Fannie Mae Announces Single-Family Social Bond Framework

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Jan 23, 2024, 10:00 ET

New Mission-Centered MBS and Retooled Disclosures to Support Affordable Housing

WASHINGTON, Jan. 23, 2024 /PRNewswire/ -- Fannie Mae (OTCQB: FNMA) today announced the launch of its Single-Family Social Bond Framework and updates to disclosures for the company's Single-Family mortgage-backed securities (MBS), aimed to further support access to credit and affordable housing as part of its mission and goals.

The updated Social Bond Framework describes the Fannie Mae mortgage collateral eligible to be pooled, issued, and labeled as Single-Family "Social MBS." The MBS that receive the Social label will be based on certain scores using an updated version of the current Social Index disclosure used by Fannie Mae and Freddie Mac (the Enterprises).

The Enterprises will rebrand the Social Index as the "Mission Index" and update its formulation as further described in the Framework. The Mission Index will begin to apply to pools issued by Fannie Mae beginning in March 2024 and for Freddie Mac beginning in June 2024. The Enterprises expect to assign the Social label to Single-Family MBS meeting the Social Bond criteria beginning in June 2024. Fannie Mae plans to provide impact reporting annually beginning in 2025, which will help the market understand the associated impact of the loans underlying their investments.

"Fannie Mae is continuously working to identify new and better ways to draw capital to markets that tie directly to our mission. While supporting mortgage lenders and investors, we also are committed to addressing the many housing challenges facing consumers – including those that disproportionately burden lower- and moderate-income borrowers and renters," said Devang Doshi, Fannie Mae Senior Vice President, Capital Markets. "By providing investors with greater insight into the mission-oriented lending activities underlying our mortgage-backed securities through our Mission Index disclosures, more capital may be allocated in support of affordable housing so that over time more people have better access to credit."

The Fannie Mae Single-Family Social Bond Framework is being rolled out in alignment with Freddie Mac and in cooperation with the Federal Housing Finance Agency (FHFA). Fannie Mae obtained a second party opinion from the ratings and data firm Sustainalytics. This opinion letter acknowledges that the Social Bond Framework is credible and impactful, and aligns with the four core components of the International Capital Market Association's Social Bond Principles 2023.

Information on the Social Bond Framework and Mission Index can be found on Fannie Mae's website and via our Perspectives blog: "Mission in Focus: Enhanced Disclosures Lay the Groundwork for Single-Family Social MBS."

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SOURCE Fannie Mae