NLIHC Submits Comments on Proposed Rule on Fannie and Freddie’s Duty-to-Serve

On March 17, NLIHC submitted comments responding to the Federal Housing Finance Agency’s (FHFA) proposed rule detailing Fannie Mae and Freddie Mac's duty-to-serve (DTS) underserved markets required by the Housing and Economic Recovery Act of 2008.

Under the proposed rule, the government-sponsored entities (GSEs) would be required to serve three specific underserved markets: manufactured housing, affordable housing preservation, and rural markets. The proposed rule requires the GSEs to submit plans for improving the "distribution and availability of mortgage financing in a safe and sound manner for residential properties that serve very low-, low-, and moderate-income families."

NLIHC’s comments state, “The Housing and Economic Recovery Act of 2008 included provisions requiring the Enterprises to serve undeserved markets, as well as contribute to the National Housing Trust Fund (NHTF) and Capital Magnet Fund (CMF), and meet certain affordable housing goals. Together, these requirements have the potential to serve as an important tool in addressing America’s growing rental crisis.”

NLIHC’s comments make several recommendations to strengthen and improve the rule including:

  • Allowing the GSEs to receive DTS credit for supporting new construction that preserves subsidies of existing affordable rental housing units,
  • Ensuring GSEs develop products and underwriting guidelines that are compatible with federal housing programs that serve extremely low income families, 
  • Advising FHFA not to allow the GSEs to reenter the Low Income Housing Tax Credit investment market unless changes in market conditions necessitate their participation,
  • Requiring the GSEs to support activities that not only promote residential economic diversity but also promote residential racial and ethnic diversity, and
  • Encouraging the GSEs to support activities that would prevent the displacement of residents living in gentrifying communities.

NLIHC also endorsed the comments of the Housing Assistance Council and the National Manufactured Home Owners Association in regard to the GSEs’ DTS rural and manufactured housing markets.

Read NLIHC’s comments at:

Read the proposed rule at: