The U.S. Department of Housing and Urban Development (HUD) has established housing goals for the Federal National Mortgage Association and Federal Home Loan Mortgage Corp. that will require the two secondary market giants to devote specified percentages of their business to low- and moderate-income housing, affordable housing and underserved areas.

Congress directed HUD to set goals in the 1992 housing act, which revised the regulatory framework for Fannie Mae and Freddie Mac.

Under the regulations, at least 40% of the units financed by each corporation's mortgage purchases in 1996 must be low- and moderate-income housing. This goal rises to 42% annually for 1997-99. HUD will set new annual goals to begin in the year 2000, leaving the 42% minimum in effect until the goals are set.

For central cities, rural areas and other underserved areas, the goals are 21% for 1996 and 24% for 1997-99. Again, the 24% goal will remain in effect until HUD sets new goals for 2000 and beyond.

An underserved rural area is defined as a county with a median income and a minority population of at least 30% or a median income at or below 95% of the greater state or national non-metro median. In New England, the non-metro portion of a mixed metro/nonmetro county will be considered underserved d it meets the 95% of median income test.

In central cities and other non-rural areas, an underserved area is a census tract with a median income at or below 120% of the metro area median and a minority population of at least 30% or a median income at or below 90% of the metro area median.

The regulations also included special affordable goals to increase the availability of owner-occupied and rental housing for low-income families in low-income areas and for very low-income families.

The percentage goals for affordable housing are 12% in 1996 and 14% in 1997-99, and each corporation's multifamily mortgage purchase activity must be at least 0.8% of its 1994 mortgage purchase volume. For Fannie Mae, that means a multifamily financing level of at least $1.3 billion, and for Freddie Mac, at least $980 million.

In determining whether rental units qualify for the low- and moderate-income or special affordable housing goals, the income of actual or prospective tenants will be used when that information is available. Otherwise, a unit will qualify if its rent doesn't exceed 30% of the income limit for the particular income category.

Where the family size and income of actual or prospective tenants are known, the moderate-income limit for rental units will range from 70% of area median income for a single person to 100% of median income for a family of four, with an additional 8% of median for each additional family member.

For low-income, the income limits range from 56% of median for one person to 80% for a family of four, with an additional 6.4% for each family member over four. For very low-income, the range is 42% to 60%, plus 4.8%.

When family size isn't known, income limits will be tied to unit size. For moderate-income, the range is 70% of area median for an efficiency to 104% for three bedrooms, plus 12% for each additional bedroom. The comparable figures for low-income are 56% to 83.2%, plus 9.6%, and 42% to 62.4%, plus 7.2%.

When tenant income isn't known, the percentage of median income limits for rents will be as follows: moderate income, 21% for an efficiency to 31.2% for three bedrooms, plus 3.6% for each additional bedroom; low-income, 16.8% to 24.96%, plus 2.88%; and very low-income, 12.6% to 18.72%, plus 2.16%.