WASHINGTON — The Federal Housing Finance Agency has released a proposal to change the way the Federal Home Loan Banks set housing goals.
The proposed rule would establish a new benchmark for small Federal Home Loan Bank System members to pursue housing goals, set a new housing goal for members that is calculated as a share of total asset purchases and eliminate a volume threshold for meeting the goals in favor of different categories of mortgage purchases.
Home Loan banks purchase mortgages through the system's "acquired member asset" purchases (AMA) program, which is voluntary.
“To be successful, housing goals should lead the FHLBanks to make affordable housing part of their business plans for AMA," FHFA Director Mel Watt said in a statement. “The overall approach of the proposed amendments will encourage FHLBanks and their members to build on the strengths of the AMA program to assist targeted borrower groups in a safe and sustainable manner."
A Federal Home Loan bank is subject to the housing goals if its AMA purchases exceed a volume threshold of $2.5 billion, which is consistent with market levels.
The public is invited to submit comments on the proposal within 90 days after it is published in the Federal Register. The FHFA is also holding a webinar Nov. 8 to further explain the proposal and answer questions.
