As many of you are aware, we were successful in getting “shared equity homeownership” incorporated into the Federal Housing Finance Agency’s (FHFA) “duty-to-serve” rule. This is a complex new rule that requires Fannie Mae and Freddie Mac (the Enterprises) to increase liquidity and access to financing in three underserved markets for lower income households: (1) manufactured housing, (2) affordable housing preservation, and (2) rural housing. Shared equity homeownership and support for other local affordable housing activities, such as inclusionary zoning or preserving affordable projects, are now eligible under the “affordable housing preservation” market.
FHFA and both Enterprises are extremely impressed with our engagement in the rule-making and planning process that began through our regular meetings with all three institutions. We submitted a detailed public comment letter and strategically organized members and national partners to submit written comments, which resulted in a strong final rule that will help lower income homebuyers. We also submitted a 14-page white paper that analyzes each Enterprise’s Selling Guide by type of shared equity homeownership model with concrete recommendations for changes that would ensure that all buyers of shared equity homes could access Fannie Mae and Freddie Mac mortgage products. The white paper was very well received, but we didn’t stop there! We organized roughly a dozen Grounded Solutions’ representatives to participate in three “listening sessions” across the country with FHFA and the Enterprises, where we presented additional needs and priorities that would improve access to mortgages, such as improving lender training and outreach, incentivizing originations, and clarifying appraisal procedures.
The Enterprises used our input to inform their proposed Underserved Market Plans, which are currently open for public comment until July 10th. We are in the midst of intense analysis of these plans, and we will be submitting public comments designed to maximize the activities that the Enterprises will pursue for shared equity buyers and homeowners. We are partnering with the Lincoln Institute of Land Policy to hold an event that will yield additional public comment at the end of June in Nashville, TN. We are also organizing with national partners and some members to inform comments. However, we have been told that “deep analysis” with concrete recommendations submitted from national entities on behalf of their members is the most helpful and effective way to influence the Plans. Hence, we are not requesting a field-wide call to action.
When FHFA sought input on the proposed guidance for evaluating the Enterprises’ duty to serve plans, we submitted a 6-page public comment with specific suggestions for improving the draft evaluation plan to ensure that the Enterprises are incentivized to undertake the most impactful activities. Ultimately, this Evaluation Guidance will be used to assess whether the Enterprises meet their obligations under the rule, which means that it will heavily influence the Enterprises’ final Plans.
We are working extremely hard to maximize the impact of the duty-to-serve rule for housing with lasting affordability. Grounded Solutions Network staff has been gathering input from members, lenders, appraisers, and other stakeholders for years to ensure that we can effectively portray the priorities and needs of the field. Please let us know if you have questions or comments.