The Federal Housing Finance Agency (FHFA), the regulator of Fannie Mae and Freddie Mac (the Enterprises), released a proposed rulemaking for the Enterprises outlining how much capital Fannie and Freddie would have to retain once released from conservatorship. As referenced in a recent statement, FHFA Director Mark Calabria sees this as the next step towards eventually releasing the Enterprises from conservatorship.
"This national health crisis has affirmed the importance of the Enterprises' mission to serve the American housing market during good times and bad. When credit dries up, low- and moderate-income households are hurt most. We must chart a course for the Enterprises toward a sound capital footing so they can help all Americans in times of stress," said FHFA Director Mark Calabria. "More capital means a stronger foundation on which to weather crises. The time to act is now."
Based on September 2019 asset totals, the proposed rule would require the enterprises to hold a combined total of about $234 billion.
Since taking over the FHFA, Director Calabria has stated that his goal is to eventually release the Enterprises from conservatorship. In order to achieve that goal, one of his first hurdles is to establish a capital framework and identify a process for raising the required capital.
NMHC and NAA provided comments on the last proposed rule in November 2018. We are currently analyzing this re-proposed rule to determine its impact to the Enterprises’ multifamily businesses and will be submitting comments to the FHFA during the 60-day comment period.
For more information on NMHC’s advocacy work during the COVID-19 pandemic, please visit the NMHC COVID-19 Hub.
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