(b)(1)......................... Maximum penalty for failure described in 145,754
1345(a)(1), for each day that the failure occurs.
12 U.S.C. 4585(b)(2)......................... Maximum penalty for failure described in 72,876
1345(a)(2), (3), or (4), for each day that the
failure occurs.
----------------------------------------------------------------------------------------------------------------
These new maximum civil money penalty amounts will apply
prospectively to any civil money penalty action initiated in connection
with the Bank or Enterprise housing goals after the effective date of
this final rule. The final rule revises sections 1209.1(c)(4), 1209.80,
1209.81, 1281.15(f), and 1282.22 to make clear that the new maximum
penalty amounts above apply to any civil money penalties in connection
with the Enterprise or Bank housing goals.
VII. Considerations of Differences Between the Banks and the
Enterprises
When promulgating regulations relating to the Banks, section
1313(f) of the Safety and Soundness Act requires the Director of FHFA
to consider the differences between the Banks and the Enterprises with
respect to the Banks' cooperative ownership structure; mission of
providing liquidity to members; affordable housing and community
development mission; capital structure; and joint and several
liability. FHFA, in preparing this final rule, considered the
differences between the Banks and the Enterprises as they relate to the
above factors. FHFA also considered these differences in light of
section 10C of the Bank Act, which requires that the Bank housing goals
be consistent with the Enterprise housing goals, with consideration of
the unique mission and ownership structure of the Banks.
VIII. Regulatory Impact
A. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA), the Office of
Management and Budget (OMB) must ``review and approve proposed agency
collections of information.'' See 44 U.S.C. 3504(c)(1). OMB has
determined that the Enterprise reporting requirements in Subpart D of
Part 1282 constitute a ``collection of information'' for purposes of
the PRA. FHFA has submitted a request for emergency authorization for
the information collection pursuant to 5 CFR 1320.13, and OMB has
approved the request. FHFA may publish additional notice via a separate
Federal Register notice following the issuance of this final rule.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that
a regulation that has a significant economic impact on a substantial
number of small entities, small businesses, or small organizations must
include an initial regulatory flexibility analysis describing the
regulation's impact on small entities. Such an analysis need not be
undertaken if the agency has certified that the regulation will not
have a significant economic impact on a substantial number of small
entities. 5 U.S.C. 605(b). FHFA has considered the impact of the final
rule under the Regulatory Flexibility Act. FHFA certifies that the
final rule will not have a significant economic impact on a substantial
number of small entities because the rule applies to Fannie Mae,
Freddie Mac, and the Federal Home Loan Banks, which are not small
entities for purposes of the Regulatory Flexibility Act.
C. Congressional Review Act and Executive Order 12866, Regulatory
Planning and Review
The Office of Management and Budget, Office of Information and
Regulatory Affairs (OIRA) has determined the final rule meets the
definition of ``major rule'' in the Congressional Review Act at 5
U.S.C. 804(2). OIRA also has determined that this rule is economically
significant under subsection 3(f)(1) of Executive Order 12866. FHFA
submitted a regulatory impact analysis to OIRA, which reviewed the
potential costs and benefits of the final rule. The analysis is
available on FHFA's rulemaking website <a href="https://www.fhfa.gov/regulation/rulemaking">https://www.fhfa.gov/regulation/rulemaking</a> and is part of the docket file for this final rule.
D. Executive Order 13563: Improving Regulation and Regulatory Review
Executive Order 13563 directs agencies to analyze regulations that
are ``outmoded, ineffective, insufficient, or excessively burdensome,
and to modify, streamline, expand, or repeal them in accordance with
what has been learned.'' Executive Order 13563 also directs that, where
relevant, feasible, and consistent with regulatory objectives, and to
the extent permitted by law, agencies are to identify and consider
regulatory approaches that reduce burdens and maintain flexibility and
freedom of choice for the public. FHFA has developed this final rule in
a manner consistent with these requirements.
E. Executive Order 14192: Unleashing Prosperity Through Deregulation
Executive Order 14192 requires that for each new regulation issued,
at least 10 existing regulations be identified for elimination.
