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Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules
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This proposed rule would establish benchmark levels for 20222024.
Single-family goals. The single-family goals defined under the Safety and Soundness Act include separate categories for home purchase mortgages for low-income families, very lowincome families, and families that reside in low-income areas.5 The Safety and Soundness Act defines low-income area 6 to include: 1 Families in lowincome census tracts, defined as census tracts with median income less than or equal to 80 percent of area median income AMI; 7 2 families with incomes less than or equal to AMI who reside in minority census tracts defined as census tracts with a minority population of at least 30 percent and a tract median income of less than 100
percent of AMI; 8 and 3 families with incomes less than or equal to 100
percent of AMI who reside in designated disaster areas.9 The Enterprise housing goals regulation also includes a subgoal, within the lowincome areas goal, that is limited to families in low-income census tracts and moderate-income families in minority census tracts.10 FHFA is proposing a change to the structure of the low-income areas subgoal, as further discussed in Section III.A. below.
Performance on the single-family home purchase goals is measured as the percentage of the total home purchase mortgages purchased by an Enterprise each year that qualify for each goal or subgoal. There is also a separate goal for refinancing mortgages for low-income families, and performance on the refinancing goal is determined in a similar way.
Under the Safety and Soundness Act, the single-family housing goals are limited to mortgages on owner-occupied housing with one to four units total. The single-family goals cover conventional, conforming mortgages, defined as mortgages that are not insured or guaranteed by the Federal Housing Administration or another government agency and with principal balances that market conditions created by the COVID19
pandemic. 85 FR at 82881 Due to the severe nature of the COVID19 pandemic and associated economic uncertainty, FHFA is establishing benchmark levels for the Enterprise single-family and multifamily housing goals for calendar year 2021 only.
5 12 U.S.C. 4562a1.
6 12 U.S.C. 450228.
7 12 U.S.C. 450228; 12 CFR 1282.1 par. i of definition of families in low-income areas.
8 12 U.S.C. 450229; 12 CFR 1281.1 par. ii of definition of families in low-income areas and definition of minority census tract.
9 12 U.S.C. 450228; 12 CFR 1281.1 definition of designated disaster area and par. iii of definition of families in low-income areas.
10 12 CFR 1282.12f.

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do not exceed the conforming loan limits for Enterprise mortgages.
Two-part evaluation approach. The performance of the Enterprises on the housing goals is evaluated using a twopart approach, comparing the goalqualifying share of the Enterprises mortgage purchases to two separate measures: A benchmark level and a market level. In order to meet a singlefamily housing goal, the percentage of mortgage purchases by an Enterprise that meet each goal must equal or exceed either the benchmark level or the market level for that year. The benchmark level is set prospectively by rulemaking based on various factors set forth in the Safety and Soundness Act.11
The market level is determined retrospectively for each year, based on the actual goal-qualifying share of the overall market as measured by the Home Mortgage Disclosure Act HMDA data for that year. The overall market that FHFA uses for setting both the prospective benchmark level and the retrospective market level consists of all single-family owner-occupied conventional conforming mortgages that would be eligible for purchase by either Enterprise. It includes loans purchased by the Enterprises as well as comparable loans held in a lenders portfolio. It also includes any loans that are part of a private label security PLS, although very few such securities have been issued for conventional conforming mortgages since 2008.
While both the benchmark level and the retrospective market level are designed to measure the current years mortgage originations, the performance of the Enterprises on the housing goals includes all Enterprise purchases in that year, regardless of the year in which the loan was originated. This includes providing housing goals credit when the Enterprises acquire qualified seasoned loans. Seasoned loans are loans that were originated in prior years and acquired by the Enterprise in the current year.
Multifamily goals. The multifamily goals defined under the Safety and Soundness Act include categories for mortgages on multifamily properties properties with five or more units with rental units affordable to low-income families and mortgages on multifamily properties with rental units affordable to very low-income families. The Enterprise housing goals regulation also includes a small multifamily lowincome subgoal for properties with 550
units. The multifamily housing goals include all Enterprise multifamily mortgage purchases, regardless of the 11 See
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12 U.S.C. 4562e.

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purpose of the loan. The multifamily goals evaluate the performance of the Enterprises based on numeric targets, not percentages, for the number of affordable units in properties backed by mortgages purchased by an Enterprise.
The Enterprise housing goals regulation does not include a retrospective market level measure for the multifamily goals, due in part to a lack of comprehensive data about the multifamily market. As a result, FHFA currently measures Enterprise multifamily goals performance against the benchmark levels only.
The Safety and Soundness Act requires that affordability for rental units under the multifamily goals be determined based on rents that do not exceed 30 percent of the maximum income level of such income category, with appropriate adjustments for unit size as measured by the number of bedrooms. 12 The Enterprise housing goals regulation considers the net rent paid by the renter and, therefore, nets out any subsidy payments that the renter may receive, including housing assistance payments.
B. Adjusting the Housing Goals If, after publication of the final rule establishing the housing goals for 2022
2024, FHFA determines that any of the single-family or multifamily housing goals should be adjusted in light of market conditions, to ensure the safety and soundness of the Enterprises, or for any other reason, FHFA will take any steps that are necessary and appropriate to adjust that goal such as reducing the benchmark level through the processes in the existing regulation. FHFA may take other actions consistent with the Safety and Soundness Act and the Enterprise housing goals regulation based on new information or developments that occur after publication of the final rule.
For example, under the Safety and Soundness Act and the Enterprise housing goals regulation, FHFA may reduce the benchmark levels in response to an Enterprise petition for reduction for any of the single-family or multifamily housing goals in a particular year based on a determination by FHFA that: 1 Market and economic conditions or the financial condition of the Enterprise require a reduction; or 2
12 See 12 U.S.C. 4563c. This affordability definition is sometimes referred to as the Brooke Amendment, which states that to be affordable at the 80 percent of AMI level, the rents must not exceed 30 percent of the renters income which must not exceed 80 percent of AMI. See https
www.huduser.gov/portal/pdredge/pdr_edge_featd_
article_092214.html for a description of the Brooke Amendment and background on the notion of affordability embedded in the housing goals.

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