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Lending: Fannie Mae Exceeds LMI Goals
Fannie Mae was given ambitious targets for its Year 2000 lending activities targeting low- and moderate-income households. And Fannie Mae not only met those targets, it exceeded them. More than 49% of the units financed by Fannie Mae were to low- and moderate-income households. Nearly 31% of the units were located in underserved areas.
The goals are set for Fannie Mae by HUD which has oversight of Fannie Mae. HUD set a LMI lending goal for Fannie Mae of 42%. When the numbers were in, Fannie Mae exceeded that target by a significant amount. The total was 49%. For purposes of Fannie Mae's lending, low- and moderate-income households are defined as those having incomes less than or equal to 100% of an area's median income.
Fannie Mae also exceeded the targets for lending in underserved areas. HUD set the target at 24% for the year; Fannie Mae's actual was 31%. The third goal, to place at least 14% of total units in special affordable housing, was also outdone. Fannie Mae actually reached 22%.
This lending record, in addition to being impressive, says two important things. First, this kind of lending is possible. All of the loans that Fannie Mae purchases must be of investment quality. This means that lots of loans to low- and moderate-income families are of investment quality. Second, Fannie Mae's lending should be playing a powerful role in any bank's CRA program. There is clearly a market for these loans.
Copyright © 2001 Compliance Action. Originally appeared in Compliance Action, Vol. 6, No. 2, 2/01
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