New FHFA Strategic Plan and Scorecard Lay Path for GSEs to Exit Conservatorship, Support Administration Reform Plan

The government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac will be expected to prepare for a responsible end to their conservatorships and to help to implement the Trump Administration’s housing finance reform proposals under the Federal Housing Finance Agency’s (FHFA’s) newly-released Strategic Plan for 2019 and Enterprise Scorecard for 2020. The new Strategic Plan, released this morning, outlines FHFA’s goals and priorities for managing the conservatorships of Fannie Mae and Freddie Mac. The Scorecard, also published this morning, describes the steps FHFA expects each of the firms to undertake next year to fulfill the Strategic Plan.

This is the first Strategic Plan and Scorecard for the GSEs that FHFA has released under Director Mark Calabria. The new Strategic Plan is a notable departure from those released when the agency was headed by Mel Watt. Specifically, the new plan includes what FHFA calls “a new vision for reform” that will focus on three broad objectives for the GSEs:

  1. Foster competitive, liquid, efficient, and resilient (which the Report and Scorecard refer to as “CLEAR”) national housing finance markets that support sustainable homeownership and affordable rental housing
  2. Operate in a safe and sound manner appropriate for entities in conservatorship
  3. Prepare for eventual exit from conservatorship

The Scorecard includes specific actions the GSEs must take to comply with these objectives. Calabria elaborated on the plan during a speech given this morning at the Mortgage Bankers Association’s annual conference.

FHFA also declares in the Strategic Plan that it supports the goals of the Trump Administration’s recently released housing finance reform plans and that it will work with Treasury and HUD to pursue further reforms. The agency also pledges to pursue administrative and legislative reforms of the housing finance system while simultaneously preparing the GSEs to leave conservatorship. The Scorecard directs the GSEs to help implement the administration’s plans if directed to do so by FHFA.

With regard to affordable housing, the Scorecard directs the GSEs to continue fulfilling their obligations through the Affordable Housing Goals and Duty-to-Serve Underserved Markets rule but emphasizes that such initiatives should be carried out in a sustainable manner. The GSEs are also mandated to continue their efforts to explore and utilize alternative credit scoring models and increase access to credit for non-English-speaking borrowers.

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