Mission Index Focuses Help Where It’s Needed

Single-Family Business

Helping lenders serve homebuyers and homeowners with affordable mortgages

Multifamily Business

Financing for quality, affordable rental housing in every market, every day

Capital Markets

Reducing risk and enhancing housing finance liquidity

Manage Financial Uncertainty

All Resources to Manage Financial Uncertainty

Help for Homeowners

Help for Renters

Protect Yourself from Fraud

Recover from a Disaster

All Resources for Recovering from a Disaster

Recovery Assistance for Homeowners

Recovery Assistance for Renters

Protect Yourself from Fraud

Fannie Mae's and Freddie Mac's (the Enterprises) Mission Index disclosures provide insights into mission-oriented lending activities underlying our Single-Family mortgage-backed securities (MBS) - helping meet specific portfolio needs and informing investment strategy. The disclosure was designed in response to investors' increased interest in allocating capital to support affordable housing and provide access to credit for underserved borrowers and markets. Since the first version of the Mission Index was introduced two years ago, it has evolved based on investor feedback and is now the foundation of the Enterprises' Single-Family Social Bond programs. We've also introduced a new disclosure supplement, the Mission Index Criteria Attribution (MICA), to further support investors in their impact analysis.

Our Mission Through Disclosures

The Enterprises support liquidity, stability, and affordability in the U.S. housing finance market. We work especially hard to ensure that includes support for mortgage credit to moderate- and low-income families and underserved areas. The Mission Index helps to highlight these activities. In summary, it's a disclosure designed as two aggregate measures per MBS pool. The first measure helps investors understand how many loans in a pool finance a property to borrowers meeting certain income, borrower, and property dimensions. The second measure illustrates how many of those loans meet multiple mission criteria. These measures are aggregated by design to minimize disruption to Uniform Mortgage-Backed Securities (UMBS) in the "to be announced" (TBA) market and to deliver transparency to investors while protecting borrower privacy.

Market Reception

The Mission Index has been well received by both impact-focused investors and by value-focused investors. That is because, in addition to providing more information on the social characteristics of the borrowers underlying a pool, many of the criteria that comprise the Mission Index are historically correlated with slower prepayments, or call protection. As a result, both impact and non-impact investors alike have expressed interest in these new disclosures. Some of this interest has been expressed through pay-ups, meaning investors find value in MBS pools with high Mission Index scores and are willing to pay more for them than the typical TBA security. This demand, and the pay-ups received by lenders who originate these loans, are designed to help incentivize more mission-oriented mortgage financing.

Single-Family Social Bonds

Our Single-Family Social Bonds, or MBS, launched in the first half of this year, are designed to satisfy international standards and are bolstered by independent second party opinions. And the Mission Index is the foundation of the program. MBS pools with 100% of their loans having at least one mission-focused attribute and an average of at least two of the three high-level attributes (i.e., income, borrower, or property) per loan now receive a Social Bond label. When the Enterprises pool whole loans purchased from lenders that meet the criteria for our Single-Family Social Bond labels into an MBS and sell that MBS with a pay-up, the programs are designed to support more mission lending. Specifically, the Enterprises plan to allocate incremental funds they receive from pay-ups for Single-Family Social MBS to incent lenders to prioritize these types of loans, while any surplus revenue are expected to support mission lending programs, such as our Duty to Serve plans.

Bolstering Impact Analysis

Recently, Fannie Mae published a MICA disclosure supplement and Freddie Mac expects to release its MICA soon. These supplements are designed with the impact-focused investor in mind and seek to help respond to more detailed questions about how an investor's portfolio supports mission lending.

The MICA provides cohort-level information about all MBS pools issued between January 2010 and February 2024 for Fannie Mae and between January 2010 and May 2024 for Freddie Mac under the original Mission Index Version 1. The MICA tells investors how common each attribute is among borrowers in securities issued by the Enterprises, with cohorts divided by issuance quarter, pool type, and the average number of mission-focused attributes for loans in the pool. This can provide valuable information about the types of borrowers receiving loans ultimately pooled into Enterprise MBS.

