On November 25, the Federal Housing Finance Agency (FHFA) released Fannie Mae’s and Freddie Mac’s Equitable Housing Finance Plans and Underserved Markets Plans for 2025 through 2027.[1] These plans are similar to bank reinvestment requirements except that the FHFA does not evaluate and rate Fannie Mae’s and Freddie Mac’s performance. Instead, Fannie Mae and Freddie Mac submit plans, like the Community Reinvestment Act (CRA) strategic plan option, indicating how they will serve traditionally underserved populations and communities over the next three years.
You may recall that NCRC had commented on the draft plans. See here for our comment on Underserved Market Plans and here for the comment on the Equitable Housing Plans.
Overall, this memo indicates that the FHFA, Fannie Mae, and Freddie Mac did not adopt NCRC’s suggestions for improving the quantitative rigor of the plans. NCRC suggested that Fannie Mae and Freddie Mac engage in robust needs analysis that would indicate populations and areas with the most pressing needs and then direct their purchasing activity to these underserved borrowers and areas. FHFA has generally shied away from local goals or plans and instead focused Fannie Mae and Freddie Mac on national level goals and plans. However, banks must meet local needs under CRA, and they would be helped to a greater extent if Fannie Mae and Freddie Mac had more requirements to respond to local needs in their planning efforts. Occasionally, targets in terms of metropolitan areas or communities of color will crop up in Fannie’s and Freddie’s plans. NCRC will keep pushing for more state-level and local accountability.
These planning efforts suggest that FHFA, Fannie Mae, and Freddie Mac are more receptive to programmatic and partnership suggestions than quantitative planning ideas. This is an area for NCRC members to seek leverage. If NCRC members feel that needs for small dollar mortgages or other products are not being met, member organizations should approach Fannie Mae and Freddie Mac in addition to banks. Furthermore, community-based organizations including counseling organizations should approach Fannie Mae and Freddie Mac for partnership opportunities.
This memo first looks at the Equitable Housing Plans and then the Underserved Markets Plans. It will not attempt to cover all aspects of these plans but instead focuses on priority issues for NCRC.
Equitable Housing Finance Plans
The FHFA requires Fannie Mae and Freddie Mac to issue equitable housing finance plans that cover a three-year period. The FHFA released the 2025-2027 Equitable Housing Plans on November 25.
The Equitable Housing Plans describe efforts to reduce disparities in access to credit based on race and ethnicity. Fannie Mae and Freddie Mac focused on the following major areas.
Building credit history
NCRC had asked Fannie Mae to continue using positive rental payment history as an alternative to traditional credit history for loan underwriting. Underserved populations including people of color are less likely to have traditional credit history. Fannie Mae’s program of subsidizing property owners of rental units to report payments data was expiring. Fannie Mae pledged to use rental payment history for about 3,000 loans each year during its plan.[2]
NCRC had asked Fannie Mae to continue its subsidy program to encourage multifamily property owners to report positive rental payment history. Fannie Mae will do that for 2025, and the effort will cover about 620,000 rental units over all program years. Advocates may want to encourage Fannie Mae to renew this pilot program in future years.[3]
Freddie Mac pledges to enroll between 800,000 to one million renters over all program years for on-time rental payment reporting.[4] Going forward, NCRC had asked Fannie Mae and Freddie Mac to compare current goals to past ones for credit history reporting. This is one area to monitor for the 2028-2030 equitable plans to see how the future goals compare to the goals for 2025-2027.
Relieving up-front costs of housing
Fannie Mae has a HomeReady First product that allows lenders to use Fannie’s subsidies for downpayment and closing cost assistance. These loans must be made in predominantly minority census tracts. Fannie Mae has a goal that 70% of the customers be from a “historically underserved group.”[5] Fannie Mae’s plan indicates that its goal is to use HomeReady assist for 20,000 loans in 2025 increasing to 24,000 loans by 2027.[6]
While this product is commendable, NCRC had asked Fannie Mae and Freddie Mac to indicate how specific geographical areas were selected for equity efforts including low downpayment programs. In the case of HomeReady First, Fannie Mae chose 21 metropolitan areas but does not indicate why these were chosen.[7] Are downpayments the highest in these areas or are racial disparities the greatest in these areas? It is hard for stakeholders to judge the equity of these programs or to argue for another approach if no criteria is offered for selecting geographical areas. Also, data on the demographics of the borrowers would be useful to see if the 70% underserved borrower target was met. Fannie made no commitment on reporting the results of the HomeReady First program.