Executive Order 14192 also directs that any new incremental costs
associated with new regulations shall, to the extent permitted by law,
be offset by
[[Page 59965]]
the elimination of existing costs associated with at least 10 prior
regulations. FHFA's implementation of these requirements will be
informed by M-25-20, Guidance Implementing Section 3 of Executive Order
14192, Titled ``Unleashing Prosperity Through Deregulation'' (March 26,
2025). This final rule is expected to be an Executive Order 14192
deregulatory action although the cost savings are unquantified.
IX. Severability
The final rule makes explicit FHFA's intent that all provisions of
the Enterprise housing goals regulation be severable by adding a
severability clause, as new 12 CFR 1282.11(c). The regulation contains
many thematically related but ultimately independent regulatory
requirements, each of which can function independently. For example,
FHFA establishes each goal and subgoal independently from one another,
utilizing separate formulas and consideration of differing statutory
factors. If one goal or subgoal is found to be invalid or unenforceable
for any reason, it is FHFA's intention that the remaining goals
continue in effect. Adding a severability clause to the regulation
ensures that each of the distinct policy objectives in the regulation
will be realized to the greatest extent possible.
List of Subjects
12 CFR Part 1209
Administrative practice and procedure, Penalties.
12 CFR Part 1281
Credit, Federal home loan banks, Housing, Mortgages, Reporting and
recordkeeping requirements.
12 CFR Part 1282
Mortgages, Reporting and recordkeeping requirements.
Accordingly, for the reasons stated in the preamble, under the
authority of 12 U.S.C. 4526, FHFA amends parts 1209, 1281, and 1282 of
title 12 of the Code of Federal Regulations, as follows:
PART 1209--RULES OF PRACTICE AND PROCEDURE
0
1. The authority citation for part 1209 continues to read as follows:
Authority: 5 U.S.C. 554, 556, 557, and 701 et seq.; 12 U.S.C.
1430c(d); 12
U.S.C. 4501, 4502, 4503, 4511, 4513, 4513b, 4517, 4526,
4566(c)(1) and (c)(7), 4581-4588, 4631-4641; and 28 U.S.C. 2461
note.
0
2. Revise Sec. 1209.1(c)(4) to read as follows:
Sec. 1209.1 Scope.
* * * * *
(c) * * *
(4) Enforcement proceedings under sections 1341 through 1348 of the
Safety and Soundness Act, as amended (12 U.S.C. 4581 through 4588), and
section 10C of the Federal Home Loan Bank Act, as amended (12 U.S.C.
1430c), except where the Rules of Practice and Procedure in subpart C
are inconsistent with such statutory provisions or with part 1281 or
1282 of this title, in which case the statutory or regulatory
provisions shall apply.
0
3. Revise Sec. 1209.80 to read as follows:
Sec. 1209.80 Inflation adjustments.
The maximum amount of each civil money penalty within FHFA's
jurisdiction, as set by the Safety and Soundness Act and thereafter
adjusted in accordance with the Inflation Adjustment Act, is as
follows:
Table 1 to Sec. 1209.80
----------------------------------------------------------------------------------------------------------------
Catch-up
adjusted
U.S. Code citation Description maximum
penalty
amount
----------------------------------------------------------------------------------------------------------------
12 U.S.C. 4636(b)(1)......................... First Tier....................................... $14,575
12 U.S.C. 4636(b)(2)......................... Second Tier...................................... 72,876
12 U.S.C. 4636(b)(4)......................... Third Tier (Regulated Entity or Entity-Affiliated 2,915,057
party).
12 U.S.C. 4585(b)(1)......................... Maximum penalty for failure described in section 145,754
1345(a)(1), for each day that the failure occurs.
12 U.S.C. 4585(b)(2)......................... Maximum penalty for failure described in section 72,876
1345(a)(2), (3), or (4), for each day that the
failure occurs.
----------------------------------------------------------------------------------------------------------------
0
4. Revise Sec. 1209.81 to read as follows:
Sec. 1209.81 Applicability.
