[Federal Register Volume 77, Number 219 (Tuesday, November 13, 2012)]
[Rules and Regulations]
[Pages 67535-67557]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27121]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 /
Rules and Regulations
[[Page 67535]]
FEDERAL HOUSING FINANCE AGENCY
12 CFR Part 1282
RIN 2590-AA49
2012-2014 Enterprise Housing Goals
AGENCY: Federal Housing Finance Agency.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Housing Enterprises Financial Safety and Soundness
Act of 1992 (Safety and Soundness Act) requires the Federal Housing
Finance Agency (FHFA) to establish annual housing goals for mortgages
purchased by the Federal National Mortgage Association (Fannie Mae) and
the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively,
the Enterprises). FHFA previously established housing goals for the
Enterprises through 2011. This final rule establishes new levels for
the housing goals for 2012 through 2014, consistent with the
requirements of the Safety and Soundness Act.
DATES: This rule is effective December 13, 2012.
FOR FURTHER INFORMATION CONTACT: Paul Manchester, Principal Economist,
(202) 649-3115; Ian Keith, Senior Program Analyst, (202) 649-3114;
Office of Housing and Regulatory Policy; Jay Schultz, Senior Economist,
(202) 649-3117, Office of National Mortgage Database; Kevin Sheehan,
Assistant General Counsel, (202) 649-3086, Office of General Counsel.
These are not toll-free numbers. The mailing address for each contact
is: Office of General Counsel, Federal Housing Finance Agency, Eighth
Floor, 400 Seventh Street SW., Washington, DC 20024. The telephone
number for the Telecommunications Device for the Hearing Impaired is
(800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
A. Statutory and Regulatory Background
The Safety and Soundness Act, as amended by the Housing and
Economic Recovery Act of 2008 (HERA), provides for the establishment,
monitoring and enforcement of housing goals for Fannie Mae and Freddie
Mac.\1\ FHFA previously established housing goals for the Enterprises
for 2010 and 2011 through a final rule published on September 14,
2010.\2\
---------------------------------------------------------------------------
\1\ See 12 U.S.C. 4561-4566.
\2\ See 75 FR 55892 (September 14, 2010).
---------------------------------------------------------------------------
Section 1332(a) of the Safety and Soundness Act requires FHFA to
establish three single-family owner-occupied purchase money mortgage
goals, one subgoal, and one single-family refinancing mortgage goal.
The single-family housing goals target:
Home purchase mortgages for
[cir] Low-income families,
[cir] Families that reside in low-income areas (goal and subgoal),
and
[cir] Very low-income families; and
Refinancing mortgages for low-income families.\3\
---------------------------------------------------------------------------
\3\ See 12 CFR 1282.12.
---------------------------------------------------------------------------
Section 1333(a) of the Safety and Soundness Act requires FHFA to
establish one multifamily special affordable housing goal, as well as
providing for a multifamily special affordable housing subgoal. These
target multifamily housing affordable to:
Low-income families, and
Very low-income families.\4\
---------------------------------------------------------------------------
\4\ See 12 CFR 1282.13.
---------------------------------------------------------------------------
B. Conservatorship
On September 6, 2008, the Director of FHFA appointed FHFA as
conservator of the Enterprises to maintain the Enterprises in a safe
and sound financial condition and to help assure performance of their
public mission. The Enterprises remain under conservatorship at this
time.
Although the Enterprises' substantial market presence has been key
to retaining market stability, neither company is capable of serving
the mortgage market today without the ongoing financial support
provided by the U.S. Department of the Treasury (Treasury) under their
respective Senior Preferred Stock Purchase Agreements (Agreements).
FHFA has projected a range of substantial cumulative draws in Treasury
support under the Agreements through 2014. While reliance on the
Treasury Department will continue until legislation produces a final
resolution to the Enterprises' future, FHFA is monitoring the
activities of the Enterprises to: (a) Minimize losses on the mortgages
already on their books; (b) ensure profitability in the new book of
business without deterring market participation or hindering market
recovery; and (c) limit their risk exposure by avoiding new products
and lines of business.
While the Enterprises are in conservatorship, all Enterprise
activities, including those in support of affordable housing, must be
consistent with the requirements of conservatorship under the Safety
and Soundness Act, as amended by HERA. If FHFA determines that the
Enterprise housing goals cannot be achieved consistent with the goals
and requirements of conservatorship or in light of market conditions,
FHFA, as conservator for each Enterprise, may take additional action,
including suspension of the Enterprise housing goals until they can be
achieved and in a manner consistent with the conservatorships. In the
meantime, FHFA is continuing with the existing structure of the housing
goals, including the market-based approach that was adopted for 2010
and 2011, with new benchmark levels in place through 2014.
C. Prospective and Market-Based Approach
The current housing goals regulation sets forth single-family
housing goals for 2010-2011 that include: (1) An assessment of
Enterprise performance, as compared to the actual share of the market
that meets the criteria for each goal; and (2) a benchmark level to
measure Enterprise performance. For the single-family housing goals, an
Enterprise has met a goal if it achieves the benchmark level for that
goal, even if the actual market size for the year is higher than the
benchmark level. An Enterprise has failed to meet a goal if its annual
performance falls below both the benchmark level and the actual share
of the market that meets the criteria for a particular goal for that
year. FHFA determined that this approach is appropriate in light of
recent market turmoil, especially while the Enterprises are operating
in conservatorship, and in light of the difficulty of making
[[Page 67536]]
projections accurately even in more stable economic environments. For
those reasons too, and because the correspondence between available
market data and the Enterprises' actual goals-qualifying activity is
not exact, FHFA reserves some flexibility in determining whether an
Enterprise has substantially complied with one or more goals.
II. Proposed Rule
On June 11, 2012, FHFA published in the Federal Register a proposed
rule to establish new levels for the Enterprise housing goals for 2012
through 2014. The 45-day comment period closed July 26, 2012.\5\
---------------------------------------------------------------------------
\5\ See 77 FR 34263 (June 11, 2012).
---------------------------------------------------------------------------
A. Summary of Comments
FHFA received a total of 23 comments on the proposed rule; all are
available on FHFA's Web site, http://www.fhfa.gov. Comments were
received from six trade associations, ten housing or other advocacy
organizations, five individuals, and both Enterprises. A number of the
comments addressed issues specific to this rulemaking, including
comments on the proposed benchmark levels for the single-family housing
goals, comments on the proposed levels for the multifamily housing
goals, and comments on the treatment of certain multifamily properties
under the housing goals. These comments are discussed in more detail in
the sections below pertaining to each of these issues.
FHFA also received comments on issues that were outside the scope
of this rulemaking. For example, FHFA received comments recommending,
among other things: (1) That chattel (personal property) mortgages on
manufactured housing should count toward the housing goals; (2) that
FHFA should award goals credit to the Enterprises for ``prioritizing
their relationship'' with housing finance agencies; (3) that FHFA
should establish a subgoal to the low-income refinance goal for low-
income loan modifications; and (4) that FHFA should take into account
forthcoming regulations with regard to ``qualified mortgages'' and
``qualified residential mortgages.'' In addition, FHFA received
comments addressing issues not related to the Enterprise housing goals.
FHFA has reviewed all comments received in response to the proposed
rule, but comments that raised issues beyond the scope of the proposed
rule are not addressed in this final rule.
B. Use of Term ``Minority''
FHFA received one comment letter from an advocacy organization
questioning the use of the term ``minority'' in the proposed rule. FHFA
has determined that the consideration of race in establishing the
housing goals is appropriate and necessary to address specific
provisions in the Safety and Soundness Act.
Specifically, section 1332(a) of the Safety and Soundness Act
requires the Director to establish a single-family housing goal for
families that reside in low-income areas, which are defined in section
1303 of the Safety and Soundness Act to include low- and moderate-
income families in census tracts where at least 30 percent of the
population consists of minorities. In order for FHFA to establish the
housing goal for families that reside in low-income areas, it is
necessary for FHFA to consider the distribution of minorities among
different census tracts.
III. Summary of Final Rule
The final rule establishes new benchmark levels for the single-
family housing goals for 2012, 2013 and 2014.\6\ The final rule lowers
the benchmark levels for these goals from those in effect for 2010 and
2011, but raises the low-income home purchase goal level above the
level in the proposed rule, and lowers the low-income refinance goal
level from that in the proposed rule. The final rule also establishes
new levels for the multifamily housing goals for 2012-2014. Both
Enterprises exceeded the multifamily housing goal levels for 2011, and
the final rule increases those goal levels above the 2010-2011 levels.
However, in light of uncertainty about the multifamily market, and the
Enterprises' role in that market, the goal levels for 2013 are set
below the 2012 level, and are further decreased for 2014. The final
rule does not make any other changes to the housing goals that have
been in effect since 2010.
---------------------------------------------------------------------------
\6\ The low-income areas goal in a given year includes
Federally-declared disaster areas from the previous three years,
thus this goal will not be determined for 2013 until January 2013
and for 2014 until January 2014.
---------------------------------------------------------------------------
Specifically, the proposed and final goals are:
------------------------------------------------------------------------
2012 2013 2014
------------------------------------------------------------------------
Low-income home purchase goal:
Proposed rule................ ........... 20% ...........
Final rule................... ........... 23% ...........
Very-low income home purchase
goal:
Proposed rule................ ........... 7% ...........
Final rule................... ........... 7% ...........
