DUTY TO SERVE FINAL RULE DECEMBER 19, 2016
AGENDA Overview of the Final Rule Public Listening Sessions Planning Timeline Questions and Answers D U T Y T O S E R V E 2
WHAT IS THE DUTY TO SERVE? The Housing and Economic Recovery Act of 2008 established for Fannie Mae and Freddie Mac a duty to serve very low ‐ , low ‐ , and moderate ‐ income families in three specified underserved markets: Manufactured Affordable Housing Rural Housing Housing Preservation Each year, FHFA is required to evaluate and rate each Enterprise’s compliance with the Duty to Serve requirements in each underserved market and report the results to Congress. D U T Y T O S E R V E 3
UNDERSERVED MARKETS PLANS Underserved Markets Plan Manufactured Affordable Housing Rural Housing Housing Preservation Regulatory and Additional Statutory, Regulatory, and Regulatory and Additional Activities Additional Activities Activities D U T Y T O S E R V E 4
UNDERSERVED MARKETS PLAN REQUIREMENTS Activities Objectives Evaluation Areas Extra Credit 3 categories: Specific, Objective meets Opportunity to measurable tasks one of 4 evaluation earn extra credit • Statutory for each activity areas: for accomplishing • Regulatory certain challenging • Outreach • Additional or impactful • Loan Products activities or • Loan Purchase objectives • Investments D U T Y T O S E R V E 5
MANUFACTURED HOUSING MARKET Statutory Activities Regulatory Activities Additional Activities None Manufactured Homes: Eligible Additional Activities proposed by the Enterprises Support manufactured homes • in their Plans and consistent titled as personal property (chattel) with the HERA household Support manufactured homes • income ‐ eligibility categories titled as real property Manufactured Housing Communities: Small (< 150 pads) • Support manufactured housing • communities owned by government entities or instrumentalities, nonprofits, or residents Manufactured housing • communities with specified minimum tenant pad lease protections Note: Changes in activities from the proposed rule are shown in red. D U T Y T O S E R V E 6
AFFORDABLE HOUSING PRESERVATION MARKET Statutory Activities Regulatory Activities Additional Activities Section 8 programs Support for : Eligible Additional Activities • proposed by the Enterprises in Section 236 (rental and Small multifamily rental property • • their Plans and consistent with cooperative housing financing activity (5 ‐ 50 units, the HERA household income ‐ program) lender size less than $10B) eligibility categories Section 221(d)(4) (moderate ‐ • Financing of multifamily energy or • income and displaced water efficiency improvements families) Financing of single ‐ family energy or • Section 202 (elderly) • water efficiency improvements Section 811 (persons with • Affordable homeownership • disabilities) preservation (shared equity) financing Permanent supportive • housing projects (Homeless HUD’s Choice Neighborhoods • Assistance) Initiative (CNI) Section 515 (rural rental) • HUD’s Rental Assistance • Demonstration (RAD) Program Low ‐ Income Housing Tax • Credits Financing of purchase or • rehabilitation of certain distressed Comparable state or local • properties affordable housing programs Note: Changes in activities from the proposed rule are shown in red. D U T Y T O S E R V E 7
“RURAL AREA” DEFINITION Proposed Rule Definition Final Rule Definition A census tract outside of a metropolitan A census tract outside of a metropolitan statistical area (MSA) as designated by statistical area (MSA) as designated by the the Office of Management and Budget Office of Management and Budget OR OR A census tract that is in an MSA but A census tract that is in an MSA but outside of the MSA’s Urbanized Areas as outside of the MSA’s Urbanized Areas designated by USDA’s RUCA Code #1, and and Urban Clusters, as designated by the outside of tracts that have a housing USDA’s RUCA Codes #1, #4 and #7. density of over 64 housing units per square mile for USDA’s RUCA Code #2. D U T Y T O S E R V E 8
RURAL HOUSING MARKET Statutory Activities Regulatory Activities Additional Activities None Support housing in high ‐ needs rural Eligible Additional Activities • regions: proposed by the Enterprises in their Plans and consistent with Middle Appalachia • the HERA household income ‐ The Lower Mississippi Delta • eligibility categories Colonias along the U.S.–Mexico • border Rural tracts in persistent poverty • counties not in above three regions Support housing for high ‐ needs rural • populations: Native Americans in Indian • Areas Migrant and seasonal • Agricultural workers Support financing by small financial • institutions of rural housing Support small multifamily rental • property (5 ‐ 50 units) activity in rural areas Note: Changes in activities from the proposed rule are shown in red. D U T Y T O S E R V E 9
EVALUATIONS AND RATINGS EVALUATION OVERVIEW Step 1 Step 2 Step 3 Quantitative Qualitative Extra Credit Final Rating Assessment Assessment Assessment Exceeds Assessment of extra Evaluation of level Evaluation of credit ‐ eligible of objectives accomplishments High Satisfactory activities, which accomplished based on skillful Low Satisfactory may raise rating implementation Minimally Passing and impact Fails D U T Y T O S E R V E 10
PLANNING TIMELINE 2017 2018 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Public input period on Proposed Evaluation Guidance Enterprises submit draft Plans to FHFA Public input period on draft Evaluation Plans Guidance issued Enterprises revise draft Plans as appropriate FHFA Non ‐ Objections to Plans issued Plans effective Dates subject to change. The blue boxes above indicate the months in which certain activities are expected to occur. They are not representative of the exact start and end date for the activity within a month or within months.
PUBLIC LISTENING SESSIONS January 25, 2017 Federal Reserve Bank of Chicago February 1, 2017 Federal Reserve Bank of San Francisco February 8, 2017 FHFA Headquarters, Washington, DC February 9, 2017 Webinar D U T Y T O S E R V E 12
DUTY TO SERVE WEBPAGE www.fhfa.gov/dts D U T Y T O S E R V E 13
FOR MORE INFORMATION DutytoServeStakeholders@fhfa.gov D U T Y T O S E R V E 14
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