FEDERAL HOME LOAN HYPOTHÈQUE CORP: Change of Directors or Key Officers (Form 8-K)

Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 17, 2021, the Federal Housing Finance Agency (FHFA) released the
2022 Scorecard for Freddie Mac (formally known as the Federal Home Loan Mortgage
Corporation).
Compensation for each of our named executive officers, other than our CEO, is
governed by the Executive Management Compensation Program. A principal element
of such compensation is deferred salary, a portion of which is subject to
reduction based on corporate and individual performance. One-half of a
participating officer's At-Risk Deferred Salary (or 15% of Target Total Direct
Compensation) is subject to reduction based on FHFA's assessment of Freddie
Mac's performance against the objectives and assessment criteria set forth in
the Scorecard. The Scorecard is set forth below.
                         2022 Scorecard for Freddie Mac
For all Scorecard items, Freddie Mac will be assessed based on the following
criteria:
Assessment Criteria
•Freddie Mac's products and programs foster sustainable and equitable housing
finance markets that support safe, decent, and affordable homeownership and
rental opportunities.
•Freddie Mac conducts business in a safe and sound manner.
•Freddie Mac meets expectations under all FHFA requirements, including those
pertaining to capital, liquidity, and credit risk transfer.
•Freddie Mac continues to manage operations while in conservatorship in a manner
that preserves and conserves assets through the prudent stewardship of Freddie
Mac resources.
•Freddie Mac cooperates and collaborates with FHFA to meet the Conservator's
priorities, directives, and guidance throughout the course of the year.
•Freddie Mac delivers work products that are high quality, thorough, creative,
effective, and timely, and that consider effects on borrowers and renters,
Freddie Mac and Fannie Mae (the Enterprises), the industry, and other
stakeholders.
•Freddie Mac ensures that diversity, equity, and inclusion remain top priorities
in strategic planning, operations, and business development.
Promote Sustainable and Equitable Access to Affordable Housing (50%)
Conduct business and undertake initiatives that support affordable, sustainable,
and equitable access to homeownership and rental housing, and fulfill all
statutory mandates.
Take significant actions to ensure that all borrowers and renters have equitable
access to long-term affordable housing opportunities.
•Develop strategies to support sustainable homeownership and affordable rental
housing.
•Improve availability of small-balance purchase and refinance mortgages.
•Develop high-quality Equitable Housing Finance Plans and take meaningful
actions to achieve the goals and objectives of the plans.
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•Meet Housing Goals and Duty-to-Serve requirements.
•Identify strategies and activities to facilitate greater affordable housing
supply within the limits of charter authorities and submit recommendations to
FHFA.
•Update the current pricing framework to increase support for core mission
borrowers, while ensuring a level playing field for small and large sellers,
fostering capital accumulation, and achieving viable returns on capital.
•Continue mortgage selling, servicing, and asset management efforts that promote
sustainable home-retention solutions for borrowers affected by the COVID-19
pandemic.
Foster competition and efficiency in housing finance markets.
•Modernize the single-family appraisal process to foster efficiency in mortgage
markets, and address barriers to equitable valuation.
•Complete the final phase of validation and approval of credit score models and
begin planning for implementation.
•Leverage technology and data to further promote efficiency and cost savings in
mortgage processes.
•Research and assess opportunities to increase access for small and regional
lenders to Freddie Mac multifamily products.
Manage new multifamily purchases to remain within the multifamily cap
requirements described in Appendix A, including expanded affordability
requirements.
Operate the Business in a Safe and Sound Manner (50%)
Operate with heightened focus on safety and soundness and with a prudent risk
profile consistent with continued support for housing finance markets throughout
the economic cycle, while minimizing the risk of requiring a draw against the
Treasury commitment in stressed scenarios.
Ensure that Freddie Mac is resilient to operational, market, credit, economic,
and climate risks.
•Address examination and supervision findings promptly.
•Maintain liquidity at levels required by FHFA and sufficient to sustain Freddie
Mac operations through severe stress events.
•Maintain effective risk management systems appropriate for entities that need
to minimize risk to capital as they rebuild their capital buffers.
•Ensure a governance structure exists to prioritize the effects of climate
change throughout Freddie Mac decision making.
•Continue to ensure a successful transition away from LIBOR to approved
alternative reference rates by continuing systems development and announcing
plans for the transition of legacy products.
Transfer a significant amount of credit risk to private investors, reducing risk
to taxpayers.
Ensure Common Securitization Solutions, LLC (CSS) operates in a safe and sound
manner in support of Enterprise securitization activities.
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Freddie Mac Form 8-K

