The federal agency that regulates the mortgage finance companies Fannie Mae and Freddie Mac on Wednesday set goals for the next two years to nudge them to provide mortgages to more low-income borrowers and to landlords who offer low rents to poor people.
The Federal Housing Finance Agency is required by a 2008 law that took effect after the collapse of the housing market to set annual targets for mortgages bought by Fannie and Freddie, the government-run institutions that back most home loans.
The goals act as directives for Fannie and Freddie to focus more of their business on affordable housing. The companies buy loans from private lenders, package them into mortgage-backed securities and provide a credit guarantee to investors to ensure timely payment.
Some advocates of housing for the poor expressed disappointment that the goals were not more ambitious. But the agency hailed the rules as an important lever for helping more poor families buy homes and for improving access to mortgages for landlords who rent out affordable apartments to low-income tenants in poverty-stricken neighborhoods.
“These goals establish a solid foundation for affordable and sustainable homeownership and rental opportunities in this country,” Melvin L. Watt, the agency’s director, said in a news release.
The housing market is improving, but still lags the boom years before the market collapsed. Many potential buyers still complain that they have trouble getting mortgages, that few homes are on the market and that rents are soaring.
The agency set separate targets for single-family housing including categories for mortgages for low-income families, very low-income families and families in low-income areas, and for refinancing mortgages. The goals for mortgages for owners of multifamily property also include separate targets for low- and very low-income families.
The agency said 24 percent of mortgages should be bought by Freddie or Fannie for homes for low-income borrowers, or those with incomes no greater than 80 percent of an area’s median income. That goal is one percentage point higher than the goal for 2014.
The National Community Reinvestment Coalition, which advocates affordable housing, said that the new target fell short of expectations.
“With demand up and the economy stronger, to say 24 percent is to create a standard that isn’t as helpful as what is needed,” said John Taylor, president of the organization, who called the new goals “a lost opportunity.”
The agency also set a goal of 6 percent of mortgages for borrowers considered very low income, who have incomes no greater than 50 percent of the median income of the area. That is slightly less ambitious than last year’s goal of 7 percent.
For multifamily units, the agency wants the lenders to back mortgages for 300,000 units a year through 2017 for low-income units and 60,000 a year for very low-income units.
For mortgages for small apartment complexes, the goals are 48,000 total low-income units for the next two years, less than half of the 105,000 total units originally proposed. The higher goals would have risked “crowding out” smaller lenders, the agency said, acknowledging that the final goals are modest but are intended to keep Fannie and Freddie active in this market.
The agency said that Fannie and Freddie had not fallen short of similar housing goals in the past, but that it could take action to ensure the goals are met if problems arise.
During the housing crisis, the federal government placed Fannie and Freddie in conservatorship, and they received a taxpayer bailout to avoid bankruptcies. They now pay their profits to the Treasury.
The agency said it had received 144 comment letters from advocacy groups and others on its proposed goals. A “significant number” of those letters questioned whether Fannie and Freddie should still be under conservatorship or were tied to unrelated matters.
“Those comments are beyond the scope of this rule-making,” the agency said.