Freddie Mac 2015 Annual Report Download - page 170

Management's Discussion and Analysis Regulation and Supervision
Freddie Mac 2015 Form 10-K 168
effective as of November 25, 2015, and replace it with the CEO compensation package that was in place
on January 1, 2015. For more information, see “Executive Compensation - Compensation Discussion and
Analysis.”
On December 18, 2015, the President signed into law the Consolidated Appropriations Act, 2016 which
includes a provision that prohibits the sale, transfer, liquidation, relinquishment, or divestiture by Treasury
of the government’s stake in Freddie Mac and Fannie Mae until 2018 without future legislation. The Act
also terminates the MHA Program as of December 31, 2016.
2014 Affordable Housing Goals and Housing Plan
In December 2015, FHFA determined that we achieved three of our five single-family affordable housing
goals and both of our multifamily goals for 2014. In 2014, we purchased approximately 108,900 and
25,200 loans that contributed to our single-family low-income and very low-income purchase money
goals. However, we missed these goals by approximately 9,600 loans and 4,400 loans, respectively.
Because we failed to meet these two goals for 2014, FHFA required us to submit a housing plan that
indicates how we plan to meet the missed goals in 2016 and 2017. We submitted our housing plan in
February 2016. Our performance compared to our goals, as determined by FHFA for 2014 and 2013, is
set forth below.
Goals for
2014
Market
Level for
2014 Results for 2014 Goals for 2013
Market
Level for
2013 Results for 2013
Single-family purchase money goals
(benchmark levels):
Low-income 23% 22.8%21.0% 23% 24.0%21.8%
Very low-income 7% 5.7% 4.9% 7% 6.3% 5.5%
Low-income areas 18% 22.1%20.1% 21% 22.1%20.0%
Low-income areas subgoal 11% 15.0%13.6% 11% 14.2%12.3%
Single-family refinance low-income goal
(benchmark level) 20% 25.0%26.4% 20% 24.3%24.1%
Multifamily low-income goal (in units) 200,000 N/A 273,434 215,000 N/A 254,628
Multifamily very low-income subgoal (in units) 40,000 N/A 48,689 50,000 N/A 56,752
Proposed Rule on Duty to Serve Underserved Markets
The GSE 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.
In December 2015, FHFA published a proposed rule regarding the duty of Freddie Mac and Fannie Mae
to serve these underserved markets. Under the proposed rule, Freddie Mac and Fannie Mae would each
be required to submit to FHFA an underserved markets plan covering a three-year period that describes
the activities and objectives it will undertake to meet its duty to serve. The proposed rule would provide
duty to serve credit for eligible activities that facilitate a secondary market for mortgages on residential
properties in the specified underserved markets. It would also establish a method for evaluating and