Overall, Fannie Mae has committed to purchasing 61,000 loans under Special Purpose Credit Programs like low downpayment programs in 2025, rising to 82,000 loans in 2027.[8] NCRC had asked for an analysis to indicate whether this activity would increase access to credit for underserved borrowers either nationally or in specific areas. Fannie Mae did not engage in this type of analysis.
Freddie Mac pledges to purchase lower numbers of Special Purpose Credit Program (SPCP) loans – about 16,000 annually during the plan term.[9] Freddie Mac should be asked why they are committing to significantly lower levels of SPCP loan purchases than Fannie Mae.
Other actions in pursuit of equity
Fannie Mae will assist between 60,000 to 80,000 borrowers annually via Social Mortgage Backed Securities that help underserved borrowers and areas through such products as small balance mortgage loans.[10] Freddie Mac offers a lower commitment in terms of dollars than Fannie Mae – $18 billion as opposed to $30 billion by 2027.[11] Stakeholders should ask Freddie Mac to increase its Social bond financing. In addition, both Freddie Mac and Fannie Mae should publish sufficient data to verify that this financing is targeted to traditionally underserved borrowers. Freddie Mac promises to provide impact data in its plan.[12]
Fannie Mae will increase housing choice for renters by using pricing incentives to encourage property owners to accept Section 8 rental vouchers. There are no numerical goals yet, but baselines will be established during the plan years.[13]
Fannie Mae and Freddie Mac also pledge to partner with housing and financial counselors to expand education efforts for renters and homeowners.
Fannie Mae and Freddie Mac Underserved Markets Plans 2025-2027
This memo focuses on rural housing, housing preservation, and energy efficiency, which is a sub-category of housing preservation. The other major category of the underserved plans includes manufactured housing.
Rural Housing
The plans do not describe demographics and housing needs in rural areas nor develop plans based on a needs analysis.
Fannie Mae, in its draft plan, described demographics and housing characteristics in distinct regions of rural America such as Lower Appalachia and the Mississippi Delta. But Fannie Mae did not describe housing needs, such as housing cost burdens, or loan levels per capita in each of the regions. After identifying areas with the highest needs, equitable goals could be developed for each region. Fannie Mae did not engage in this type of analysis and only pledged to increase research efforts in its plan to assess various needs. This is an area in which advocates can push Fannie Mae further to adopt NCRC’s recommendation. There is some beneficial research that Fannie Mae has conducted such as collaborating with Housing Assistance Council on heirs property issues.
Fannie Mae pledged to increase its purchasing activity of single-family loans by 7% annually from 2025 to 2027 in rural areas. But the plan does not include a discussion of equitable targeting of the purchases.[14] Likewise, Freddie Mac’s plan does not include geographical equitable goals.[15]
Fannie Mae reported high percentages of Native American homeowners and renters that experienced cost burdens but did not budge from its draft plans of purchasing between 10 to 20 loans on an annual basis that were made on reservations. The plan does not estimate the size of the primary market nor indicate feasible levels of purchasing activity based on the size of the primary market. Fannie Mae will deliver technical assistance to about 20 organizations serving Native American areas on an annual basis.[16]
Housing Preservation
NCRC’s comment on housing preservation reiterated our critique regarding rural housing. Neither Fannie Mae nor Freddie Mac conducted a needs analysis in the draft plans by county, state, or region indicating priority areas for financing affordable rental housing. The final plans remain devoid of a housing needs analysis nor a plan for geographical equity for financing rental housing.
Fannie Mae’s Section 8 loan purchases amount to financing about 23,000 units annually – the same as in their draft plan.[17] Freddie Mac’s goals are modestly higher, at 25,000 units by 2027.[18] An important aspect in Freddie Mac’s final plan is a commitment to purchase loans of Section 8 units in high opportunity areas. In other words, financing affordable housing for lower income households in areas that are not impoverished and provide increased job and other opportunities. Freddie Mac will commit to financing that will provide 5,600 units in 2025, rising to 6,200 units in 2027.[19] While this is commendable, targeting a significant segment of these units to metropolitan areas with higher levels of segregation would have enhanced the pro integrative aspects of Freddie Mac’s purchases that finance multifamily rental units.