What's Next?

Market feedback is key to the success of our programs. We're excited to hear from investors on v1.0 of the MICA as we prepare to launch v1.1 in 2025, which will cover bonds issued under v1.1 of the Mission Index.

We're also focused on creating our first impact reports for our Single-Family Social Bond programs, helping investors to see the effectiveness of the money they are putting to work to support mission-oriented lending.

To further aid in analysis, later this quarter we plan to update the Social Indicator disclosure for Fannie Megas, Freddie Giants, and Fannie and Freddie Supers to be disclosed as Yes if all the underlying security collateral have a Social Indicator of Yes.

We look forward to continuing to use this disclosure to work with lenders and investors to serve the needs of households across the country.

Learn More

Dive into the Mission Index and new MICA Resources - including Fannie Mae's excel-based tool where investors can load their portfolios to receive an estimate of impact.

Review our Single-Family Social Bonds, including eligibility, disclosures, and expected impact reporting.

The information contained in this blog post and in the documents that may be accessed through this blog post is provided for your general information only and speaks only as of the date of those documents. Numerous assumptions were used in preparing the information, which may or may not be reflected herein. As such, no assurance can be given as to the information's accuracy, appropriateness or completeness in any particular context. The information could be out of date and no longer accurate. Freddie Mac and Fannie Mae undertake no obligation, and disclaim any duty, to update any of the information in those documents. Opinions contained in this blog post are those of Freddie Mac and Fannie Mae as of the date of this blog post and are subject to change without notice.

This is not an offer to buy or sell any Freddie Mac or Fannie Mae securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate the issuer's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC); all other reports the issuer files with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act), excluding any information "furnished" to the SEC on Form 8-K; and all documents that the issuer files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information "furnished" to the SEC on Form 8-K.

The financial and other information contained in this blog post is not incorporated by reference into, or a part of, any offering documents of any security. The information does not constitute a sufficient basis for making a decision with respect to the purchase and sale of any security and is directed only at, and is intended for distribution to and use by, qualified persons or entities in jurisdictions where such distribution and use is permitted and would not be contrary to law or regulation. All information regarding or relating to Freddie Mac or Fannie Mae securities is qualified in its entirety by the relevant offering circular and any related supplements. You should review the relevant offering circular and any related supplements before making a decision with respect to the purchase or sale of any security. In addition, before purchasing any security, please consult your legal and financial advisors for information about and analysis of the security, its risks and its suitability as an investment in your particular circumstances.

These materials may contain forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, some of which are beyond Freddie Mac's control. Freddie Mac's management's expectations for the company's future necessarily involve a number of assumptions, judgments and estimates and various factors could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements. These assumptions, judgments, estimates and factors are discussed in Freddie Mac's most recent Annual Report on Form 10-K and its reports on Form 10-Q and Form 8-K, which are available on the Investor Relations page of the company's website at http://www.freddiemac.com/investors and the SEC's website at www.sec.gov. Freddie Mac undertakes no obligation to update forward-looking statements it makes to reflect events or circumstances occurring after the date of this blog post.

This discussion contains a number of expectations, beliefs and forward-looking statements, including statements regarding Fannie Mae's business plans, strategies and activities and the impact of those plans, strategies and activities. These expectations, beliefs and other forward-looking statements are based on Fannie Mae's current assumptions regarding numerous factors and are subject to change. Actual outcomes may differ materially from those reflected in these forward-looking statements due to a variety of factors, including, but not limited to, those described in "Forward-Looking Statements" and "Risk Factors" in Fannie Mae's most recently filed Form 10-K and Form 10-Q. Any forward-looking statements made by Fannie Mae speak only as of the date on which they were made. Fannie Mae is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, subsequent events, or otherwise.

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