The regulator of Fannie Mae and Freddie Mac is proposing that the two government-controlled enterprises increase their purchases of loans secured by manufactured housing and rural properties.
Under the Housing and Economic Recovery Act of 2008, the secondary lenders are required to serve very low-, low- and moderate-income families, the Federal Housing Finance Agency said in a news release today. Three underserved markets specified in the act are manufactured housing, affordable housing preservation and rural markets.
In line with the pre-conservatorship provisions, FHFA has proposed a rule that would require Fannie and Freddie to take the necessary steps to “increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for underserved markets while adhering to the requirements of conservatorship.”
While the two companies are not allowed to engage in new lines of business during their conservatorship, providing liquidity to the three markets is considered among their core statutory purposes.
Under FHFA’s proposal, Fannie and Freddie would be evaluated this year and each subsequent year based on how well they served these markets. The evaluation will factor in product development, the degree to which they reach out to sellers, the volume of loans purchased as a share of the available market and the amount of investments and grants in projects targeted at underserved markets.
