Affordable Housing Coalition Commends New Rural Mortgage Product 

As affordable housing markets continue to evolve, the financial landscape is shifting. With an increasing number of mortgages originating from non-federally regulated lenders, Fannie Mae and Freddie Mac (“the Enterprises,” or GSEs) play a pivotal role in shaping access to affordable housing finance. A scorecard recently released by the Underserved Mortgage Markets Coalition identifies important areas where the GSEs have made progress in serving low- and moderate-income families—and spotlights opportunities for improvement.

Since 2018, the federal “Duty to Serve” (DTS) regulation has required the GSEs to prioritize serving three historically neglected markets: manufactured housing, affordable housing preservation, and rural housing. The goal of Duty to Serve is to increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for very low-, low-, and moderate-income families in those markets. Within their DTS requirements, each Enterprise must plan for outreach, loan product offerings, loan purchases, and investments and update their plans every three years with targeted objectives. The Enterprises’ latest revision, Fannie Mae and Freddie Mac’s Duty to Serve (DTS) Underserved Market Plans for 2025–2027, was released in November 2024. 

The Underserved Mortgage Markets Coalition (UMMC)—a coalition of 42 leading US housing organizations convened by the Lincoln Institute of Land Policy—has long advocated for more focused action to improve outcomes for underserved markets, including through the Enterprises’ DTS commitments. In response to the updated plan, the coalition published a scorecard identifying the biggest successes and shortcomings of the 2025–2027 market plans and highlighting progress over time in some areas while underscoring shortcomings in others.  

DTS plans are required by federal regulation to prioritize affordable housing finance, and the Scorecard 2025 evaluates the development of efforts around those priorities, such as new loan products, the GSEs’ purchasing efforts in targeted markets, and new partnership opportunities. The recent update incorporates several elements that the UMMC recommended in its DTS Blueprint 2024, as well as several opportunities for further improvement. 

With the release, the coalition noted the positive steps that have occurred but also called on the Enterprises to do more to reach underserved housing markets. 

“The UMMC commends Freddie Mac for including a Consumer Development Financial Institution- (CDFI) preferred product pilot in rural markets, among myriad positive steps toward expanding attainable homeownership,” said Jim Gray, who leads the UMMC in his role as senior fellow at the Lincoln Institute. “This program will also allow CDFIs to effectively collaborate with the GSEs and develop loan products and training designed for hard-to-reach markets—activities for which the coalition has long advocated.” 

CDFIs have a strong track record of serving their communities and helping those they serve achieve sustainable homeownership. With a shared goal of expanding access to homeownership and reaching underserved communities and populations, CDFIs are a natural conduit for helping the GSEs achieve their housing and affordability goals and reduce ethnic and racial wealth gaps. 

The Enterprises’ plans to purchase loans in manufactured housing communities received strong marks. With high site rents making manufactured housing a less affordable option than it traditionally has been, particularly for residents on fixed incomes, this initiative helps bridge an important gap in financing.  

While the UMMC is encouraged by these new initiatives, it also identifies critical gaps in Fannie Mae and Freddie Mac’s plans. The Scorecard highlights that both Enterprises fall short of the UMMC’s recommendations for energy efficiency loan purchases and green product development, which are increasingly essential as energy costs continue to rise and threaten long-term affordability. These programs, the UMMC asserts, are vital for ensuring that housing remains sustainable and accessible in the face of economic pressures. Additionally, the UMMC calls for stronger engagement in Native American markets, urging both Enterprises to set higher loan purchase targets for lending on tribal land, which remains an underfinanced housing market. 

The UMMC strongly urges Fannie Mae and Freddie Mac to carefully consider the scorecard when refining their Duty to Serve plans and calls on the Federal Housing Finance Agency (FHFA) to factor the scorecard into its evaluation of the Enterprises’ performance. 

As the 2025–2027 Duty to Serve plans unfold, the UMMC will continue to monitor their implementation. The coalition intends to release a revised scorecard yearly, assessing how effectively the GSEs have carried out their plans and whether they have met the expectations established by affordable housing advocates. 

Allison Ehrich Bernstein is principal at Allative Communications.

Lead image: Single-family homes in a rural area. Credit: Alex Potemkin via Getty Images.