dhollier@imfpubs.com

The Federal Housing Finance Agency issued a proposal Wednesday to replace its regulation on duty to serve underserved markets. The goal, according to FHFA, is to better serve low-income families “through greater innovation and with less administrative burden.”

The proposed rule is designed, in part, to comply with President Trump’s Executive Order 14394, which directs FHFA to “consider eliminating burdensome rules and reforming programs that constrain residential development…” The EO specifically mentions the DTS regulation regarding chattel loans for manufactured housing.

FHFA’s proposal notes that, by basing the definitions of low income on area median income, the current rule may exclude loans to families with incomes below national market levels. FHFA proposed redefining “high-needs rural populations,” which currently targets Indian tribes on tribal land as well as agricultural workers.

The agency said this would “remove administrative hurdles to serving those populations and other residents in rural areas at the targeted income level.”

The proposal includes numerous other changes to the DTS regulation. Comments are due Aug. 6.