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Appendix A: Multifamily Definitions
1.Market share target and review of market size
The 2022 Scorecard establishes a $78 billion cap on the multifamily purchase
volume of Freddie Mac applicable for calendar year 2022. Within this cap,
certain loans in affordable and underserved market segments are considered
"mission-driven." The 2022 Scorecard requires that a minimum of 50 percent of
Freddie Mac multifamily loan purchases be mission-driven in accordance with the
definitions herein. Furthermore, the 2022 Scorecard requires that a minimum of
25 percent of Freddie Mac multifamily loan purchases be affordable to residents
at 60 percent of area median income (AMI) or below. Loan purchases that meet the
minimum 25 percent requirement may also count as loan purchases that meet the
minimum 50 percent requirement. FHFA anticipates the $78 billion cap to be
appropriate given current market forecasts; however, FHFA will continue to
review its estimates of market size and mission-driven minimum requirements
throughout the year. To prevent market disruption, if FHFA determines that the
actual size of the 2022 market is smaller than was initially projected, FHFA
will not reduce the caps.
The following sections explain how FHFA will treat mission-driven loans for
purposes of the 2022 Scorecard.
2.Loans on targeted affordable housing properties
Targeted affordable housing loans are loans to properties encumbered by a
regulatory agreement or a recorded use restriction under which all or a portion
of the units are restricted for occupancy by tenants with limited incomes and
which restrict the rents that can be charged for those units. FHFA will classify
as mission-driven a proportionate amount of the loan for properties in the
targeted affordable category, depending on the percentage of units that are
restricted by a regulatory agreement or recorded use restriction. FHFA will
classify as mission-driven 50 percent of the loan amount if the percentage of
restricted units is less than 50 percent of the total units in a project, and
100 percent of the loan amount if the percentage of restricted units is equal to
or more than 50 percent.
The following are examples of loans on targeted affordable housing properties
that FHFA will classify as mission-driven:
•Loans on properties subsidized by the Low Income Housing Tax Credit (LIHTC)
program, which limits tenant incomes at 60 percent of AMI or below;
•Loans on properties developed under state or local inclusionary zoning, real
estate tax abatement, loan or similar programs, where the property owner has
agreed to: a) restrict a portion of the units for occupancy by tenants with
limited incomes in accordance with the requirements of the state or local
program and restrict the rents that can be charged for those units at rents
affordable to those tenants; and b) enforce these restrictions through a
regulatory agreement or recorded use restriction;
•Loans on properties covered by a Section 8 Housing Assistance Payment contract
where the contract limits tenant incomes to 80 percent of AMI or below. FHFA
will not consider a unit that is occupied by a Section 8 certificate or voucher
holder as a targeted affordable housing unit unless there is also a contract, a
regulatory agreement, or a recorded use restriction; and