Low-income areas home purchase
subgoal:
Proposed rule................ ........... 11% ...........
Final rule................... ........... 11% ...........
Low-income areas home purchase
goal:
Proposed rule................ 20% NA NA
Final rule................... 20% NA NA
Low-income refinance goal:
Proposed rule................ ........... 21% ...........
Final rule................... ........... 20% ...........
------------------------------------------------------------------------
Multifamily special affordable goals (low-income units):
[[Page 67537]]
------------------------------------------------------------------------
2012 2013 2014
------------------------------------------------------------------------
Fannie Mae:
Proposed rule................ 251,000 245,000 223,000
Final rule................... 285,000 265,000 250,000
Freddie Mac:
Proposed rule................ 191,000 203,000 181,000
Final rule................... 225,000 215,000 200,000
------------------------------------------------------------------------
Multifamily special affordable subgoals (very low-income units):
------------------------------------------------------------------------
2012 2013 2014
------------------------------------------------------------------------
Fannie Mae:
Proposed rule................ 60,000 59,000 53,000
Final rule................... 80,000 70,000 60,000
Freddie Mac:
Proposed rule................ 32,000 31,000 27,000
Final rule................... 59,000 50,000 40,000
------------------------------------------------------------------------
IV. Single-Family Housing Goals
A. Analysis of Factors for Single-Family Housing Goals
Section 1332(e)(2) of the Safety and Soundness Act requires FHFA to
consider the following seven factors in setting the single-family
housing goals:
(1) National housing needs;
(2) Economic, housing, and demographic conditions, including
expected market developments;
(3) The performance and effort of the Enterprises toward achieving
the housing goals under this section in previous years;
(4) The ability of the Enterprise to lead the industry in making
mortgage credit available;
(5) Such other reliable mortgage data as may be available;
(6) The size of the purchase money conventional mortgage market, or
refinance conventional mortgage market, as applicable, serving each of
the types of families described, relative to the size of the overall
purchase money mortgage market or the overall refinance mortgage
market, respectively; and
(7) The need to maintain the sound financial condition of the
Enterprises.\7\
---------------------------------------------------------------------------
\7\ 12 U.S.C. 4562(e)(2).
---------------------------------------------------------------------------
FHFA's consideration of the size of the market for each housing
goal includes consideration of the percentage of goal-qualifying
mortgages under each housing goal, as calculated based on Home Mortgage
Disclosure Act (HMDA) data for the three most recent years for which
data is available.\8\ FHFA's analysis of each of the factors, which has
been updated since the proposed rulemaking, is set forth below.
---------------------------------------------------------------------------
\8\ See 12 U.S.C. 4562(e)(2)(A).
---------------------------------------------------------------------------
1. National Housing Needs
The recent single-family housing market has been characterized by
falling homeownership rates, high vacancy rates, weak sales, lower home
prices, high foreclosure rates, and stricter underwriting. These trends
are likely to continue in the near term. In many instances, they have
had differing impacts for homeowners and home seekers of different
ethnicities. Despite demand spurred by the ``First Time'' and ``Move Up
Home Buyer'' tax credits in 2009 and 2010, the seasonally adjusted
overall U.S. homeownership rate was 65.6 percent in the second quarter
of 2012, after peaking at 69.1 percent in 2004. The homeownership rate
for non-Hispanic whites declined from a peak of 76 percent in 2004 to
73.5 percent in the second quarter of 2012. For black households, the
decline was more pronounced, going from a peak of 49.1 percent in 2004
to 43.8 percent in the second quarter of 2012. The homeownership rate
for Hispanic households also had a noticeable decline, going from a
peak of 49.7 percent in 2006 and 2007 to 46.5 percent in the second
quarter of 2012.
The homeowner vacancy rate--the proportion of housing inventory for
homeowners that is vacant and for sale--dropped slightly to 2.1 percent
in the second quarter of 2012, from a record high of 2.9 percent in
2008. But the vacancy rate may not fully capture the inventory of
distressed and at-risk homes that have not yet completed the
foreclosure process, but will add to the housing supply.\9\
---------------------------------------------------------------------------
\9\ See generally, Daniel Indiviglio, ``The `Shadow' Foreclosure
Inventory,'' The Atlantic (Sept. 23, 2009), available at http://www.theatlantic.com/business/archive/2009/09/the-shadow-foreclosure-inventory/27093/.
---------------------------------------------------------------------------
First-time homebuyers have experienced lower-priced housing.
According to the 2011 National Association of Realtors (NAR) survey of
homebuyers and sellers, the median age for first-time homebuyers was 31
years, and the median income was $62,400. The typical first-time
homebuyer purchased a $155,000 home, up from $152,000 in the 2010
survey. Fifty-four percent of entry-level buyers financed their
purchase with a Federal Housing Administration (FHA) loan, and 6
percent used the Veterans Administration (VA) loan program.
For 2011, NAR reported that existing home sales were up by 1.7
percent from 2010, and sales through August 2012 are running an
additional 7.4 percent above the 2011 level. New home sales for 2011,
as reported by the Census Bureau, were down by 5.3 percent from 2010,
but sales through August 2012 are running at a rate of 18.1 percent
above the 2011 level. A composite index of housing affordability for
July 2012 showed that families earning the median income had 182.0
percent of the income needed to purchase a median-priced existing
single-family home, which is very high by historical standards.
HMDA data for 2011, the most recent year for which such data are
available, indicated that in comparison with 2010, applications for
conventional home purchase loans from black borrowers fell by 1
percent, following a 31 percent decrease in 2010. Applications by
Hispanic borrowers increased by 2 percent in 2011, following a 34
percent decrease in 2010. Applications from white borrowers were
unchanged in 2011, following a 23 percent decrease in 2010.
[[Page 67538]]
Denial rates for black and Hispanic applicants, however, decreased
from 2009 to 2011. For black applicants, the denial rate dropped from
32.3 percent in 2009 to 30.9 percent in 2010 and 2011, while the denial
rate for Hispanics dropped from 25.6 percent in 2009 to 22.9 percent in
2010 and 21.7 percent in 2011.\10\
---------------------------------------------------------------------------
\10\ See Board of Governors of the Federal Reserve, ``The 2009
HMDA Data: The Mortgage Market in a Time of Low Interest Rates and
Economic Distress,'' Federal Reserve Bulletin, available at http://www.federalreserve.gov/pubs/bulletin/2010/pdf/2009_HMDA_final.pdf;
``The Mortgage Market in 2010: Highlights from the Data Reported
under the Home Mortgage Disclosure Act,'' available at http://www.federalreserve.gov/pubs/bulletin/2011/pdf/2010_HMDA_final.pdf;
and ``The Mortgage Market in 2011: Highlights from the Data Reported
under the Home Mortgage Disclosure Act,'' available at http://www.federalreserve.gov/pubs/bulletin/2012/pdf/2011_HMDA.pdf.
---------------------------------------------------------------------------
Low housing prices impacted existing homeowners as the number of
foreclosures and underwater mortgages--where a homeowner owes more than
the value of the home--remained at elevated levels. Although the number
of homes with foreclosure filings fell 34 percent relative to 2010, 1.9
million homes were foreclosed on in 2011.\11\ Foreclosure figures
likely would have been higher in 2011 had it not been for processing
slowdowns as a result of concerns about foreclosure practices and
documentation, including some state foreclosure rules that
significantly lengthen foreclosure times. Some housing analysts project
higher foreclosure rates in 2012, with a downward trend beginning in
2013. As of the second quarter of 2012, the share of underwater
mortgages was at a near-record high of 22.3 percent, and 4.7 percent of
mortgaged homes had less than 5 percent equity.\12\ The concentration
of underwater borrowers is even higher for non-Enterprise loans. FHFA
has estimated that less than 10 percent of borrowers with Enterprise
loans had negative equity in their homes (9.9 percent in June 2011),
whereas loans backing private label securities were more than three
times more likely to have negative equity (35.5 percent in June
2011).\13\
---------------------------------------------------------------------------
\11\ See ``2011 Year-End Foreclosure Report: Foreclosures on the
Retreat (January 9, 2012), available at http://www.realtytrac.com/content/foreclosure-market-report/2011-year-end-foreclosure-market-report-6984.
\12\ See CoreLogic ``Q22012 Negative Equity Report,'' available
at: http://www.corelogic.com/about-us/researchtrends/asset_upload_file486_16724.pdf.
\13\ See http://www.fhfa.gov/webfiles/23056/PrincipalForgivenessltr12312.pdf.
---------------------------------------------------------------------------
According to the Mortgage Bankers Association (MBA), single-family
mortgage activity totaled $363 billion in the first quarter of 2012,
compared to $302 billion in the first quarter of 2011. Total
originations in 2011 were $1,262 billion, with 68 percent of the total
being refinancings.\14\
---------------------------------------------------------------------------
\14\ See http://www.mbaa.org/ResearchandForecasts/ForecastsandCommentary.
---------------------------------------------------------------------------
One result of the mortgage crisis is that the mortgage market now
has stricter and less flexible lending standards. According to the
Board of Governors of the Federal Reserve System's Senior Loan Officer
Opinion Survey, underwriting standards tightened beginning in late 2006
and have not significantly eased since that time.\15\ In the near term,
underwriting standards can be expected to continue to be conservative.
In addition, high vacancy rates, foreclosures and unemployment may
continue to dampen the housing recovery.
