FHFA’s New Housing Goals Raise Concerns About Affordable Housing Access
The Federal Housing Finance Agency (FHFA) has finalized new housing goals for Fannie Mae and Freddie Mac covering 2026 through 2028, but experts are concerned the changes may restrict housing opportunities for low-income Americans. The revised benchmarks lower requirements for supporting lower-income homebuyers, which Hannah Jones of Realtor.com describes as “lowering the bar” for these mortgage giants. While these adjustments might align with current market conditions, they potentially reduce critical protections ensuring affordable financing access during an ongoing affordability crisis in American housing.
Understanding these changes requires appreciating the enormous influence Fannie Mae and Freddie Mac wield over the American housing market. These government-sponsored enterprises back the majority of the nation’s 51 million residential mortgages and operate under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, which mandates affordable housing goals for their mortgage purchases. These benchmarks must be periodically updated by the FHFA to ensure they promote housing accessibility while reflecting market realities. The goals effectively determine what percentage of Fannie and Freddie’s mortgage acquisitions must meet specific affordability criteria, directly affecting who can access conventional mortgage financing.
The most significant changes in the new rule involve single-family mortgage benchmarks, which have been substantially reduced. For low-income households (those with incomes up to 80% of area median income), the benchmark has dropped from 25% to 21% of total mortgages. For very low-income households (those with incomes up to 50% of area median income), the requirement plummeted from 6% to just 3.5%. Similarly, refinance mortgages for low-income borrowers saw their benchmark fall from 26% to 21%. The FHFA has also simplified its regulatory framework by consolidating previously separate area-based subgoals into a single low-income areas subgoal and removing temporary “measurement buffers” that had provided compliance flexibility. While multifamily housing targets remain unchanged, the reduction in single-family benchmarks has sparked debate about potential impacts on housing accessibility.
Perspectives on these changes vary dramatically across the housing sector. FHFA Director William J. Pulte, appointed by President Trump, framed the changes as a correction to what he called harmful mandates that “prioritized government quotas at the expense of middle-class families.” He argues the new approach will support “affordable homeownership for all Americans.” The Mortgage Bankers Association’s president Bob Broeksmit welcomed the reduced single-family refinance goal as a “constructive step” reflecting today’s higher interest rate environment, suggesting it promotes “a more sustainable approach to affordable lending.” He also praised the multifamily benchmarks for supporting both affordable and market-rate housing production to expand supply and potentially reduce rental costs.
However, housing affordability experts remain concerned about what these lower benchmarks mean for already vulnerable populations. Hannah Jones of Realtor.com notes that the real-world impact will largely depend on how quickly housing supply and affordability improve across the country. While she expects some relief from lower mortgage rates in the coming year, she cautions that “the improvement is likely to be modest for many U.S. households, meaning affordability challenges may persist.” The reduction in requirements for supporting low-income borrowers comes at a particularly challenging time for housing affordability nationwide, with high home prices and interest rates already creating significant barriers to homeownership for first-time buyers and those with modest incomes.
The final rule on these new housing goals is scheduled to take effect on February 23, 2026, giving market participants time to prepare for the changes. The debate over these revised benchmarks reflects broader tensions in American housing policy between market-oriented approaches that emphasize fewer regulations and social equity concerns focused on ensuring housing access for all economic classes. As the implementation date approaches, housing advocates, industry participants, and policymakers will be closely monitoring how these reduced benchmarks might affect mortgage availability and homeownership opportunities, particularly for traditionally underserved communities. The changes represent a significant shift in how the federal government approaches affordable housing goals through its most powerful housing finance tools, with potential long-term consequences for the American housing landscape.