(a) Applicability to penalties under 12 U.S.C. 4636. The inflation
adjustments set out in Sec. 1209.80 for 12 U.S.C. 4636 shall apply to
civil money penalties assessed in accordance with the provisions of the
Safety and Soundness Act, 12 U.S.C. 4636, and subparts B and C of this
part, for violations occurring on or after January 15, 2025.
(b) Applicability to penalties under 12 U.S.C. 4585. The inflation
adjustments set out in Sec. 1209.80 for 12 U.S.C. 4585 shall apply to
civil money penalties assessed under the provisions of the Safety and
Soundness Act, 12 U.S.C. 4585 and subpart C of this part. The inflation
adjusted maximum civil money penalty amounts shall apply to violations
occurring on or after the effective date of this section.
PART 1281--FEDERAL HOME LOAN BANK HOUSING GOALS
0
5. The authority citation for part 1281 continues to read as follows:
Authority: 12 U.S.C. 1430, 1430b, 1430c, 1431.
Sec. 1281.15 [Amended]
0
6. In Sec. 1281.15(f), add the phrase ``and applicable provisions in
part 1209 of this title'' after ``in 12 U.S.C. 4581 through 4588'' in
the last sentence.
PART 1282--ENTERPRISE HOUSING GOALS AND MISSION
0
7. The authority citation for part 1282 continues to read as follows:
Authority: 12 U.S.C. 4501, 4502, 4511, 4513, 4526, 4561-4566.
0
8. Amend Sec. 1282.11 by:
0
a. Revising paragraph (a)(1); and
0
b. Adding paragraph (c).
The revision and addition read as follows:
Sec. 1282.11 General.
(a) * * *
(1) Three single-family owner-occupied purchase money mortgage
housing goals, a single-family owner-occupied purchase money mortgage
housing subgoal, a single-family refinancing mortgage housing goal, two
multifamily housing goals, and a multifamily housing subgoal;
* * * * *
(c) Severability. FHFA intends the various provisions of this part
to be
[[Page 59966]]
separate and severable from one another. If any provision of this part,
or any application of a provision, is stayed or determined to be
invalid or unenforceable, the remaining provisions or applications will
continue in effect.
0
9. Amend Sec. 1282.12 by:
0
a. Revising the heading to paragraph (c) introductory text and
paragraph (c)(2);
0
b. Revising the heading to paragraph (d) introductory text and
paragraph (d)(2);
0
c. Revising the heading to paragraph (e) introductory text and
paragraph (e)(2);
0
d. Revising paragraph (f);
0
e. Removing paragraph (g);
0
f. Redesignating paragraph (h) as paragraph (g); and
0
g. Revising the heading to newly designated paragraph (g) and paragraph
(g)(2). The revisions read as follows:
Sec. 1282.12 Single-family housing goals.
* * * * *
(c) Low-income home purchase goal. * * *
(2) The benchmark level, which for 2026, 2027, and 2028 shall be
21.0 percent of the total number of purchase money mortgages purchased
by that Enterprise in each year that finance owner-occupied single-
family properties.
(d) Very low-income home purchase goal. * * *
(2) The benchmark level, which for 2026, 2027, and 2028 shall be
3.5 percent of the total number of purchase money mortgages purchased
by that Enterprise in each year that finance owner-occupied single-
family properties.
(e) Low-income areas home purchase goal. * * *
(2) A benchmark level which shall be set annually by FHFA by notice
based on the benchmark level for the low-income areas home purchase
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. FHFA will make the notice available on FHFA's website,
<a href="http://www.fhfa.gov">www.fhfa.gov</a>.
(f) Low-income areas home purchase 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 families
in low-income census tracts or 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 2026, 2027, and 2028 shall be
16.0 percent of the total number of purchase money mortgages purchased
by that Enterprise in each year that finance owner-occupied single-
family properties.
(g) Low-income refinance goal. * * *
(2) The benchmark level, which for 2026, 2027, and 2028 shall be
21.0 percent of the total number of refinancing mortgages purchased by
that Enterprise in each year that finance owner-occupied single-family
properties.