---------------------------------------------------------------------------
\15\ Board of Governors of the Federal Reserve System, Senior
Loan Officer Opinion Survey (November 7, 2011).
---------------------------------------------------------------------------
FHFA has considered the above data in assessing national housing
needs as required by the Safety and Soundness Act. FHFA has concluded
that it is not necessary to adjust the benchmark levels based
specifically on this factor.
2. Economic, Housing and Demographic Conditions
Increased role of FHA in the marketplace. The composition of the
affordable conventional mortgage market is also influenced by FHA's
market share. FHA loans generally are pooled into mortgage-backed
securities (MBS) guaranteed by the Government National Mortgage
Association (GNMA). Enterprise purchases of mortgages insured by FHA
and mortgages guaranteed by VA generally do not receive housing goals
credit. As a result, a higher FHA share of the market results in a
smaller proportion of affordable loans among loans that can be counted
for purposes of the housing goals. FHA's share of the market rose
significantly during 2008 through 2010, reaching a share of the home
purchase mortgage market of nearly 40 percent in 2010 before falling to
30 percent in 2011, as measured by HMDA data. FHA announced last year
an annual mortgage insurance (MI) premium increase of 25 basis points,
effective April 18, 2011.\16\
---------------------------------------------------------------------------
\16\ See U.S. Dept. of Housing and Urban Development., Mortgagee
Letter 11-10 (Feb. 14, 2011), available at http://portal.hud.gov/hudportal/documents/huddoc?id=11-10ml.pdf.
---------------------------------------------------------------------------
High unemployment. In addition to being an indicator of the health
of the economy in general, labor market conditions affect the housing
market more directly because buying a house is considered a large
investment and a long-term commitment that requires stable employment.
Nonfarm payroll employment increased by 114,000 in September 2012,
following increases of 181,000 in July and 142,000 in August. The
unemployment rate has steadily fallen from 9.1 percent in August 2011
to 7.8 percent in September 2012. NeighborWorks, a national network of
community-based organizations actively involved in foreclosure
mitigation counseling, has estimated that the two leading causes of
mortgage default rates were a reduction in income (37 percent of
defaults) and loss of income (21 percent of defaults).\17\ To the
extent that high unemployment rates impact lower-income wage earners
more than higher-income wage earners, there could be fewer mortgage
originations for goal-qualifying borrowers and, therefore, fewer such
mortgages available for purchase by the Enterprises.
---------------------------------------------------------------------------
\17\ See NeighborWorks, ``National Foreclosure Mitigation
Counseling Program--Congressional Update--Activity Through January
31, 2010'' p. 41 (May 28, 2010), available at http://www.nw.org/network/nfmcp/documents/CongressionalReportandAppendices.pdf.
---------------------------------------------------------------------------
State of the refinance market. The size of the refinance mortgage
market has an impact on the share of affordable refinance mortgages.
Historically, refinance mortgage volume increases when the refinancing
of mortgages is motivated by low interest rates, i.e., ``rate and term
refinances,'' and this increased volume is dominated by higher-income
borrowers. As a result, in periods of low interest rates, the share of
lower-income borrowers will decrease. Likewise, refinancings that
occurred when interest rates were high tended to have a higher
proportion of lower-income homeowners who were consolidating their
debts or who were drawing equity out of their homes for other uses.
While there are fewer mortgage refinancings for both lower-income and
higher-income borrowers during high interest rate periods, the decrease
is larger for higher-income borrowers.
In the current economic environment, lower-income homeowners tend
to have less equity--or negative equity--in their homes because the
prices of lower-valued homes have fallen more than the prices of
higher-valued homes.\18\ At the same time, lenders have tightened
underwriting requirements, requiring higher down payments and higher
credit scores. As a result, fewer lower-income homeowners may be able
to refinance in 2012 and 2013. In addition,
[[Page 67539]]
programs established in the wake of the financial crisis have affected
refinancings. The Home Affordable Refinance Program (HARP), which
became effective in March 2009 and was expanded in 2011, is an effort
to enhance the opportunity for owners to refinance. Homeowners whose
mortgages are owned or guaranteed by Fannie Mae or Freddie Mac and who
are current on their mortgages have the opportunity to reduce their
monthly mortgage payments to take advantage of historically low
mortgage interest rates. An essential element of this program is the
permission to carry forward into the new loan any existing MI from
prior mortgages or, if no MI existed, none would be required for the
refinanced mortgage. Even under favorable interest rate conditions,
however, refinancings may not mirror previous years, thus FHFA is
reducing the low-income refinance goal from 21 percent in the proposed
rule to 20 percent in this final rule.
---------------------------------------------------------------------------
\18\ See The Joint Center for Housing Studies of Harvard
University, ``The State of the Nation's Housing, 2011,'' p. 40
(2011) (Table A-8), available at http://www.jchs.harvard.edu/research/publications/state-nation%E2%80%99s-housing-2011.
---------------------------------------------------------------------------
3. The Performance and Effort of the Enterprises Toward Achieving the
Single-Family Housing Goals in Previous Years
Section 1332(a) of the Safety and Soundness Act, as amended by
section 1128(b) of HERA, requires FHFA to establish three single-family
owner-occupied home purchase mortgage goals for the Enterprises: A goal
for low-income families; a goal for families that reside in low-income
areas; and a goal for very low-income families. Section 1332(a) also
requires FHFA to establish a goal for single-family refinancing
mortgages for low-income families. The following section discusses the
Enterprises' performance on these single-family goals in 2010-2011 and,
to provide perspective, reviews what performance would have been on
these four single-family goals had they been in effect from 2006
through 2009.
The figures shown in Tables 1-4 for 2010 and 2011 are official
performance results as determined by FHFA, based on loan-level
information submitted by the Enterprises. The housing goals in the
Safety and Soundness Act, as amended, apply to the Enterprises'
acquisitions of ``conventional, conforming, single-family, purchase
money mortgages financing owner-occupied housing'' for the targeted
groups. The figures exclude units financed by Enterprise purchases of
private label securities (PLS), since such units were not counted
toward the goals in 2010 or 2011.
Low-Income Families Home Purchase Goal. The low-income families
home purchase goal applies to mortgages made to ``low-income
families,'' defined as families with incomes no greater than 80 percent
of area median income (AMI).\19\ As indicated in Table 1, Fannie Mae's
performance in 2011 (25.8 percent) was comparable to its performance in
2010 (25.1 percent) and to what it would have been in 2009 (25.5
percent), somewhat higher than it would have been in 2008 (23.1
percent), and somewhat lower than it would have been in 2006 and 2007
(27.7 percent and 26.0 percent). Freddie Mac's performance in 2011
(23.3 percent) was below its performance in 2010 (26.8 percent) but
comparable with what it would have been in any year from 2006-2009
(22.1 percent-25.4 percent).
---------------------------------------------------------------------------
\19\ See 12 U.S.C. 4502(14).
---------------------------------------------------------------------------
Very Low-Income Families Home Purchase Goal. The very low-income
families home purchase goal applies to mortgages made to ``very low-
income families,'' defined as families with incomes no greater than 50
percent of AMI. In essence, this operates as a subgoal of the low-
income families housing goal, which applies to families with incomes no
greater than 80 percent of AMI.
As indicated in Table 2, Fannie Mae's performance in 2011 (7.6
percent) was comparable to its performance in 2010 (7.2 percent) and to
what it would have been in 2009 (7.3 percent), higher than it would
have been in 2007 and 2008 (6.4 percent and 5.5 percent), and lower
than it would have been in 2006 (7.7 percent). Freddie Mac's
performance in 2011 (6.6 percent was below its performance in 2010 (7.9
percent), but comparable with what it would have been in the 2006-2009
period (5.3 percent-7.2 percent).
BILLING CODE 8070-01-P
[[Page 67540]]
[GRAPHIC] [TIFF OMITTED] TR13NO12.000
[[Page 67541]]
[GRAPHIC] [TIFF OMITTED] TR13NO12.001
[[Page 67542]]
Low-Income Areas Home Purchase Goal and Subgoal. Three categories
of mortgages qualify for the low-income areas housing goal:
(1) Home purchase mortgages for families in low-income census
tracts, defined as tracts with median family income no greater than 80
percent of AMI;
(2) Home purchase mortgages for families with incomes no greater
than 100 percent of AMI who reside in minority census tracts, defined
as tracts with minority population of at least 30 percent and a median
family income less than 100 percent of AMI; and
(3) Home purchase mortgages for families with incomes no greater
than 100 percent of AMI who reside in Federally-declared disaster areas
(regardless of the minority share of the population in the tract or the
ratio of tract median family income to AMI).
FHFA established an overall goal for this category of home purchase
mortgages of 24 percent for 2010-2011. As indicated in Table 3, Fannie
Mae's performance in 2011 (22.4 percent) was below its performance in
2010 (24.0 percent) and also lower than it would have been in 2009
(26.9 percent) and in 2008 (25.5 percent). Freddie Mac's performance in
2011 (19.2 percent) was much lower than in 2010 (23.0 percent) and also
much lower than it would have been in 2009 (25.0 percent) and in 2008
(25.5 percent).
