Freddie Mac 2014 Annual Report Download - page 30

25 Freddie Mac
We expect to report our performance with respect to the 2014 affordable housing goals in March 2015. At this time, based
on preliminary information, we believe we met three of our single-family goals and both multifamily goals for 2014, but
believe we failed to meet the FHFA benchmark level for the other single-family goals. In such cases, FHFA regulations allow
us to achieve a goal if our qualifying share matches that of the market, as measured by the Home Mortgage Disclosure Act.
Because the Home Mortgage Disclosure Act data for 2014 will not be released until September 2015, FHFA will not be able to
make a final determination on our performance until that time. If we fail to meet both the FHFA benchmark level and the
market level, we may enter into discussions with FHFA concerning whether these goals were infeasible under the terms of the
GSE Act, due to market and economic conditions and our financial condition.
Affordable Housing Goals for 2015 to 2017
In August 2014, FHFA issued a proposed rule that would establish housing goals for Freddie Mac and Fannie Mae for
2015 through 2017. FHFA requested comment on all aspects of the proposed rule. Under FHFA’s proposal: (a) the benchmark
levels for our single-family goals could increase; (b) the number of units for both of our multifamily goals would increase; and
(c) FHFA would establish a new subgoal related to small multifamily properties affordable to low-income families. We cannot
predict the content of any final rule concerning affordable housing goals, or the impact any such final rule would have on our
business or operations.
Affordable Housing Goals and Results for 2013 and 2012
FHFA has determined that we achieved two of our five single-family affordable housing goals and both multifamily goals
in 2013, and did not achieve the other three single-family goals. We achieved all of our housing goals for 2012. Our
performance on the goals, as determined by FHFA, is set forth below.
Table 4 — Affordable Housing Goals and Results for 2013 and 2012
Goals for
2013 Market Level for 2013 Results for 2013 Goals for 2012 Market Level for 2012 Results for 2012
Single-family purchase money goals
(benchmark levels):
Low-income 23% 24.0% 21.8% 23% 26.6% 24.4%
Very low-income 7% 6.3% 5.5% 7% 7.7% 7.1%
Low-income areas(1) 21% 22.1% 20.0% 20% 20.5% 20.6%
Low-income areas subgoal 11% 14.2% 12.3% 11% 13.6% 11.4%
Single-family refinance low-income goal
(benchmark level) 20% 24.3% 24.1% 20% 22.3% 22.4%
Multifamily low-income goal (in units) 215,000 N/A 254,628 225,000 N/A 298,529
Multifamily low-income subgoal (in units) 50,000 N/A 56,752 59,000 N/A 60,084
(1) FHFA annually sets the benchmark level for the low-income areas goal based on the benchmark level for the low-income areas subgoal, plus an
adjustment factor reflecting the additional incremental share of mortgages for low- and moderate-income families in designated disaster areas in the
three most recent years for which such data are available. For 2013 and 2012, FHFA set the benchmark level at 21% and 20%, respectively.
FHFA did not require us to submit a housing plan for the goals we did not achieve in 2013.
Affordable Housing Allocations
The GSE Act requires us to set aside in each fiscal year an amount equal to 4.2 basis points of each dollar of the UPB of
total new business purchases, and allocate or transfer such amount to: (a) HUD to fund a Housing Trust Fund established and
managed by HUD; and (b) a Capital Magnet Fund established and managed by Treasury. FHFA has the authority to suspend
our allocation upon finding that the payment would contribute to our financial instability, cause us to be classified as
undercapitalized or prevent us from successfully completing a capital restoration plan. In November 2008, FHFA suspended the
requirement to set aside or allocate funds for the Housing Trust Fund and the Capital Magnet Fund. In December 2014, FHFA
terminated the suspension and directed us to begin making contributions to the funds, in accordance with the following terms
and conditions:
• The amount we will set aside each fiscal year, commencing with fiscal year 2015, will be based on our total new
business purchases during such fiscal year; and
• Within 60 days after the end of each fiscal year commencing with fiscal year 2015, we will allocate or otherwise
transfer the amount set aside. However, if we have made a draw under the Purchase Agreement during that fiscal year
or if such allocation or transfer will cause us to have to make a draw, then we will not make an allocation or transfer
and the amount set aside for that fiscal year will be reversed.
We are prohibited from passing through the costs of the allocations (e.g., through increased charges or fees) to the
originators of the mortgages that we purchase.
Prudential Management and Operations Standards
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