The Federal Housing Finance Agency
(FHFA), as the regulator of the 12 Federal Home Loan Banks
(FHLBs), proposed a rule (download here
) to implement housing goals for the banks' purchases of mortgages.
The FHFA is seeking comment on the establishment of three purchase money mortgage goals and one refinancing mortgage goal.
The goals for purchase mortgages would separately measure performance on purchase mortgages for low-income families, for families in low-income areas, and for very-low-income families. The goal for refinance mortgages would measure performance on refinancings for low-income families.
The goals would apply to FHLB purchases of mortgages secured by owner-occupied single-family properties under the Acquired Member Assets (AMA) programs. A FHLB would be subject to the goals if its AMA-approved purchases exceed $2.5bn in a year.
The proposed mortgage purchase goals come as the market share of the FHLBs' purchase activity is rebounding from boom-era lows alongside the growth seen in 2008 and 2009 in Fannie Mae (FNM)
and Freddie Mac (FRE)
The FHFA noted that FHLBs may participate in AMA programs on a discretionary basis. Under the program requirements, banks are approved to purchase only single-family, fixed-rate mortgages below the conforming limit.
As of March 31, 2010, the combined value of AMA mortgage loans at the FHLBs totaled $69bn.
Write to Diana Golobay
Disclosure: the author holds no relevant investments.