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NAFCU's Ann Kossachev on Monday asked that the Federal Housing Finance Agency "diligently evaluate" the chattel loan market before it requires Fannie Mae and Freddie Mac to decide whether to pursue a pilot program and that it be transparent in implementing such a program.

In January, the FHFA asked for input on its chattel loan pilot initiative for the government-sponsored enterprises under its final duty-to-serve rule. In a win for NAFCU and its members, this final rule counts chattel loans secured by personal property as an eligible activity toward the now-required service to manufactured housing, affordable housing preservation and rural housing markets.

"Overall, NAFCU supports the steps the Federal Housing Finance Agency has taken to increase the liquidity of the mortgage market and improve the distribution of investment capital available to very low-, low-, and moderate-income families," Kossachev, NAFCU's regulatory affairs counsel, wrote in a comment letter Monday. "Nonetheless, NAFCU's members have expressed concerns regarding the entrance of Fannie and Freddie into the chattel loan market given the history of manufactured housing loans in the secondary market."

Kossachev noted that in 2015, about 18 million Americans lived in manufactured homes and that 80 percent of new manufactured homes in that year were titled as chattel. She wrote that NAFCU is pleased the FHFA has recognized the importance of providing duty-to-serve credits for chattel loans but that the GSEs "must tread carefully."

"NAFCU's members are also uncertain whether Fannie and Freddie are presently capable of recognizing and fully understanding the intricacies that credit unions face when serving manufactured housing portfolios," she wrote.

"A slower process for the chattel loans pilot program will likely lead to a more streamlined and unimpaired implementation," she added.

Kossachev also recommended that the GSEs set a strict limit on the volume of chattel loan purchases for the initial phase of the pilot program. She added that NAFCU would like to see more research from the GSEs regarding the chattel loan market and an extended timeline for the GSEs to pursue such a pilot program.