The 2010-2011 final rule also established a subgoal for the low-
income and high-minority census tracts components of the goal. For 2010
and 2011, FHFA set the benchmark level for this subgoal at 13
percent.\20\ As indicated in Table 3, Fannie Mae's performance on the
subgoal in 2011 (11.6 percent) was somewhat lower than in 2010 (12.4
percent) and also lower than it would have been in 2009 (13.3 percent)
and in 2008 (15.1 percent). Freddie Mac's performance on the subgoal in
2011 (9.2 percent) was lower than in 2010 (10.4 percent) and also lower
than it would have been in 2009 (11.6 percent) and in 2008 (15.2
percent).
---------------------------------------------------------------------------
\20\ Affordability levels in low-income and high-minority areas,
but not for disaster areas, can be adequately modeled using
econometric time series forecast models.
---------------------------------------------------------------------------
[[Page 67543]]
[GRAPHIC] [TIFF OMITTED] TR13NO12.002
[[Page 67544]]
Low-Income Families Refinancing Housing Goal. The refinancing
housing goal is targeted to low-income families, i.e., families with
incomes no greater than 80 percent of AMI, and applies to mortgages
that are given to pay off or prepay an existing loan secured by the
same property. Thus, the goal does not apply to home equity or home
purchase loans.
Qualifying permanent modifications of loans for low-income families
under the Administration's Home Affordable Modification Program (HAMP)
are counted toward the refinancing housing goal. The impact of such
modifications on goal performance is shown in Table 4.
Table 4 shows the Enterprises' performance on this goal for 2010-
11, as well as what performance would have been if the goal had been in
effect for the preceding four years. Performance shown for all years
excludes units financed by Enterprise purchases of PLS, because such
units were not counted toward the goals in 2010 or 2011.
As indicated in Table 4, Fannie Mae's performance in 2011 (23.1
percent) was higher than in 2010 (20.9 percent) and comparable with
what it would have been in 2006-2009 (23.0 percent-26.6 percent).
Freddie Mac's performance in 2011 (23.4 percent) was higher than in
2010 (22.0 percent) and in 2009 (21.7 percent), but comparable with
what it would have been in 2006-2008 (23.2 percent-26.0 percent).
[[Page 67545]]
[GRAPHIC] [TIFF OMITTED] TR13NO12.003
4. The Ability of the Enterprises To Lead the Industry in Making
Mortgage Credit Available
Leading the industry in making mortgage credit available includes
making mortgage credit available to primary market borrowers at
differing income levels with varying credit profiles living in various
markets. Leadership also relates to the Enterprises' loss mitigation
efforts, implementation of loan modification and refinance programs and
support for state and local housing finance agencies.
The Enterprises, along with FHA and VA, now lead the market in
making mortgage credit available. In 2011, the Enterprises remained the
largest issuers of MBS, guaranteeing 72 percent of single-family MBS.
Policymakers have expressed concern with the extent of
[[Page 67546]]
government support for housing. The Enterprises' losses have depleted
their capital and resulted in their being sustained only by infusions
of capital from the U.S. Treasury under the Senior Preferred Stock
Purchase Agreements. FHFA as conservator exercises statutory authority
to conserve and preserve the Enterprises' assets, and to place the
Enterprises in a sound and stable condition. Consistent with those
responsibilities, FHFA has announced a number of steps to encourage
more private participation in the mortgage market. FHFA has taken into
account all of the foregoing considerations in assessing the
Enterprises' ability to lead the industry in making mortgage credit
available as required by the Safety and Soundness Act. FHFA has
concluded that it is not necessary to adjust the benchmark levels based
specifically on this factor.
5. Other Mortgage Data
HMDA data reported by loan originators is the primary source of
reliable mortgage data for establishing the single-family housing
goals. In setting the housing goal benchmark levels, FHFA evaluates the
Enterprises' performance with respect to leading or lagging the housing
market under specific goals and compares HMDA data with mortgage
purchase data provided by the Enterprises. FHFA also uses other
reliable data sources including: The American Housing Survey (AHS);
U.S. Census Bureau demographics; commercial sources such as Moody's;
and other industry and trade research sources, e.g., MBA, Inside
Mortgage Finance Publications, NAR, National Association of Home
Builders (NAHB), and the Commercial Mortgage Securities Association.
The FHFA Monthly Interest Rate Survey (MIRS) is used to complement
forecast models for home purchase loan originations by making intra-
annual adjustments prior to the public release of HMDA mortgage data.
In the development of economic forecasts, FHFA uses data and
information from Wells Fargo, PNC, Fannie Mae, Freddie Mac, and The
Wall Street Journal Survey. In addition, FHFA uses market and economic
data from the Bureau of Labor Statistics, the Federal Reserve Board,
the Department of Commerce Bureau of Economic Analysis, and FedStats.
6. Market Size
Expectations for the 2012 and 2013 single-family mortgage market
are for slow growth. Quantifiable factors influencing FHFA's outlook
for the mortgage market include general growth in the economy,
employment, inflation, and the interest rate environment. Industry
observers expect subprime mortgage market activity to remain minimal
through 2013. The FHA-insured mortgage market share is expected by
industry observers to continue to be a major factor in the
affordability levels in the conventional market as FHA loans will
continue to be an attractive option for low-income homebuyers.\21\ The
effects of unemployment, FHA market share, and refinancing have been
discussed previously (see Section 2). The effects of interest rates,
house prices, the overall housing market, manufactured housing, and the
market outlook are discussed below.
---------------------------------------------------------------------------
\21\ FHFA monitors the economic, housing and mortgage market
forecasts of 12 industry and government entities. These entities are
referred to as ``industry observers.'' For more information, and
specifically which economic indicators each entity forecasts, see
``Market Estimation Model for the 2012-2014 Enterprise Single-Family
Housing Goals'' published at FHFA's Web site, www.fhfa.gov.
---------------------------------------------------------------------------
Market outlook. Industry observers' economic and mortgage market
forecasts are presented in Tables 5 and 6. On average, industry
forecasters project the economy to continue to grow in 2012 and 2013,
with Real Gross Domestic Product (GDP) growing at rates of just over
2.0 percent over the period. These industry observers also expect the
unemployment rate to remain just above 8.0 percent during the remainder
of 2012, and falling to 7.8 percent in the fourth quarter of 2013.
[[Page 67547]]
[GRAPHIC] [TIFF OMITTED] TR13NO12.004
[[Page 67548]]
[GRAPHIC] [TIFF OMITTED] TR13NO12.005
BILLING CODE 8070-01-C
Interest rates. Affordability in the mortgage market depends in
part on the interest rate environment. Mortgage interest rates are
impacted by many factors. Interest rates on longer term financial
instruments such as mortgages typically follow the fluctuations of the
10-Year Treasury note yield, with approximately a 190 basis point
spread reflecting the differences in liquidity and credit risk in 2012
and 180 basis point spread expected in 2013. With uncertainty in the
financial markets of the European Union, the U.S. financial markets
have seen increased demand as financial instruments here are seen as a
``safe haven.'' Overall, interest rates in the United States are
heavily influenced by the monetary policies of the Federal Reserve
Board's Federal Open Market Committee (FOMC). During the current
economic environment, since mid-2008, the FOMC has maintained an
accommodative monetary policy in support of its dual mandate of
fostering maximum employment and price stability. In its September 12-
13, 2012 meeting, the FOMC stated that it is committed to a low federal
funds rate policy (at 0 to 0.25 percent) through mid-2015: ``[t]o
support continued progress toward maximum employment and price
stability, the Committee expects that a highly accommodative stance of
monetary policy will remain appropriate for a considerable time after
[[Page 67549]]
the economic recovery strengthens.'' \22\ This monetary policy,
combined with the international demand for U.S. financial instruments,
has led to historically low interest rates in the mortgage market. The
longer term 30-year fixed-rate mortgage interest rate has fallen from
4.9 percent at the beginning of 2011 to 3.49 percent in Freddie Mac's
September 20, 2012 Primary Mortgage Market Survey. Shorter term fixed-
and adjustable-rate mortgage interest rates remain at historical lows,
for example, on September 20, 2012, Freddie Mac reported that the
average one-year adjustable-rate mortgage rate was 2.61 percent. As a
major contributor to the cost of mortgage financing, lower interest
rates directly affect the affordability of buying a home or refinancing
a mortgage. As the economic recovery strengthens in the near future and
if the European situation stabilizes, it is expected that interest
rates, particularly longer term interest rates, will rise. For the
2012-2013 period, as shown in Table 6, forecasts show that all interest
rates are expected to remain at historical lows, including the interest
rate on a 30-year fixed-rate mortgage, which is expected to remain near
3.6 percent in the fourth quarter of 2012 and to only reach 3.9 percent
by the fourth quarter of 2013.
---------------------------------------------------------------------------
\22\ Federal Open Market Committee, Press Release, September 13,
2012.
---------------------------------------------------------------------------
House prices. Trends in house prices influence the housing and
mortgage markets. In periods of house price appreciation, home sales
and mortgage originations increase as the expected return on investment
rises. In periods of price depreciation or price uncertainty, home
sales and mortgage originations decrease as risk-averse homebuyers are
reluctant to enter the market. House prices fell during 2009 through
2011, but are expected to end 2012 up slightly from the fourth quarter
2011. House prices are expected to continue with modest increases
through 2013 (see Table 6).
Housing market. An active housing market is generally good for the
affordable home market. When there are more homes for sale, potential
home buyers have more options, prices tend to be more competitive and
the search costs to find affordable housing decrease. Historical
volumes for sales of both new and existing houses are shown in Table 6,
along with forecasts for 2012-2013. Total home sales reached a 10-year
annual low in 2010 at 4.5 million units. Home sales increased slightly
in 2011 to 4.6 million units, and industry observers expect that home
sales will increase to 4.9 million units in 2012 and to 5.3 million
units in 2013--well below 2004-2006 levels.
