The public comment period for the Federal Housing Finance Agency’s proposed housing goals for its regulated entities Fannie Mae and Freddie Mac ended on Monday, with decidedly mixed feedback from several prominent industry trade groups.

The FHFA is required to establish annual benchmarks for mortgages the government-sponsored enterprises (GSEs) purchase, as it aligns with their legal obligation to safely, soundly and profitably facilitate affordable housing for low- and moderate-income consumers.

The proposed goals for 2026 to 2028, filed in the Federal Register on Oct. 2, narrow Fannie and Freddie’s affordable housing activities by streamlining prior single-family affordable housing goals and lowering target benchmarks in key lending categories.

The FHFA proposed these adjustments in response to what it called “overly aggressive housing goals” that it believes the market cannot support due to ineffective direct government subsidies. The proposal cited the middle class as disproportionately impacted by past benchmarks in low-income and very low-income mortgage purchases.

Several mortgage industry groups generally applauded the adjustments. But some consumer advocacy groups and affordable housing organizations — 28 of which jointly signed a letter sponsored by the Consumer Federation of America (CFA) — eviscerated the FHFA for the changes.

“The undersigned organizations express deep concern that FHFA’s proposed 2026-2028 Enterprise Housing Goals will take away affordable mortgages for up to 177,000 lower- to moderate-income families over the next three years,” the CFA letter read, citing the FHFA’s regulatory impact analysis that accompanied the proposed changes.

The FHFA’s proposed goals lowered its single-family low-income and very low-income purchase targets from 25% to 21% and 6.5% to 3%, respectively, while merging low-income census tract and minority census tract subgoals into a single low-income areas subgoal.

By making these changes, “the FHFA is actively taking steps to make it harder, not easier, for Americans to buy homes anytime soon,” read comments submitted by the Center for Responsible Lending, a national policy group that promotes consumer financial education.

Affordability challenges

Persistent affordability challenges have sidelined lower- and moderate-income homebuyers across the U.S. in recent years, in particular first-time homebuyers.

Mortgage rates in October were roughly double pandemic-era lows. Median U.S. home prices currently exceed $400,000, and the median U.S. home sale price in the second quarter of 2025 was $411,000 compared to $323,000 in the second quarter of 2019, according to the Federal Reserve Bank of St. Louis.

Since early 2020, the average principal payment on a mortgaged single-family home has increased 23%, compared to a 27% rise in interest, 70% rise in property insurance costs and 27% rise in property taxes, ICE Mortgage Technology reported in September.

Edward DeMarco, former acting director of the FHFA from 2009 to 2014 and president of the Housing Policy Council (HPC) since 2017, highlighted legislative suggestions supported by the HPC that represent “a more complete rethinking of the statutory construct for using the GSEs to accomplish public policy goals aimed at affordable homeownership.”

“HPC supports FHFA’s proposed interim step to adjust the Housing Goals targets, to address ongoing market distortions,” DeMarco wrote, citing how cross-subsidized pricing models and fee structures have increased competition among lenders and aggregators, amplifying the affordability crisis.

“The net effect is that the subsidies do not benefit homebuyers, but in fact, harm them,” he added.

The “crowding out” argument espoused by the FHFA and DeMarco was rejected by the National Community Reinvestment Coalition (NCRC) in its comment letter. The group wrote that the theory assumes that demand for mortgages among low- and moderate-income borrowers is finite.

“The theme of ruinous competition is an oxymoron,” the NCRC stated. “The market data also does not suggest that price competition has reduced safety and soundness or capital reserves.”

Measurement buffers

The FHFA also proposed the elimination of “measurement buffers” that enable Fannie and Freddie to align purchases with market levels of production in goal eligible originations, providing flexibility should the benchmark target be rendered too lofty.

In its comment letter, the Mortgage Bankers Association (MBA) noted that the lowered targets for single-family low-income and very low-income purchases were set “at the lower end of the expected forecast range,” and advised maintaining the measurement buffers “to mitigate market distortions” should the lowered benchmarks be rendered too low.

“While the lowering of these targets is intended to eliminate harmful market distortions and unintended incentives, MBA encourages FHFA to actively monitor these levels to ensure they continue to support the Enterprises’ affordable housing mission,” the letter stated. MBA asked FHFA to lower the unchanged single-family low-income refinance goal.

U.S. Mortgage Insurers (USMI) represents private mortgage insurance providers used by lenders and investors, including Fannie and Freddie, to backstop losses on low downpayment conventional loans. It generally supported the FHFA’s housing goals and reasoning.

“The Proposed Rule appropriately balances the housing goals with reducing regulatory burdens and complexity,” read USMI’s letter. “Setting the housing goals at the proposed thresholds has merit, especially given the current challenges facing homeownership in the U.S. are primarily driven by supply, as opposed to driven by demand.”