Fannie Mae And Freddie Mac Met 2003 Affordable Housing Goals
October 15, 2004
WASHINGTON – The Department of Housing and Urban Development today announced its assessment of the 2003 Affordable Housing Goal performance of Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac. HUD has concluded that both GSEs met their housing goals in 2003.
HUD’s official GSE housing goal performance results are shown below:
|Housing Goal||2003 Goal Target||HUD's Official
Fannie Mae Performance - 2003
|Low- and Moderate-Income||50%||51.2%||52.3%|
|Special Affordable Multifamily Subgoal||$2.11 billion||$8.79 billion||---|
|$2.85 billion||---||$12.23 billion|
"While the GSEs met the affordable housing goals in 2003, they must do more to genuinely lead the mortgage finance industry as Congress intended," said HUD Secretary Alphonso Jackson. "HUD is now finalizing new housing goals, which over the next four years, will push the GSEs to do what is expected of them—helping low-and moderate-income families at least at the same percentage levels as primary market lenders."
The Final Rule on GSE Affordable Housing Goals for 2005-2008 will be published in the Federal Register prior to taking effect in 2005.
Fannie Mae and Freddie Mac were created by Congress to provide a secondary market for targeted mortgages. Their affordable housing goals require the GSEs to target a percentage of their business toward low- and moderate-income families, very low-income families, low-income families in low-income areas, and residents of communities underserved by mortgage credit. Families are considered as having low or moderate incomes if they make no more than the median income in their local area.
Fannie Mae and Freddie Mac buy mortgages on homes and apartment buildings from banks, thrift institutions and other mortgage lenders, and then either package and sell them to investors as mortgage-backed securities or hold them in their own mortgage portfolios. When Fannie Mae and Freddie Mac buy mortgages from lenders, they provide lenders with cash needed to make new mortgage loans.
As mandated by FHEFSSA, HUD is required to ensure that Fannie Mae and Freddie Mac operate in compliance with their charter purposes. FHEFSSA requires that the Department carry out specific responsibilities that include setting annual housing goals for the GSEs, monitoring and enforcing the GSEs' performance in meeting these housing goals, monitoring compliance with fair lending laws, collecting loan level data from the GSEs on their mortgage purchases, creating and distributing a public use database of non-proprietary GSE purchase data, and approving new GSE programs. The Department also has general regulatory authority over each GSE and is required to make such rules and regulations as are necessary to ensure that the purposes of FHEFSSA and the GSEs' charters are accomplished.