During 2009 and early 2010, special homebuyers tax credits were
available for first-time and repeat homebuyers. Mortgages to first-time
homebuyers tend to be more likely to qualify for housing goals than
those for repeat homebuyers, who tend to be older and have higher
incomes. Many first-time homebuyers whose mortgages might otherwise
have been available to receive goal-qualifying loans for home purchases
in 2012-2014 instead bought their homes in 2009 or 2010 to take
advantage of the first-time homebuyers tax credit.
Manufactured housing loans. Between 2009 and 2011, 63 percent of
manufactured housing loans were higher priced, according to HMDA data.
Because chattel-financed loans do not count towards achievement of the
housing goals, it was necessary to adjust the HMDA figures with respect
to market estimates to account for this part of the manufactured
housing market. Accordingly, FHFA down-weighted the average 2009 to
2011 manufactured housing contribution to the goals market estimates by
80 percent for the home purchase mortgage goals and 40 percent for the
refinance mortgage goal. This resulted in the market estimate for the
low-income home purchase housing goal being reduced by 1.4 percent, the
very low-income home purchase housing goal and the low-income areas
home purchase housing goal by 0.6 percent, and the low-income borrower
refinance housing goal by 0.2 percent. The projected market estimates
in Table 5 reflect these adjustments.
Housing goal outlook. FHFA's estimates of the market performance
for the two single-family owner-occupied home purchase housing goals
and one subgoal, and the refinancing mortgage housing goal, are
provided in Table 5. For 2012 and 2013, FHFA estimates that the low-
income borrower shares of the home purchase mortgage market will be
27.0 percent and 26.3 percent, respectively. FHFA estimates that the
very low-income borrower share of the home purchase mortgage market
will be 8.3 percent for 2012 and 8.2 percent for 2013. FHFA estimates
that the share of subgoal-qualifying mortgages in low-income areas in
the home purchase mortgage market, excluding designated disaster areas,
will be 11.8 percent in 2012 and 11.9 percent in 2013.
The refinance share of the market, as measured by the MBA, averaged
68 percent in 2011. With interest rates projected to rise during 2012-
2013, industry observers expect the refinance share of total
originations to decrease. Generally speaking, decreasing refinance
share leads to a higher percentage of refinance originations made up of
lower-income borrowers. Accordingly, with a projected refinance share
of 72 percent in 2012 and 52 percent in 2013, FHFA's market model
estimates that 19.9 percent of refinance mortgages will be made to low-
income borrowers in 2012 and 22.6 percent in 2013. These estimates are
reflective of historical lending patterns and trends. However, as
evidenced by the Federal Reserve Bank of Philadelphia's Community
Outlook Survey, the tightening of underwriting standards will impact
the access to credit of lower-income borrowers. In this survey of
organizations servicing low- and moderate-income populations (those
with incomes less than 80 percent of AMI), only 2 percent of the
respondents saw an increase in the access to credit in the second
quarter of 2012, and only 4 percent of the respondents saw an increase
in the access to credit in the first quarter of 2012.\23\
---------------------------------------------------------------------------
\23\ Federal Reserve Bank of Philadelphia, Second Quarter 2012
Community Outlook Survey, August 2012.
---------------------------------------------------------------------------
To arrive at the market estimates, FHFA used an econometric state
space methodology to extend the trends of the market performance for
each goal, based on a monthly time series database provided by the
Federal Financial Institutions Examination Council (FFIEC) and the
Federal Reserve Board. For the low-income areas goal, this model
produced the market estimates for only the subgoal. The remainder of
the market estimates for this goal relates to the designated disaster
areas. FHFA will provide the 2012-14 estimates of the share of home
purchase mortgages that will qualify for the designated disaster areas
portion of the low-income areas goal to the Enterprises in January of
each year.
7. Need To Maintain the Sound Financial Condition of the Enterprises
FHFA's duties as conservator require the conservation and
preservation of the Enterprises' assets. While reliance on the
Treasury's backing will continue until legislation produces a final
resolution to the Enterprises' future, FHFA is monitoring the
activities of the Enterprises to: (a) Limit their risk exposure by
avoiding new lines of business; (b) ensure profitability in the new
book of business without deterring market participation or hindering
market recovery; and (c) minimize losses on the mortgages already on
their books. Given the importance of the Enterprises to the housing
market, any goal-setting must be closely linked to
[[Page 67550]]
putting the Enterprises in sound and solvent condition.
B. Single-Family Housing Goal Benchmark Levels
FHFA used all relevant information when determining the benchmark
levels for the 2012 and 2013 housing goals. While the tightening of
underwriting standards is not included in the market estimates
calculation, it was considered in the determination of the benchmark
levels. FHFA attempts to use the most current data possible when
estimating market size, including information from FHFA's MIRS and
combined Fannie Mae and Freddie Mac refinance goal performance data to
extend HMDA performance data. FHFA used estimated market series of
goal-qualifying shares provided by Freddie Mac that are based on MIRS
data from January 2004 to May 2012. In addition, FHFA used the combined
Enterprise performance data from January 2001 to July 2012 to inform
the market estimates for the refinance goal. Guidance for calculating
market size using historical HMDA data is provided in the ``Market
Estimation Model for the 2012-2014 Enterprise Single-Family Housing
Goals'' published by FHFA on its Web site.\24\
---------------------------------------------------------------------------
\24\ See http://www.fhfa.gov/Default.aspx?Page=72.
---------------------------------------------------------------------------
Summary of comments. FHFA received a number of comments on the
benchmark levels of the single-family housing goals that were in the
proposed rule. Three housing advocacy groups and one trade association
stated that the proposed level for the low-income home purchase goal
benchmark (20 percent) was too low. They pointed out that it was
considerably below actual performance by both Enterprises in 2010 and
2011, which ranged from 23.3 percent to 26.8 percent. One of the
advocacy groups said that a low level of this benchmark could become a
``self-fulfilling prophecy.''
One advocacy organization argued that FHFA should not use the lower
end of the projected range of market estimates in setting this goal,
and that it should ``supplement its econometric state space model with
other forecasting techniques.'' A trade association stated that its
forecast of the housing market is more positive than that projected by
FHFA at the time of the proposed rule. An advocacy group noted that
FHA's market share had declined between 2009 and 2011, and felt that
this could lead to more goal-qualifying mortgages in the conventional
market. Also, a trade association stated that the proposed low-income
refinance goal (21 percent) was low relative to FHFA's market forecast
for 2013.
FHFA determination. FHFA has updated its forecasts of the goal-
qualifying shares of conventional conforming mortgages in 2012-2014, as
explained elsewhere in this final rule. Based on new housing data, more
recent forecasts from outside experts, and the factors described above,
Sec. 1282.12 of the final rule establishes the benchmark levels for
the single-family housing goals for 2012, 2013, and 2014 as follows:
Housing goal for low-income families. The benchmark level of the
annual goal for each Enterprise's purchases of purchase money mortgages
on owner-occupied single-family housing for low-income families is 23
percent of the total number of such mortgages purchased by that
Enterprise, an increase from the 20 percent level in the proposed rule.
This increase is supported by the fact that one of the statutory
factors to be used in setting goals is past performance, which, as
shown in Table 1, significantly exceeded the proposed goal level of 20
percent in 2010-2011.
Housing goal for very low-income families. The benchmark level of
the annual goal for each Enterprise's purchases of purchase money
mortgages on owner-occupied single-family housing for low-income
families is 7 percent of the total number of such mortgages purchased
by that Enterprise, as in the proposed rule.
Housing subgoal for families in low-income areas. The 2012-2014
benchmark level of the annual subgoal for each Enterprise's purchases
of purchase money mortgages on owner-occupied single-family housing for
families in low-income census tracts and for low- and moderate-income
families in minority census tracts is 11 percent of the total number of
such mortgages purchased by that Enterprise, as in the proposed rule.
Housing goal for families in low-income areas. The benchmark level
of the annual goal for each Enterprise's purchases of purchase money
mortgages on owner-occupied single-family housing for families in low-
income areas is set annually by notice from FHFA. The benchmark level
is based on the benchmark level for the low-income areas subgoal, plus
an adjustment factor that reflects the incremental percentage share
that mortgages for low- and moderate-income families in designated
disaster areas had in the most recent year for which data is available.
For 2012, this adjustment factor is 9 percentage points.
Impact of 2010 Census. This subgoal and goal were established for
2010-2011 based on data from the 2000 census. FHFA has also used 2000
census data in its modeling for forecasting the benchmark levels for
the single-family housing goals. However, the Enterprises are in the
process of transitioning from 2000 census data to 2010 census data as
the basis for reporting performance on this goal and subgoal. Due to
inadequate data, FHFA has not formulated this goal and subgoal in terms
of 2010 census data, but FHFA notes that there was an increase in the
number of low-income tracts and, especially, high-minority tracts
between 2000 and 2010. Thus, FHFA anticipates that this transition will
increase performance on this goal and subgoal.
Housing goal for refinancing mortgages. The benchmark level of the
annual goal for each Enterprise's purchases of refinancing mortgages on
owner-occupied single-family housing for low-income families is 20
percent of the total number of such mortgages purchased by that
Enterprise, a slight reduction from the 21 percent level in the
proposed rule.
