Government-sponsored enterprises
The inclusion of the information results from investor feedback, while also underscoring efforts at both GSEs to develop more responsible business practices through
"Investors are eager to know whether their investments in Freddie Mac MBS pools are supporting minority borrowers, first-time homebuyers, low-income buyers and low-income neighborhoods," said Mark Hanson, senior vice president for securitization at the McLean, Virginia-based GSE, about the incentive to create a score index.
Its social criteria share indicates the portion of loans in a pool with any of eight different attributes, which also include minority tract, high-needs rural, designated disaster area or manufactured housing, according to Freddie Mac. The social density score assigns a value to loans based on the criteria satisfied.
"We view the index as a good step in the evolution of social MBS issuance, and look forward to working with the market to drive further developments," Hanson said in a press release.
Scores will be assigned to all active, inactive and paid MBS pools formed since early 2010, according to both GSEs. Beginning on Dec. 2, they will disclose scores of new pools at the time of issuance. Historical data for previous issuances will also be released by Freddie Mac on that date, while Fannie Mae published its scores for past pools this week.
"We're excited to release the new social disclosures after receiving positive feedback on the proposal over the last several months," said Devang Doshi, senior vice president of single-family capital markets at Fannie Mae, in a press release.
The latest announcements come as both Fannie Mae and Freddie Mac have made concerted efforts to address ESG issues over the past few years. Both companies introduced new
In 2020, Fannie Mae introduced
Fannie Mae's