Fannie Mae 2014 Annual Report Download - page 41

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equal to or less than 100% of area median income) in designated disaster areas. For 2014, FHFA set the overall low-
income areas home purchase benchmark goal at 18%.
• Low-Income Areas Home Purchase Subgoal Benchmark: At least 11% of our acquisitions of single-family owner-
occupied purchase money mortgage loans must be affordable to families in low-income census tracts or to moderate-
income families in high-minority census tracts.
• Low-Income Families Refinancing Benchmark: At least 20% of our acquisitions of single-family owner-occupied
refinance mortgage loans must be affordable to low-income families.
Private-label mortgage-related securities, second liens and single-family government loans do not count towards our housing
goals. In addition, only permanent modifications of mortgages under the Administration’s Home Affordable Modification
Program (“HAMP®”) completed during the year count towards our housing goals; trial modifications are not counted.
Moreover, these modifications count only towards our single-family low-income families refinance goal, not any of the home
purchase goals. Refinancings under HARP also count toward our single-family low-income families refinancing goal.
If we do not meet these benchmarks, we may still meet our goals. Our single-family housing goals performance is measured
against benchmarks and against goals-qualifying originations in the primary mortgage market after the release of data
reported under the Home Mortgage Disclosure Act (“HMDA”). HMDA data are typically released each year in the fall. We
will be in compliance with the housing goals if we meet either the benchmarks or market share measures.
To meet FHFA’s housing goals, our multifamily mortgage acquisitions must finance a certain number of units affordable to
low-income families and a certain number of units affordable to very low-income families. The specific requirements for
each year are set forth in Table 5 below. There is no market-based alternative measurement for the multifamily goals.
Table 5: Multifamily Housing Goals for 2012 to 2014
Goals for
2012 2013 2014
(in units)
Affordable to low-income families. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285,000 265,000 250,000
Affordable to very low-income families. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000 70,000 60,000
In adopting the rule in 2010 establishing the structure of our housing goals, FHFA indicated “FHFA does not intend for
[Fannie Mae] to undertake uneconomic or high-risk activities in support of the [housing] goals. However, the fact that
[Fannie Mae is] in conservatorship should not be a justification for withdrawing support from these market segments.” If our
efforts to meet our goals prove to be insufficient, FHFA determines whether the goals were feasible. If FHFA finds that our
goals were feasible, we may become subject to a housing plan that could require us to take additional steps that could have an
adverse effect on our results of operations and financial condition. The housing plan must describe the actions we would take
to meet the goal in the next calendar year and be approved by FHFA. The potential penalties for failure to comply with
housing plan requirements include a cease-and-desist order and civil money penalties. As described in “Risk Factors,” actions
we may take to meet our housing goals may increase our credit losses and credit-related expense.
In January 2015, FHFA determined that we met all of our single-family and multifamily housing goals for 2013, except for
the single-family very low-income families home purchase goal. FHFA determined that our performance for this goal failed
to meet both the applicable benchmark and the overall market level, and that our achievement of this goal was feasible. FHFA
has notified us that it will not require us to submit a formal housing plan with respect to this goal.