In the 1992 legislation Congress assigned to the Department of Housing and Urban Development two important regulatory roles that bear on Fannie Mae’s and Freddie Mac’s activities in the secondary multifamily market, related to the magnitude of their purchases of mortgages for lower-income households and their conformance to fair lending standards. The Department is required to establish numerical affordable housing goals for the two enterprises and periodically to review and comment on the underwriting and appraisal guidelines of each enterprise to ensure their consistency with fair lending laws.
This report supports the Department’s fulfillment of both of these statutory mandates. It provides an analysis of credit availability for affordable multifamily properties, credit gaps in segments of the market, and Fannie Mae and Freddie Mac’s position in the market. In addition, it discusses the applicability of fair lending laws to the multifamily activities of the two enterprises, and it makes recommendations for the Department’s regulatory approach. It should be of value to policy-makers, researchers, financial institutions, and members of the general public interested in multifamily housing finance and the role of the Government-sponsored housing enterprises.
