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Politics & MoneyMortgage

FHFA proposes ambitious housing goals for GSEs

Proposed housing goals would require Fannie and Freddie to increase mortgage purchases in minority and low-income communities

The Biden administration will use the most effective tool in its toolkit to increase minority homeownership: the Federal Housing Finance Agency (FHFA).

The FHFA on Wednesday proposed new affordable housing goals for Fannie Mae and Freddie Mac, goals that would require it to “responsibly promote equitable access to affordable housing that reaches low- and moderate-income families, minority communities, rural areas, and other underserved populations.”

The federal regulator said that for 2022 through 2024, it is proposing two new single-family home purchase subgoals to replace the existing low-income areas subgoal: One new subgoal targets low-income neighborhoods, while the other targets minority communities.

A mortgage qualifies under the new minority census tract subgoal if the borrower has an income below the area median income, and the property is in a census tract where the median income is below the AMI and minorities make up at least 30% of the population.

“The new subgoal for minority census tracts was designed to help preserve and support affordable housing in communities of color. The subgoal benefits families at or below area median income, allowing them to stay in the communities they helped build,” said FHFA Acting Director Sandra Thompson. “The Enterprises’ housing goals over the next three years should support equitable access to sustainable affordable housing opportunities in a safe and sound manner that bolsters the health of communities.”

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Presented by: Equifax

To meet a single-family housing goal or subgoal, the percentage of mortgage purchased by Fannie or Freddie in the category must exceed the figure set by the FHFA, which is determined by HMDA data.

The current benchmark level (2018-2021) for single family housing goals has a low-income home purchase goal of 24%. Under the proposed benchmark level, that would increase to 28%. The very low-income home purchase goal, currently at 6%, would increase to 7% between 2022 and 2024. Additionally, the subgoal for minority census tract home purchases would be 10% and low-income census tract home purchases at 4%. The low-income refinance goal would increase to 26% from 21%.

The FHFA is asking for stakeholder comments within 60 days of publication in the Federal Register.

The proposal is just the latest sign that the Biden administration is prioritizing racial justice initiatives through housing agencies. Just last week, the Biden administration announced that the FHFA and Department of Housing and Urban Development would team up on fair housing enforcement. The administration also tapped Susan Rice to co-lead an inquiry into racial bias in the appraisal industry.


  1. How will lenders respond to this goal? Does the response come in the form of product prioritization? Marketing efforts?

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