Fannie Mae 2007 Annual Report Download - page 37

Investment Review
HUD periodically conducts reviews of our activities to ensure compliance with the Charter Act and other
regulatory requirements. In June 2006, HUD announced that it would conduct a review of our investments and
holdings, including certain equity and debt investments classified in our consolidated financial statements as
“other assets/other liabilities,” to determine whether our investment activities are consistent with our charter
authority. We are fully cooperating with this review. If HUD determines that these investment activities are not
permissible under the Charter Act, we could be prevented from continuing some of our current business
activities and may be required to modify our investment approach.
Annual Housing Goals and Subgoals
For each calendar year, we are subject to housing goals and subgoals set by HUD. The goals, which are set as
a percentage of the total number of dwelling units underlying our total mortgage purchases, are intended to
expand housing opportunities (1) for low- and moderate-income families, (2) in HUD-defined underserved
areas, including central cities and rural areas, and (3) for low-income families in low-income areas and for
very low-income families, which is referred to as “special affordable housing.” In addition, HUD has
established three home purchase subgoals that are expressed as percentages of the total number of mortgages
we purchase that finance the purchase of single-family, owner-occupied properties located in metropolitan
areas, and a subgoal for multifamily special affordable housing that is expressed as a dollar amount. We report
our progress toward achieving our housing goals to HUD on a quarterly basis, and we are required to submit a
report to HUD and Congress on our performance in meeting our housing goals on an annual basis.
The following table compares our performance against the housing goals and subgoals for 2007, 2006 and 2005.
The 2005 and 2006 performance results are final results that have been validated by HUD. The 2007 performance
results are preliminary results that we have not finalized and that also have not yet been validated by HUD.
Housing Goals and Subgoals Performance
Result
(1)
Goal Result
(1)
Goal Result
(1)
Goal
2007 2006 2005
Housing goals:
(2)
Low- and moderate-income housing . . . . . . . . . . . . . . . . . 55.34% 55.0% 56.93% 53.0% 55.06% 52.0%
Underserved areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.41 38.0 43.59 38.0 41.43 37.0
Special affordable housing . . . . . . . . . . . . . . . . . . . . . . . . 26.47 25.0 27.81 23.0 26.28 22.0
Housing subgoals:
Home purchase subgoals:
(3)
Low- and moderate-income housing. . . . . . . . . . . . . . . . 42.16 47.0% 46.93% 46.0% 44.59% 45.0%
Underserved areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.46 33.0 34.49 33.0 32.56 32.0
Special affordable housing . . . . . . . . . . . . . . . . . . . . . . 15.46 18.0 17.95 17.0 17.03 17.0
Multifamily special affordable housing subgoal
($ in billions)
(4)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19.85 $5.49 $13.31 $5.49 $10.39 $5.49
(1)
Results presented for 2007 are preliminary and reflect our best estimates as of the date of this report. These results
may differ from the results we report in our Annual Housing Activities Report for 2007. In addition, HUD has not yet
determined our results for 2007. The source of our 2006 and 2005 results is HUD’s analysis of data we submitted to
HUD. Some results differ from the results we reported in our Annual Housing Activities Reports for 2006 and 2005.
(2)
Goals are expressed as a percentage of the total number of dwelling units financed by eligible mortgage loan
purchases during the period.
(3)
Home purchase subgoals measure our performance by the number of loans (not dwelling units) providing purchase
money for owner-occupied single-family housing in metropolitan areas.
(4)
The multifamily subgoal is measured by loan amount and expressed as a dollar amount.
As shown by the table above, in 2005, we met each of our three housing goals and three of the four subgoals,
but fell slightly short of the “low- and moderate-income housing” home purchase subgoal. We met all of our
housing goals and subgoals in 2006.
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