V. Multifamily Housing Goals
A. Analysis of Factors for Multifamily Housing Goals
Section 1333(a)(4) of the Safety and Soundness Act requires FHFA to
consider the following six factors in setting the multifamily special
affordable housing goals:
(1) National multifamily mortgage credit needs and the ability of
the Enterprise to provide additional liquidity and stability for the
multifamily mortgage market;
(2) The performance and effort of the Enterprise in making mortgage
credit available for multifamily housing in previous years;
(3) The size of the multifamily mortgage market for housing
affordable to low-income and very low-income families, including the
size of the multifamily markets for housing of a smaller or limited
size;
(4) The ability of the Enterprise to lead the market in making
multifamily mortgage credit available, especially for multifamily
housing affordable to low-income and very low-income families;
(5) The availability of public subsidies; and
(6) The need to maintain the sound financial condition of the
Enterprise.\25\
---------------------------------------------------------------------------
\25\ 12 U.S.C. 4563(a)(4).
---------------------------------------------------------------------------
FHFA's analysis of each of the factors is set forth below.
1. National Multifamily Mortgage Credit Needs
In 2011, total multifamily mortgage originations increased by 60
percent as
[[Page 67551]]
commercial banks and thrifts significantly increased their multifamily
lending, according to MBA survey data.\26\ This trend has continued in
the first half of 2012. Life insurance companies, and to a limited
extent, commercial mortgage-backed securities (CMBS) issuers, increased
their lending volumes in the first half of 2012 compared to the first
half of 2011. As a result of traditional multifamily lenders re-
entering the market, the Enterprises' market share in terms of dollars
returned to pre-2008 levels.\27\
---------------------------------------------------------------------------
\26\ MBA Analysis Pegs 2011 Multifamily Lending at $110.1
Billion, Up 60% from 2010, MBA October 4, 2012, http://www.mortgagebankers.org/NewsandMedia/PressCenter/82273.htm.
\27\ Mortgage Bankers' Commercial/Multifamily Originations up 55
Percent to $184.3 Billion in 2011, MBA April 11, 2012, http://www.mortgagebankers.org/NewsandMedia/PressCenter/80430.htm.
---------------------------------------------------------------------------
Record low interest rates and robust performance by the multifamily
market have attracted banks and thrifts back to multifamily lending.
Banks and thrifts have helped to fill in the void left by the exit of
conduit lenders from multifamily lending in 2008. FHFA expects that in
2012 the Enterprises will likely see a decrease in their market share
of originations, based on second quarter 2012 loan origination data
provided by the MBA.\28\ Freddie Mac's first half 2012 multifamily
production was about $12 billion in financing, which is about 67
percent higher than in the first half of 2011. Likewise, Fannie Mae has
seen a sharp increase in first half 2012 multifamily production volume.
Through June 30, 2012, Fannie Mae had purchased around $14 billion in
multifamily loans, compared to $10.5 billion in the first half of 2011.
The Enterprises' market share should continue to decline over the 2013-
2014 period, although the overall multifamily mortgage market should
slowly grow as the economy recovers. In arriving at this conclusion,
FHFA considered, among other factors, vacancy rates, demand for
multifamily housing, interest rates, property values, and new
multifamily starts.
---------------------------------------------------------------------------
\28\ Second Quarter Commercial/Multifamily Mortgage Originations
Up 25 Percent from Q2 2011, MBA July 31, 2012, http://www.mortgagebankers.org/NewsandMedia/PressCenter/81459.htm.
---------------------------------------------------------------------------
Vacancy rates and demand for multifamily housing. Declining vacancy
rates are usually associated with increased rents and greater investor
interest in multifamily properties. According to the U.S. Census
Bureau, rental vacancy rates fell from 9.2 percent in the second
quarter of 2011 to 8.6 percent in the second quarter of 2012.
``Effective rents,'' which are the rents that tenants actually pay,
increased at an annual rate of over 4 percent in markets tracked by
Axiometrics, a provider of commercial real estate data.\29\ Although
vacancy rates decreased and property values and rents increased,
multifamily construction permits were issued at an annualized rate of
274,000 in July 2012, which is still well below historical levels.
Continued low interest rates and increased demand for multifamily
housing should spur further increases in new multifamily construction.
Likewise, the lack of new units coming onto the market and the
prevailing low interest rates should continue to encourage multifamily
property owners to refinance. However, a rise in interest rates would
likely temper any increase in multifamily mortgage activity in 2013-
2014.
---------------------------------------------------------------------------
\29\ ``Axiometrics: National Effective Rents Up Slightly In
July,'' MortgageOrb.com (August 28, 2012), available at http://www.mortgageorb.com/e107_plugins/content/content.php?content.12282.
---------------------------------------------------------------------------
Property values. As of the end of June 2012, multifamily property
values were up over 24 percent from their low point in the third
quarter of 2009.\30\ However, multifamily property values are still
below peak levels reached in 2007. FHFA anticipates a continued rise in
multifamily property values in most markets for the rest of 2012 and
for the subsequent two years. Rising multifamily property values
usually spur increased refinancings, property sales, and new
construction activity.
---------------------------------------------------------------------------
\30\ ``June Swoon: CRE Pricing Recovery Hits Soft Patch,''
CoStar (August 2012), available at http://www.costar.com/News/Article/June-Swoon-CRE-Pricing-Recovery-Hits-Soft-Patch/140696.
---------------------------------------------------------------------------
2. The Performance and Effort of the Enterprises in Making Mortgage
Credit Available for Multifamily Housing in Previous Years
Multifamily Low-Income Housing Goal. The multifamily low-income
housing goal includes units affordable to low-income families (those
with incomes no greater than 80 percent of AMI, as defined in HERA).
Both Enterprises played major roles in funding multifamily units for
low-income families between 2006 and 2009, as shown in Table 7. Fannie
Mae financed an average of 346,000 such units over this period, peaking
at 447,000 units in 2008, while Freddie Mac financed an average of
226,000 such units over this period, peaking at 298,000 units in 2007.
The Enterprises followed different approaches to providing financing
for affordable multifamily properties, with Freddie Mac relying to a
significant extent on the purchase of CMBS or the issuance of Tax-
Exempt Bond Securitizations, while Fannie Mae depended to a greater
extent on the direct purchase of multifamily loans originated by its
Delegated Underwriting and Servicing (DUS) lenders.
In the final rule establishing the housing goals for 2010-2011,
FHFA set the minimum goal for Fannie Mae at 177,750 low-income
multifamily units per year, and the minimum goal for Freddie Mac at
161,250 such units per year, which were below the Enterprises' average
levels of purchases in 2006-2009. FHFA determined that in 2010 Fannie
Mae financed 214,997 low-income multifamily units, or 121 percent of
its goal, while Freddie Mac financed 161,500 such units, or 100.2
percent of its goal. In 2011, Fannie Mae financed 301,244 low-income
multifamily units, or 169 percent of its goal, while Freddie Mac
financed 229,001 such units, or 142 percent of its goal.
BILLING CODE 8070-01-P
[[Page 67552]]
[GRAPHIC] [TIFF OMITTED] TR13NO12.006
Multifamily Very Low-Income Subgoal. The multifamily very low-
income housing subgoal includes units affordable to very low-income
families (those with incomes no greater than 50 percent of AMI, as
defined in HERA). Enterprise financing of rental units for very low-
income families over the 2006-2011 period is reported in Table 8. On
average, from 2006 to 2009, Fannie Mae financed 83,000 such units each
year, peaking at 95,000 units in 2008, and Freddie Mac financed 39,000
such units each year, peaking at 59,000 units in 2007. The 2010-2011
housing goals regulation set the minimum subgoal for Fannie Mae at
42,750 very low-income multifamily units, and for Freddie Mac at 21,000
such units, which were below the Enterprises' average levels of loan
purchases in 2006-2009. FHFA determined that, in 2010, Fannie Mae
financed 53,908 very low-income multifamily units, or 126 percent of
its subgoal, while Freddie Mac financed 29,650 such units, or 141
percent of its subgoal. In 2011, Fannie Mae financed 84,244 very low-
income multifamily units, or 197 percent of its subgoal, while Freddie
Mac financed 35,471 such units, or 169 percent of its subgoal.
[[Page 67553]]
[GRAPHIC] [TIFF OMITTED] TR13NO12.007
Financing of low-income units in small multifamily properties.
Section 1333(a)(3) of the Safety and Soundness Act provides that the
Director shall require each Enterprise to report on its purchases of
mortgages on multifamily housing ``of a smaller or limited size that is
affordable to low-income families.'' \31\ Consistent with industry
practice, FHFA has defined small multifamily properties as those
containing 5 to 50 units.
---------------------------------------------------------------------------
\31\ 12 U.S.C. 4563(a)(3).
---------------------------------------------------------------------------
Small multifamily properties play an important role as a source of
affordable rental housing. According to the 2007 American Housing
Survey, multifamily properties containing 5-50 units constituted 77
percent of all multifamily units and 74 percent of the multifamily
units constructed in the previous 4 years. Table 9 reports information
on low-income units in small multifamily properties that were financed
by the Enterprises in 2006-2011.