* * * * *
Sec. 1282.13 [Amended]
0
10. Amend Sec. 1282.13 by:
0
a. In paragraph (b), removing the phrase ``61 percent'' and adding in
its place the phrase ``61.0 percent'', and removing the phrase ``for
2025, 2026, and 2027'' and adding in its place the phrase ``for 2026,
2027, and 2028'';
0
b. In paragraph (c), removing the phrase ``14 percent'' and adding in
its place the phrase ``14.0 percent'', and removing the phrase ``for
2025, 2026, and 2027'' and adding in its place the phrase ``for 2026,
2027, and 2028''; and
0
c. In paragraph (d), removing the phrase ``2 percent'' and adding in
its place the phrase ``2.0 percent'', and removing the phrase ``for
2025, 2026, and 2027'' and adding in its place the phrase ``for 2026,
2027, and 2028''.
Sec. 1282.15 [Amended]
0
11. In Sec. 1282.15(b)(2), remove the word ``subgoals'' and add in its
place the word ``subgoal''.
0
12. Revise Sec. 1282.20 to read as follows:
Sec. 1282.20 Preliminary determination of compliance with housing
goals; notice of preliminary determination.
(a) Preliminary determination. On an annual basis, the Director
will evaluate each Enterprise's performance under each single-family
housing goal and subgoal and each multifamily housing goal and subgoal.
(b) Notice of preliminary determination. If the Director
preliminarily determines that an Enterprise has failed, or that there
is a substantial probability that an Enterprise will fail, to meet any
housing goal or subgoal, the Director will provide written notice to
the Enterprise of the preliminary determination of its performance
under each housing goal and subgoal established by this subpart, before
public disclosure of the preliminary determination. The written notice
will include the reasons for such determination, and the information on
which the Director based the determination.
(c) Response by Enterprise. Any notification to an Enterprise of a
preliminary determination under this section will provide the
Enterprise with an opportunity to respond in writing in accordance with
the procedures at 12 U.S.C. 4566(b)(1) and (2). Relevant information in
a timely written response from an Enterprise will be included in the
information the Director considers when making a determination of
housing goals compliance under Sec. 1282.21.
0
13. Revise Sec. 1282.21 to read as follows:
Sec. 1282.21 Determination of compliance with housing goals, notice
of determination.
(a) Determination. On an annual basis, the Director will make a
final determination of each Enterprise's performance under each single-
family housing goal and subgoal and each multifamily housing goal and
subgoal. The determination will address whether an Enterprise has
failed, or there is a substantial probability that an Enterprise will
fail, to meet any housing goal or subgoal and whether the achievement
of that housing goal or subgoal was or is feasible.
(b) Notice of determination. The Director will provide each
Enterprise with written notification of the determination in accordance
with the procedures at 12 U.S.C. 4562(f) and 12 U.S.C. 4566(b)(3). If
the Enterprise has met each of the housing goals and subgoals, the
notification will provide the Enterprise with an opportunity to comment
on the determination during the 30-day period beginning upon receipt of
the notification by the Enterprise. If the Enterprise has failed, or
there is a substantial probability that an Enterprise will fail, to
meet any housing goal or subgoal that FHFA determines was or is
feasible, the notification will specify whether the Enterprise is
required to submit a housing plan for approval under Sec. 1282.22.
Sec. 1282.22 [Amended]
0
14. Amend Sec. 1282.22 by:
0
a. Removing paragraph (b);
0
b. Redesignating paragraphs (c), (d), (e), (f), (g) as paragraphs (b),
(c), (d), (e), (f); and
0
c. In newly redesignated paragraph (f) removing ``in accordance with 12
U.S.C. 4581,'' and adding in its place the word ``or'' and removing
``12 U.S.C. 4585'' and adding in its place ``12 U.S.C. 4581
[[Page 59967]]
through 4585 and applicable provisions in part 1209 of this title''.
* * * * *
Clinton Jones,
General Counsel, Federal Housing Finance Agency.
[FR Doc. 2025-23746 Filed 12-22-25; 8:45 am]
BILLING CODE 8070-01-P
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