Written by: Internal Analysis & Opinion Writers
The Federal Housing Finance Agency (FHFA) has introduced proposed housing goals for Fannie Mae and Freddie Mac that would cover the 2026–2028 period, prompting a sharp divide in reaction among industry leaders and housing advocates.
Under the new proposal, the FHFA plans to significantly lower key benchmarks tied to affordable lending. The low-income home purchase goal would drop from 25% to 21%, while the goal for very low-income households—defined as borrowers earning no more than 50% of area median income—would be reduced from 6.5% to 3%. Additionally, the agency aims to consolidate the minority-tract and low-income census tract subgoals into a single unified target called the “low-income areas” goal.
Mortgage industry associations largely praised the shift. Groups such as U.S. Mortgage Insurers (USMI) said the updated goals reflect a “balanced” approach to reducing regulatory burdens while still promoting access to credit. Other trade organizations noted that previous targets may have distorted origination trends by forcing lenders to meet quotas that didn’t always align with borrower demand or credit quality.
On the other side of the debate, consumer-focused organizations and affordable housing advocates criticized the move as a retreat from public responsibility. In a joint letter, 28 advocacy groups—including the Consumer Federation of America—warned that these changes could result in 177,000 fewer affordable mortgages over the next three years. They argued that the proposed rollback could harm first-time buyers, especially those in historically underserved communities.
The FHFA also proposed eliminating “measurement buffers,” which had previously allowed Fannie Mae and Freddie Mac some leeway when market conditions made goal achievement difficult. The agency contends that buffers can create distortions by encouraging lenders to overcompensate in certain loan categories. However, some industry groups argue that removing these buffers could add volatility and penalize lenders during periods of market fluctuation.
The broader implications of the proposal are complex. On one hand, lenders may benefit from fewer compliance headaches and increased flexibility in product offerings. On the other hand, critics believe that rolling back affordable lending targets could disproportionately affect minority borrowers, renters looking to become homeowners, and low- to moderate-income families—especially in high-cost markets.
The FHFA closed its public comment period on November 3, 2025. Now, stakeholders across the mortgage ecosystem are watching to see how the final rule will balance industry concerns with the GSEs’ longstanding mission to support housing access for underserved communities.