[[Page 67554]]
[GRAPHIC] [TIFF OMITTED] TR13NO12.008
BILLING CODE 8070-01-C
Both Enterprises have decreased their purchases of small
multifamily mortgages in the past few years due to a lack of CMBS
issuances available for sale and a decline in the overall volume of
small multifamily loans available for purchase. Fannie Mae financed
58,931 low-income units in small multifamily properties in 2007, and an
average of 38,901 such units per year over the 2007-2009 period. This
number declined to only 12,460 units in 2010 but rebounded to 22,382
units in 2011. Freddie Mac has played a smaller role in the small
multifamily market, financing 2,147 low-income units in small
multifamily properties in 2007, an average of 1,283 units per year in
2007-2009, but only 459 units in 2010. Freddie Mac increased its small
multifamily purchases to 2,172 in 2011. These figures do not include
any units in small multifamily properties financed by the acquisition
of CMBS, which are not eligible for housing goals credit in accordance
with the 2010-2011 housing goals regulation. One trade association
criticized the Enterprises for their lack of support for mortgages on
small multifamily properties, and recommended reinstituting Department
of Housing and Urban Development's 2001-2003 ``bonus points'' for
purchase of such mortgages. It also stated that the Enterprises could
do more work with state housing finance agencies in this area.
FHFA does not believe expansion of small multifamily lending would
be appropriate during conservatorship given the increased risks,
resources and origination costs required to serve this market and given
that FHFA is striving to gradually shrink the Enterprises' footprint in
the market and shift credit risk to private capital. FHFA will continue
to require the Enterprises to report on their financing of low-income
unit in such properties, but this final rule does not establish
explicit goals for such mortgage purchases.
3. Multifamily Mortgage Market Size
With demand for multifamily housing increasing, the multifamily
mortgage market should continue to grow, both in terms of total
financing activity provided and total new multifamily units
constructed. The number of new multifamily units completed in 2011 was
129,000, according to the U.S. Census Bureau. The Census Bureau
estimates that, as of August 2012, the annualized number of new
multifamily completions was 209,000, a significant increase over
2011.\32\ As stated previously, MBA estimates that multifamily mortgage
originations totaled about $110 billion in 2011. Based on part year
2012 survey data from the MBA, FHFA anticipates there will be about a
25 percent increase in total multifamily originations in 2012, which
would put the market size at almost $137 billion. Thereafter,
multifamily originations should decline to near levels seen from 2000
to 2008.
---------------------------------------------------------------------------
\32\ ``New Residential Construction in August 2012,'' U.S.
Census Bureau, (Sept. 19, 2012), http://www.census.gov/construction/nrc/pdf/newresconst_201208.pdf.
---------------------------------------------------------------------------
As in prior years, multifamily housing goals are set separately for
each Enterprise and are measured in units rather than in dollar volume.
Several factors support continuing to establish different goal levels
for each Enterprise. First, loan maturities will be increasing for both
Fannie Mae and Freddie Mac from 2012 to 2014, but the increase for
Fannie Mae will be much greater than for Freddie Mac, thus allowing
Fannie Mae more opportunities to refinance maturing loans currently in
its portfolio which can be counted towards future housing goals.
Second, consistent with the 2010-2011 housing goals regulation,
multifamily units financed through CMBS purchases are not goals-
eligible. Historically, Freddie Mac has relied more heavily on
purchasing CMBS to obtain goals-eligible units than has Fannie Mae, so
the exclusion of CMBS purchases has a greater impact on Freddie Mac's
goals performance.
[[Page 67555]]
4. Ability of the Enterprises To Lead the Market in Making Multifamily
Mortgage Credit Available
The multifamily housing market has continued to improve in many
geographic areas during 2012 (e.g., decreasing vacancy rates,
increasing rents, rising property net operating income and rising
property values). As discussed above, FHFA expects this improvement to
continue through 2014. Fannie Mae and Freddie Mac have recently
represented a larger than usual portion of the multifamily mortgage
market. For example, the Enterprises estimate their average share of
the multifamily mortgage market, excluding FHA-insured loans, was 37
percent in the period from 2004 to 2007, before it jumped to 87 percent
in 2009.
By 2011, however, the Enterprises' multifamily mortgage market
share declined to about 57 percent as traditional competitors such as
life insurance companies, pension funds and banks re-entered
multifamily lending. The decline in Enterprise multifamily mortgage
market share should continue through 2013-2014, as these traditional
competitors increase their presence in the multifamily mortgage market.
5. Availability of Public Subsidies
Public subsidies for multifamily housing have been affected by the
mortgage credit crisis. The value of low-income housing tax credits
(LIHTCs), the most important source of equity for new low-income
housing development, fell in 2009 but has since recovered to a point
where the LIHTC market is substantially healthier. Total equity raised
through the sale of LIHTCs in 2011 was estimated to be about $8 billion
as compared to approximately $4.5 billion in 2009.\33\ In 2007, before
the mortgage crisis, about $9 billion in equity was raised through
LIHTCs. Demand for LIHTCs should continue in strong rental markets and
in markets where bank investors seek to meet Community Reinvestment Act
(CRA) goals. As LIHTC investments return to pre-2008 volumes,
opportunities for the Enterprises to finance LIHTC properties with
goals-eligible units should increase.
---------------------------------------------------------------------------
\33\ ``LIHTC Market in 2012, A Rosy Path Ahead,'' Tax Credit
Advisor, February 2012.
---------------------------------------------------------------------------
6. Need To Maintain the Sound Financial Condition of the Enterprises
The financial condition of both Enterprises is discussed in more
detail above. FHFA has considered the multifamily housing goals in
light of the importance of the Enterprises to the housing market and in
light of FHFA's duties as conservator to conserve and preserve the
assets of the Enterprises. The multifamily housing goal levels for
2012-2014 in the final rule are aligned with safe and sound practices,
and market realities.
B. Multifamily Housing Goal Levels
Summary of comments. FHFA received a number of comments on the
levels of the multifamily housing goals in the proposed rule. While
most commenters thought the proposed goals were appropriate, several
commenters said the goals should be increased, especially for very low-
income units.
Three housing advocacy groups and one trade association supported
the proposed levels of the low-income multifamily goals. One of these
commenters and another housing advocacy group recommended that these
goal levels be reexamined and possibly adjusted at a later date.
However, one trade association doubted that FHFA would raise these
goals at a later date.
One trade association and two housing advocacy groups stated that
the proposed levels of both the low-income and very low-income
multifamily housing goals were too low. One commenter specifically
stated that the goals for 2014 should be increased. Fannie Mae stated
that the proposed very low-income multifamily goal for Freddie Mac was
very low, relative to its own goal. Freddie Mac made no comment on the
proposed multifamily goals.
Fannie Mae presented detailed arguments to support its case that
the proposed multifamily goals might be too high, relative to the 2010-
2011 goals, and that they might be unattainable for 2013 and 2014
(though not for 2012), especially if the overall market is flat and its
share of the market declines, as it anticipates, with the return of
more private capital to the market.
Fannie Mae also stated that multifamily refinance volumes are
likely to remain ``muted'' through 2014, following the heavy
concentration of refinances in the 2005-2007 period.
FHFA determination. FHFA believes that the Enterprises' share of
multifamily mortgage originations in 2012 and 2013 will remain near or
somewhat above 2011 levels, because of the return of banks and thrifts
to multifamily lending. The CMBS market may rebound in 2013 and 2014 if
investors are willing to purchase the subordinated or ``B'' tranches of
these securities.
FHFA notes that both Enterprises' low-income multifamily goal and
very low-income multifamily subgoal performance last year exceeded the
goals then in effect by wide margins. The Enterprises' 2011 performance
also exceeded the levels of all of the proposed goals and subgoals for
2012-2014, by significant margins. FHFA also notes that interest rates
on multifamily properties have been very low, and are likely to remain
low in light of the policies of the Federal Reserve Board. New
construction of multifamily properties has also increased in recent
months.
In addition, both Enterprises have many multifamily mortgages that
will mature and require refinancing over the next several years.
Specifically, Fannie Mae's maturing multifamily mortgage volume is
projected to be $10.2 billion in 2012, $18.1 billion in 2013, and $14.3
billion in 2014. For Freddie Mac, maturing multifamily mortgage volume
is projected to be $3.3 billion in 2012, $6.6 billion in 2013, and $8.4
billion in 2014.
Based on partial 2012 results, FHFA estimates that both Fannie Mae
and Freddie Mac will surpass the goals in the proposed rule by 20
percent or more. Freddie Mac should more than double its projected
financing of very low-income units, while Fannie Mae's very low-income
performance should be 50 percent above the proposed goal. As a result,
in the final rule, FHFA has revised upward both the low-income and very
low-income multifamily goal and subgoal levels for 2012 through 2014,
measured in qualifying units financed, as follows:
Multifamily low-income housing goal. Under the final rule, the
annual goal for Fannie Mae's purchases of mortgages on multifamily
housing affordable to low-income families is at least 285,000 units in
2012; 265,000 units in 2013; and 250,000 units in 2014. The annual goal
for Freddie Mac's purchases of mortgages on multifamily housing
affordable to low-income families is at least 225,000 units in 2012;
215,000 units in 2013; and 200,000 units in 2014. These goal levels
reflect the Enterprises' increased financing activity and the slow
return of other sources of capital to the multifamily mortgage market.
The percentage increases in the goals for Freddie Mac are greater than
for Fannie Mae over the 2012-2014 period because part year data for
2012 show Freddie Mac closing the gap in financing low-income
multifamily units.