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•Loans on properties where a Public Housing Authority (PHA), or a nonprofit
development affiliate of a PHA, is the borrower, and where the regulatory
agreement or recorded use restriction restricts all or a portion of the units
for occupancy by tenants with limited incomes and/or restricts the rents that
can be charged for those units.
On a case-by-case basis, FHFA will consider Freddie Mac requests to classify
other loans as mission-driven that meet affordable housing and mission goals but
do not meet the exact definition of targeted affordable housing. Requests may be
submitted for consideration only after meeting with FHFA to discuss the request.
FHFA will not consider Freddie Mac requests on loans where affordability is
predicated on borrower-initiated (or voluntary) rent restrictions.
3.   Loans on other affordable units
FHFA will classify as mission-driven units whose rents are affordable to tenants
at various income thresholds but that are not subject to a regulatory agreement
or recorded use restriction. FHFA will count as mission-driven, the pro rata
portion of the loan amount based on the percentage of units with affordable,
unsubsidized/market rents, as described below.
a. Loans on affordable units in standard markets
Standard markets are those that are not located in rural areas or in designated
cost-burdened or very cost-burdened renter markets. For properties located in
these markets, the income threshold for affordability is 80 percent of AMI or
below.
b. Loans on affordable units in cost-burdened or very cost-burdened renter
markets
In cost-burdened renter markets as designated by FHFA, the income threshold for
affordability is 100 percent of AMI or below. In very cost-burdened renter
markets as designated by FHFA, the income threshold for affordability is 120
percent of AMI or below.
4.   Loans on properties located in rural areas
Rural areas are those areas designated as such in the Duty to Serve regulation.
FHFA will classify as mission-driven, the pro rata portion of the loan amount
based on the percentage of units affordable at 100 percent of AMI or below.
5.   Loans on small multifamily properties
Small multifamily properties are properties that have 5 to 50 units. FHFA will
classify as mission-driven, the pro rata portion of the loan amount based on the
percentage of units affordable at 80 percent of AMI or below in standard renter
markets, 100 percent of AMI or below in cost-burdened renter markets, and 120
percent of AMI or below in very cost-burdened renter markets.
6.   Manufactured housing community blanket loans
Loans to manufactured housing communities are blanket loans secured by the land
and the rental pads. FHFA will classify as mission-driven the share of the loan
amount of a manufactured housing community blanket loan that reflects the share
of units that receives credit under the Duty to Serve regulation.
FHFA strongly encourages the adoption of tenant pad lease protections that meet
or exceed those listed in the Duty to Serve regulation in all manufactured
housing communities.



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7.   Loans on seniors housing assisted living properties
For loans on seniors housing assisted living properties, FHFA will classify as
mission-driven, the pro rata portion of the loan amount based on the percentage
of units affordable at 80 percent of AMI or below.
8.   Loans to finance energy or water efficiency improvements
Loans to finance energy or water efficiency improvements are loans funded by
Freddie Mac under its own specialized financing programs for this purpose. For
loans under the Freddie Mac Green Up and Green Up Plus loan programs, 50 percent
of the loan amount will be classified as mission-driven if at least 20 percent
but less than 50 percent of the unit rents are affordable at or below 60 percent
of AMI, and 100 percent of the loan amount if the percentage of affordable units
is equal to or more than 50 percent.
The renovations under the program (including subsequent program enhancements, as
approved by FHFA) must project a minimum 15 percent reduction in annual whole
property energy consumption and a minimum 15 percent reduction in annual whole
property water and/or energy consumption. (Thus, a property projecting 30
percent energy consumption reduction would qualify for mission-driven credit, as
would a property projecting 15 percent energy and 15 percent water consumption
reduction, or 20 percent energy and 10 percent water consumption reduction.)
In addition, prior to Freddie Mac purchase, all Freddie Mac Green Up and Green
Up Plus transactions must have a third-party data collection firm engaged for
ongoing data collection for the life of the loan, in order to receive
mission-driven credit. This third-party firm can be funded by the borrower, the
lender, or Freddie Mac. FHFA will require specific data elements on all
transactions where energy or water efficiency improvements are made for Freddie
Mac to determine the effectiveness of the programs in achieving policy outcomes,
on an annual basis.
For loans funded under the Freddie Mac Green Certified program, FHFA will
classify as mission-driven 50 percent of the loan amount if at least 20 percent
but less than 50 percent of the unit rents are affordable at or below 60 percent
of AMI, and classify 100 percent of the loan amount if the percentage of
affordable units is equal to or more than 50 percent.
9.   Other Scorecard requirements
For purposes of reporting on loan and commitment activity under the 2022 caps,
Freddie Mac must: a) use the definitions for determining unit affordability of
seniors housing assisted living units, coop units, and shared living
arrangements, including student housing, that are included in the housing goals
regulation at 12 CFR 1282.1; b) use affordability data as of the loan
acquisition date; c) report monthly to FHFA on their acquisition and commitment
volumes using a reporting format defined by FHFA; and d) report quarterly on
their acquisition volumes under the caps including detail on mission-driven loan
purchases using a reporting format to be determined by FHFA.

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Freddie Mac Forme 8-K

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