FHFA proposes new framework for GSEs' Duty to Serve affordable housing

Key facts

• The FHFA has proposed a new framework for the Duty to Serve regulation.
• The new framework will replace the existing Duty to Serve regulation.
• The proposal aims to encourage Fannie Mae and Freddie Mac to serve underserved markets.
• The new framework places an emphasis on chattel loans for manufactured housing.
• The proposal is outcome-based.

The Federal Housing Finance Agency (FHFA) has put forth a proposal to replace the current Duty to Serve (DTS) regulation that governs Fannie Mae and Freddie Mac. The agency intends to shift from the existing framework to an outcome-based model designed to encourage the government-sponsored enterprises (GSEs) to more effectively serve underserved markets. A key component of this proposed change is a new emphasis on chattel loans, which are crucial for financing manufactured housing. This strategic pivot aims to foster more tangible and impactful results in the GSEs' efforts to support affordable housing initiatives across the nation. The FHFA's proposal seeks to create a more dynamic and responsive regulatory environment for affordable housing finance.