Freddie Mac misses low-income refinancing target

Fannie mae meets all housing goals Federal Housing Finance Agency imposed for 2020, but Freddie mac failed its low income refinancing goal.

The government-sponsored company has fallen behind the broader market in its acquisitions of low-income refinancing. Freddie Mac has 45 days to submit a plan to the FHFA for the actions it will take over the next three years to get back on track, according to a letter the regulator sent to Freddie Mac.

The FHFA determined that the share of low-income refinancing of the broader market was 21%, while only 19.7% of the nearly 2.5 million mortgage loans refinanced Freddie Mac acquired last year were low income. The FHFA also determined that meeting the 2020 target was doable for Freddie Mac. The GSE met the target the year before, when 22.4% of its refinanced mortgages were low-income.

In a statement, FHFA Acting Director Sandra Thompson highlighted the benefits for borrowers who refinance with historically low mortgage rates. Thompson tasked Freddie Mac with developing a business strategy to help more low-income households take advantage of this opportunity.

“Achieving housing goals is not optional, and the FHFA will continue to work with businesses to ensure they meet their statutory and scorecard conservation requirements,” said Thompson.


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In August, Thompson proposed more ambitious affordability targets for GSEs. The new goals, which come into effect in 2022, included two new single-family home buying sub-goals to replace the current low-income areas sub-goal: a new sub-goal targets low-income neighborhoods, while the other targets minority communities.

In particular, the target for refinancing low-income people will drop from 21% to 26%.

The FHFA has also put more emphasis on affordability in its annual GSE dashboard, which the regulator and curator use to communicate their priorities and expectations to Fannie Mae and Freddie Mac.

GSEs have sometimes struggled to meet their affordability goals. Yet housing affordability advocates have said the goals have historically been so conservative as to be “meaningless.” Advocates argue that GSEs should lead the market in affordability, not behind.

In the past 11 years, Fannie Mae has missed her low income buying goals three times and failed to meet her very low income goals five times. Freddie Mac has missed his low and very low income goals five times each since 2010, according to an August 2021 report on their performance.

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