Multifamily very low-income housing subgoal. Under the final rule,
the annual subgoal for Fannie Mae's purchases of mortgages on
multifamily housing affordable to very low-income families is at least
80,000 units in 2012, 70,000
[[Page 67556]]
in 2013, and 60,000 in 2014. The annual subgoal for Freddie Mac's
purchase of mortgages on multifamily housing affordable to very low-
income families is at least 59,000 units in 2012, 50,000 in 2013, and
40,000 in 2014. These very low-income goal levels for both Enterprises
are substantially higher than in the proposed rule, because their
actual financing of very low-income units has been significantly higher
than what was forecast in the proposed rule.
VI. Special Counting Requirements--Multifamily Property Conversions
Section 1282.15(d) requires the Enterprises to use tenant income to
determine the affordability of rental units, when such information is
available, and to use rent levels where tenant income information is
not available. Some commenters on the proposed 2010-2011 housing goals
rule raised concerns that using current rent information could lead to
counting a multifamily mortgage as ``affordable'' in cases where the
property is expected to convert from affordable rents to market rate
rents. In the final 2010-2011 rule, FHFA indicated that it expected to
address this issue in a subsequent rulemaking.\34\ In the proposed
2012-2014 housing goals rule, FHFA did not propose any change to the
existing counting rules for determining affordability for multifamily
mortgages, but requested comment on whether the counting rules should
be revised to require the Enterprises to use ``projected rents'' to
determine affordability, if such projected rents are available.
---------------------------------------------------------------------------
\34\ See 75 FR 55926.
---------------------------------------------------------------------------
Summary of comments. Six commenters and both Enterprises addressed
this issue. Two housing advocacy groups and one trade association
stated that FHFA should take steps to avoid awarding credit toward the
housing goals for properties which are subsequently converted from
affordable rents to market rents. On the other hand, two other housing
advocacy groups, a trade association and both Enterprises stated that
any such adjustments would be costly to implement, and that it would be
very difficult to use ``projected rents'' in measuring the
affordability of rental units which might be converted from affordable
to market rate units.
Fannie Mae commented that the requirements to monitor such
conversions would be burdensome and impractical, and based on its
experience, it believes that such conversions are relatively rare.
Fannie Mae further stated that it does not structure permanent loans
using projected rents under its underwriting standards, and it raised
concerns that such a provision could discourage capital expenditures to
improve the condition of properties. In addition, Fannie Mae discussed
the operational issues involved in collecting projected rents and the
certification of projected rent rolls.
This issue was the only one discussed by Freddie Mac in its
comments on the proposed rule. Freddie Mac stated that its underwriting
is based on actual rents, not projected rents, referring to this as a
``matter of fundamental credit risk discipline.'' Freddie Mac added
that use of projected rents could constrain the flow of Enterprise
capital projects to geographic areas or specific projects for which
rents might increase due to market forces. Freddie Mac also commented
that if projected rents were used in determining affordability,
logically such rents should be compared with projected incomes, thereby
introducing additional subjectivity and costs into the process.
FHFA determination. The arguments made by the Enterprises and
several other commenters against the use of ``projected rents'' are
compelling, and the operational issues involved could discourage the
Enterprises from financing multifamily housing where these issues might
arise. Thus, FHFA has decided to continue its current counting rules,
which rely on the rent rolls at the time of mortgage origination, in
determining the affordability of rental units in multifamily
properties.
The Enterprises' underwriting standards for multifamily properties
use actual rents, as provided on the property rent roll at the time of
underwriting, rather than post-closing projected rents. This limits the
likelihood that an Enterprise will purchase a multifamily mortgage
where the financing depends on a higher net operating income due to
projected increases in current rents. The Enterprises may still
purchase such loans indirectly through purchases of CMBS. For example,
in one well-publicized case in New York City, rent-regulated properties
were purchased by investors planning on raising rents to market levels.
Both Enterprises invested in the private label CMBS that financed the
purchases and they received housing goals credit for these transactions
under the housing goals regulation then in effect. In the past, almost
all affordable rent to market rate conversions involving the
participation of the Enterprises were facilitated through their
purchases of CMBS. However, FHFA's current regulation specifies that
purchases of private label securities, including CMBS, are ineligible
for housing goals credit, removing any incentive for the Enterprises to
purchase CMBS to reach their multifamily housing goals. Accordingly,
these transactions would not have received goals credit under the
current regulation. Furthermore, in the New York City example,
subsequent litigation resulted in significant restrictions on the new
owners' ability to convert from rent-regulated to market rents, which
illustrates the difficulty of projecting whether currently affordable
rents can actually be raised.
VII. Paperwork Reduction Act
The final rule does not contain any information collection
requirement that requires the approval of the Office of Management and
Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
VIII. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that
a regulation that has a significant economic impact on a substantial
number of small entities, small businesses, or small organizations must
include an initial regulatory flexibility analysis describing the
regulation's impact on small entities. Such an analysis need not be
undertaken if the agency has certified that the regulation will not
have a significant economic impact on a substantial number of small
entities. 5 U.S.C. 605(b). FHFA has considered the impact of the final
rule under the Regulatory Flexibility Act.
The General Counsel of FHFA certifies that the final rule is not
likely to have a significant economic impact on a substantial number of
small entities because the regulation is applicable only to the
Enterprises, which are not small entities for purposes of the
Regulatory Flexibility Act.
List of Subjects in 12 CFR Part 1282
Mortgages, Reporting and recordkeeping requirements.
Authority and Issuance
For the reasons stated in the SUPPLEMENTARY INFORMATION, under the
authority of 12 U.S.C. 4511, 4513, and 4526, FHFA amends part 1282 of
title 12 of the Code of Federal Regulations as follows:
PART 1282--ENTERPRISE HOUSING GOALS AND MISSION
0
1. The authority citation for part 1282 is revised to read as follows:
Authority: 12 U.S.C. 4501, 4502, 4511, 4513, 4526, 4561-4566.
[[Page 67557]]
0
2. Amend Sec. 1282.12 by revising paragraphs (c)(2), (d)(2), (f)(2)
and (g)(2) to read as follows:
Sec. 1282.12 Single-family housing goals.
* * * * *
(c) * * *
(2) The benchmark level, which for 2012, 2013 and 2014 shall be 23
percent of the total number of purchase money mortgages purchased by
that Enterprise in each year that finance owner-occupied single-family
properties.
(d) * * *
(2) The benchmark level, which for 2012, 2013 and 2014 shall be 7
percent of the total number of purchase money mortgages purchased by
that Enterprise in each year that finance owner-occupied single-family
properties.
* * * * *
(f) * * *
(2) The benchmark level, which for 2012, 2013 and 2014 shall be 11
percent of the total number of purchase money mortgages purchased by
that Enterprise in each year that finance owner-occupied single-family
properties.
(g) * * *
(2) The benchmark level, which for 2012, 2013 and 2014 shall be 20
percent of the total number of refinancing mortgages purchased by that
Enterprise in each year that finance owner-occupied single-family
properties.
0
3. Amend Sec. 1282.13 by revising paragraphs (b) and (c) to read as
follows:
Sec. 1282.13 Multifamily special affordable housing goal and subgoal.
* * * * *
(b) Multifamily low-income housing goal.--(1) For the year 2012,
the goal for each Enterprise's purchases of mortgages on multifamily
residential housing affordable to low-income families shall be, for
Fannie Mae, at least 285,000 dwelling units affordable to low-income
families in multifamily residential housing financed by mortgages
purchased by that Enterprise, and for Freddie Mac, at least 225,000
such dwelling units.
(2) For the year 2013, the goal for each Enterprise's purchases of
mortgages on multifamily residential housing affordable to low-income
families shall be, for Fannie Mae, at least 265,000 dwelling units
affordable to low-income families in multifamily residential housing
financed by mortgages purchased by that Enterprise, and for Freddie
Mac, at least 215,000 such dwelling units.
(3) For the year 2014, the goal for each Enterprise's purchases of
mortgages on multifamily residential housing affordable to low-income
families shall be, for Fannie Mae, at least 250,000 dwelling units
affordable to low-income families in multifamily residential housing
financed by mortgages purchased by that Enterprise, and for Freddie
Mac, at least 200,000 such dwelling units.
(c) Multifamily very low-income housing subgoal.--(1) For the year
2012, the subgoal for each Enterprise's purchases of mortgages on
multifamily residential housing affordable to very low-income families
shall be, for Fannie Mae, at least 80,000 dwelling units affordable to
very low-income families in multifamily residential housing financed by
mortgages purchased by that Enterprise, and for Freddie Mac, at least
59,000 such dwelling units.
(2) For the year 2013, the subgoal for each Enterprise's purchases
of mortgages on multifamily residential housing affordable to very low-
income families shall be, for Fannie Mae, at least 70,000 dwelling
units affordable to very low-income families in multifamily residential
housing financed by mortgages purchased by that Enterprise, and for
Freddie Mac, at least 50,000 such dwelling units.
(3) For the year 2014, the subgoal for each Enterprise's purchases
of mortgages on multifamily residential housing affordable to very low-
income families shall be, for Fannie Mae, at least 60,000 dwelling
units affordable to very low-income families in multifamily residential
housing financed by mortgages purchased by that Enterprise, and for
Freddie Mac, at least 40,000 such dwelling units.
Dated: October 31, 2012.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2012-27121 Filed 11-9-12; 8:45 am]
BILLING CODE 8070-01-P