For LIHTC projects, Fannie Mae’s loan purchases will finance the preservation or production of 27,000 units in 2027, which is 600 units higher than in their draft plan.[20] Freddie Mac’s targets are higher including financing that will provide 41,500 units by 2027.[21]
Energy Efficiency – Freddie Mac drops a purchase goal and Fannie Mae’s is low
Freddie Mac had a goal of purchasing about 300 loans annually from 2025 through 2027 in its draft plan that would finance energy efficiency improvements. This seems to be inexplicably deleted from its final plan.[22] Fannie Mae pledges to purchase 50 loans that finance energy efficiency by 2027, an increase of about 10 to 15 loans from its draft plans.[23] Given global warming, 50 loans appear to be a small number. It does not appear that Fannie Mae has estimated the size of the primary market in determining its goal. It would seem that the primary market finances considerably larger numbers of loans for energy efficiency and that it would be feasible for either Fannie Mae or Freddie Mac to pledge considerably higher numbers of purchases than the goals appearing in their draft and final plans.
On the positive side, the only allusion to needs analysis and then planning that NCRC found in reviewing final plans is from Freddie Mac’s section on energy efficiency, which engages in needs analysis in a minimal way. Freddie Mac pledges to:
Conduct a market analysis to identify areas in Duty to Serve high-needs rural regions with comparatively high percentages of energy cost-burdened households. Inform lenders, real estate professionals, housing organizations, potential homebuyers, and homeowners in at least one of the identified markets of the benefits of improved energy and water efficiency, Freddie Mac resources for identifying improvement opportunities, and financing options.[24]
It appears that at least Freddie Mac responded to the concept of needs analysis raised in NCRC’s comments. The challenge going forward is to push the FHFA, Freddie Mac, and Fannie Mae further in the direction of needs analysis informing purchasing goals.
[1] FHFA Unveils Enterprises’ Three-Year Plans to Improve Housing Opportunities for the Underserved, November 25, 2027, https://www.fhfa.gov/news/news-release/fhfa-unveils-enterprises-three-year-plans-to-improve-housing-opportunities-for-the-underserved
[2] Fannie Mae Equitable Plan, https://www.fhfa.gov/sites/default/files/2024-11/Fannie-Mae-2025-2027-EHFP.pdf, p. 23.
[3] Fannie Mae Equitable Plan, p. 27.
[4] Freddie Mac, Equitable Plan, https://www.fhfa.gov/sites/default/files/2024-11/Freddie-Mac-2025-2027-EHFP.pdf, p. 40.
[5] Fannie Mae Equitable Plan, p. 12.
[6] Fannie Mae Equitable Plan, p. 13
[7] Fannie Mae Equitable Plan, p. 12.
[8] Fannie Mae Equitable Plan, p. 14.
[9] Freddie Mac Equitable Plan, p. 22.
[10] Fannie Mae, Equitable Plan, p. 42.
[11] Fannie, p. 42, Freddie, p. 28.
[12] Freddie Mac Equitable Plan, p. 27.
[13] Fannie Mae Equitable Plan, p. 38.
[14] Fannie Mae Underserved Markets Plan, https://www.fhfa.gov/sites/default/files/2024-11/Fannie-Mae-2025-2027-UMP.pdf, p. 24
[15] Freddie Mac Underserved Plan, https://www.fhfa.gov/sites/default/files/2024-12/Freddie-Mac-2025-2027-UMP.pdf, p. 71.
[16] Fannie Mae, pp. 27-28.
[17] Fannie Mae, p. 73.
[18] Freddie Mac, p. 128.
[19] Freddie Mac, p. 131.
[20] Fannie Mae, p. 80.
[21] Freddie Mac, p. 122.
[22] Freddie Mac, pp. 108-113
[23] Fannie Mae, p. 89.
[24] Freddie Mac, p. 110.
