FHFA, Treasury suspend some provisions for Fannie, Freddie preferred stock purchase agreements

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The Federal Housing Finance Agency (FHFA) and the U.S. Department of the Treasury have suspended certain provisions that had been added to the Preferred Stock Purchase Agreements with Fannie Mae and Freddie Mac on Jan. 14, 2021.

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The suspended provisions include limits on Fannie Mae and Freddie Mac’s cash windows, multifamily lending, loans with higher risk characteristics, and second homes and investment properties. The two enterprises will continue to build capital under the continuing provisions of the Preferred Stock Purchase Agreements, or PSPAs.

Further, the FHFA will continue to direct the enterprises to operate in a safe and sound manner consistent with their statutory mission. They will also continue to direct them to foster resilient housing finance markets given prevailing housing market conditions, which include elevated demand relative to available inventory.

The FHFA will consult with the Treasury Department on the scope of the review and on any recommended revisions to the PSPA requirements.

“This suspension will provide FHFA time to review the extent to which these requirements are redundant or inconsistent with existing FHFA standards, policies, and directives that mandate sustainable lending standards,” Acting Director Sandra Thompson said.

In addition, the FHFA is reviewing the Enterprise Regulatory Capital Framework and expects to announce further action in the near future.

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