February 25, 2022

FHFA: Final Rule Amending the Enterprise Regulatory Capital Framework Announced

Amendments to the capital framework for Fannie Mae and Freddie Mac refine the leverage buffer and risk-based capital treatment of Credit Risk Transfer

The Federal Housing Finance Agency (FHFA) today published a final rule that amends the Enterprise Regulatory Capital Framework (ERCF) by refining the prescribed leverage buffer amount (leverage buffer) and risk-based capital treatment of retained credit risk transfer (CRT) exposures for Fannie Mae and Freddie Mac (the Enterprises).

Specifically, the final rule will:

“The amendments finalized today reflect the feedback FHFA received last year and advance FHFA’s mission of ensuring the Enterprises are able to support the housing market throughout the economic cycle,” said Acting Director Sandra L. Thompson. “The final rule provides the Enterprises with the necessary incentives to transfer credit risk to private investors, which will help protect taxpayers from the risks posed by the Enterprises and will support the Enterprises as they strive to provide equitable and sustainable access to mortgage credit.”

The final rule also makes technical corrections to various provisions of the ERCF that was published on December 17, 2020. The effective date for the ERCF amendments and technical corrections in this final rule will be 60 days after the day of publication in the Federal Register. 

Final Rule

Final Rule Fact Sheet

Enterprise Regulatory Capital Framework CRT Tool

This post was originally published here.