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Climate Risk Scorecard

Assessment Key
Significant ProgressSignificant Progress
Some ProgressSome Progress
No ProgressNo Progress
Not ApplicableNot Applicable
About the About the FHFA

The Federal Housing Finance Agency (FHFA) is responsible for supervising and regulating the housing mission of Fannie Mae and Freddie Mac (GSEs), as well as the Federal Home Loan Banks. The FHFA was created upon recognition that the previous regulatory structure was not adequate to address the risks posed by the GSEs, a situation exposed by the global financial crisis and subprime mortgage securities meltdown of 2008.   

The Federal Home Loan Banks (FHLBanks) are 11 regional suppliers of lendable funds to financial institutions of all sizes and many types, including community banks, credit unions, commercial and savings banks, insurance companies, and community development financial institutions. The FHFA is responsible for ensuring that the FHLBanks, which are cooperatively owned by member institutions, operate in a financially safe and sound manner.   

Fannie Mae and Freddie Mac were established by Congress to help ensure a reliable and affordable supply of mortgage funds throughout the country. The GSEs can also help protect housing during extraordinary periods of turmoil in the broader financial system and support mortgage lending that finances affordable housing. In 2021, Fannie Mae and Freddie Mac guaranteed approximately two-thirds of new single-family mortgage originations during the first three quarters of 2021, and more than half of single-family outstanding mortgages at the end of the first quarter in 2022.  

The GSEs are currently under conservatorship due to the substantial deterioration in the housing markets that severely damaged each GSE’s financial condition, leaving both unable to fulfill their missions without government intervention. As conservator, FHFA has broad authority over the GSEs, ensuring that they operate in a safe and sound manner through prudential supervision and regulation.    

In general, major decisions made by the GSEs are directives from FHFA. The GSE boards and management teams must consult with FHFA on GSE decision-making to obtain approval or act as directed by FHFA. Due to this unique oversight relationship, Ceres will be evaluating GSE actions as FHFA actions. There might be actions or communications in progress from FHFA to the GSEs that have not been published or implemented yet, which due to their confidentiality nature, will not be considered in this assessment.  

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