Freddie Mac 2009 Annual Report Download - page 31

Table 2 — Affordable Housing Goals for 2008 and 2009
(1)
2009
(2)
2008
Housing Goals
Low- and moderate-income goal ................................................................ 43% 56%
Underserved areas goal ...................................................................... 32 39
Special affordable goal ...................................................................... 18 27
Multifamily special affordable volume target (in billions) . ............................................ $4.60 $3.92
2009
(2)
2008
Home Purchase
Subgoals
Low- and moderate-income subgoal .............................................................. 40% 47%
Underserved areas subgoal . . . ................................................................. 30 34
Special affordable subgoal . . . ................................................................. 14 18
(1) An individual mortgage may qualify for more than one of the goals or subgoals. Each of the goal and subgoal percentages will be determined
independently and cannot be aggregated to determine a percentage of total purchases that qualifies for these goals or subgoals.
(2) Pursuant to the Reform Act, FHFA may make appropriate adjustments to the 2009 goals consistent with market conditions.
The 2009 rule and related FHFA guidance permits loans we own or guarantee that are modified in accordance with the
MHA Program to be treated as mortgage purchases and count toward the housing goals. In addition, the rule excludes
“super-conforming” mortgages from the 2009 housing goals.
Effective beginning calendar year 2010, the Reform Act requires that FHFA establish, by regulation, four single-family
housing goals, one multifamily special affordable housing goal and requirements relating to multifamily housing for very
low-income families. In addition, the Reform Act establishes a duty for Freddie Mac and Fannie Mae to serve three
underserved markets (manufactured housing, affordable housing preservation and rural areas) by developing loan products
and flexible underwriting guidelines to facilitate a secondary market for mortgages for very low-, low- and moderate-income
families in those markets. Effective for 2010, FHFA is required to establish a manner for annually: (1) evaluating whether
and to what extent Freddie Mac and Fannie Mae have complied with the duty to serve underserved markets; and (2) rating
the extent of compliance.
In a letter to the Chairmen and Ranking Members of the Congressional Banking and Financial Services Committees
dated February 2, 2010, the Acting Director of FHFA stated that FHFA will in the near future publish for public comment a
proposed rule setting the housing goals for 2010 and 2011 that will establish the framework for ensuring that our
participation in the mortgage market includes support for the affordable housing segments of the market, consistent with our
mission and with safety and soundness. The Acting Director also stated that FHFA does not intend for us to undertake
uneconomic or high-risk activities in support of the housing goals nor does it intend for the state of conservatorship to be a
justification for withdrawing our support from these market segments. The letter also stated that maintaining sound
underwriting discipline going forward is important for conserving assets and supporting our mission in a sustainable manner.
On February 17, 2010, FHFA announced that it had sent to the Federal Register a proposed rule for public comment
that would establish new affordable housing goals for 2010 and 2011. For 2010 and 2011, FHFA is proposing levels for three
single-family home purchase goals: low-income families, very low-income families, and families in low-income/high
minority/disaster areas. The proposed rule also contains goals for single-family refinance mortgages for low-income families.
FHFA is also proposing separate multifamily goals for low-income families and for very low-income families. The proposed
goals and the proposed rules governing our performance under such goals differ substantially from those in effect prior to
2010.
Our performance with respect to the affordable housing goals for 2007 and 2008 is summarized in the table below.
FHFA determined that we met the goals for 2007, except for the low- and moderate-income home purchase subgoal and the
special affordable home purchase subgoal, which were determined to be infeasible. In March 2009, we reported to FHFA that
we achieved the 2008 multifamily special affordable dollar volume subgoal, but did not meet the other 2008 goals. We
believe that achievement of these goals was infeasible in 2008 under the terms of the GSE Act, and accordingly submitted an
infeasibility analysis to FHFA. In March 2009, FHFA notified us that it had determined that achievement of these goals was
infeasible, with the exception of the underserved areas goal. Based on our financial condition in 2008, FHFA concluded that
achievement by us of the underserved areas goal was feasible, but challenging. Accordingly, FHFA decided not to require us
to submit a housing plan.
We expect to report our performance with respect to the 2009 affordable housing goals in March 2010. At this time,
based on preliminary information, we believe we did not achieve certain of the goals for 2009. We believe, however, that
achievement of such goals was infeasible under the terms of the GSE Act, due to market and economic conditions and our
financial condition. Accordingly, we have submitted an infeasibility analysis to FHFA, which is reviewing our submission.
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