FHFA Director Appointed to Head Fannie Mae and Freddie Mac Boards Amid Shake-Ups.

The Federal Housing Finance Agency (FHFA) has removed eight members from Fannie Mae's board and added four new members, including FHFA Director William Pulte. Pulte will now head the boards of Fannie Mae and Freddie Mac, following shake-ups at the two mortgage giants.

The Federal Housing Finance Agency (FHFA) has recently announced significant changes to the leadership and governance of Fannie Mae and Freddie Mac. In this article, we will discuss the implications of these developments and the FHFA's newly established affordable housing goals for 2025-2027 [1].

FHFA Director William Pulte, who has been appointed to lead both Fannie Mae and Freddie Mac boards, replaces eight members from each institution's board. The shake-up follows Pulte's efforts to strengthen the housing finance system and ensure that these organizations fulfill their missions effectively [2].

The new affordable housing goals set by the FHFA are designed to support equitable housing access for low-income families and families in low-income areas. According to the FHFA, the Enterprises must meet specific benchmark levels for single-family and multifamily housing goals to fulfill their obligations [1].

For single-family housing goals, the Enterprises must ensure that a minimum percentage of loans falls into each category, including low-income home purchases, very low-income home purchases, minority census tracts, and low-income census tracts. The actual market levels for these categories are determined retrospectively based on Home Mortgage Disclosure Act (HMDA) data [1].

In addition to these requirements, the FHFA has established measurement buffers to help determine whether an Enterprise must develop a housing plan if it fails to meet certain single-family housing goals. The size of these gaps determines whether an Enterprise must take action to improve its performance [1].

Regarding multifamily housing goals, the Enterprises must ensure that a specific percentage of units in multifamily properties with loans acquired by that Enterprise are affordable to tenants in the respective income categories. A separate subgoal measures the proportion of units in small multifamily properties that are affordable [1].

The affordable housing goals better enable the Enterprises to effectively advance their missions and support housing finance markets in a safe and sound manner [1]. It is crucial for the Enterprises to meet these goals as required by law and regulation [1].

In conclusion, the recent changes in leadership at Fannie Mae and Freddie Mac, coupled with the new affordable housing goals, mark a significant step forward in the ongoing efforts to strengthen the housing finance system and promote equitable housing access.

References:
[1] FHFA. (2023, February 22). FHFA finalizes 2025-2027 housing goals for Fannie Mae and Freddie Mac. Retrieved from https://www.fhfa.gov/news/news-release/fhfa-finalizes-2025-2027-housing-goals-for-fannie-mae-and-freddie-mac
[2] HousingWire. (2023, February 22). William Pulte to head boards of Fannie Mae, Freddie Mac as part of leadership shake-up. Retrieved from https://www.housingwire.com/articles/william-pulte-to-head-boards-of-fannie-mae-freddie-mac-as-part-of-leadership-shake-up/?utm_source=HousingWire+Daily+Newsletter&utm_medium=email&utm_campaign=02232023&utm_content=Trending+News