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Duty to Serve

Colonias Investment Areas Research

Expanding Access to New Housing Opportunities in the Colonias

When the U.S. Federal Housing (FHFA) issued the Duty to Serve Underserved Markets rule, it identified the colonias — historically defined as underdeveloped communities along the U.S.-Mexico border lacking basic infrastructure — as one of three High-Needs Rural Regions for targeted support by Fannie Mae and Freddie Mac.

We’ve engaged with experts and stakeholders to study the region, speak to people on the ground, and understand the challenges lenders and borrowers face in building homeownership there.

See if there are Colonias Investment Areas in the markets you serve

What we learned

Through research and direct engagement with industry stakeholders, we’ve come across a range of insights that have informed our activities in the region and will continue to do so going forward.

CDFIs are critical

Community development financial institutions (CDFIs) are an important resource in building homeownership.

Colonias are unique among rural regions

Unlike other rural regions, some colonias census tracts are located in urban and suburban areas.

Poverty is a major barrier to homeownership

The aggregate Colonias Investment Area poverty rate is nearly twice that of the U.S. as a whole. They experience some of the greatest challenges and needs of any region in the country.

Government loans are prevalent

Stakeholders emphasized the high proportion of borrowers in this geography being approved for government products, such as USDA 502 Direct and FHA loans.

Colonias face many of the same challenges as other rural regions

Lenders shared market challenges, such as low housing supply, high interest rates, and the need for low balance lending.

Identify properties in the colonias

Our interactive map identifies high-needs rural regions, like Colonias Investment Areas, where lenders can support homeownership and find properties that may be eligible for Duty to Serve-related loan-level pricing adjustment waivers.

Explore map 

Colonias Map

Seizing opportunity in the Colonias Investment Areas

The Colonias Investment Areas face a number of challenges but also represent an opportunity for lenders to leverage tools that can help them grow their borrower pools:

Offer affordable financing

From 3% down mortgages to manufactured home and renovation financing, find conventional mortgages that can support your work in Colonias Investment Areas.

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Educate borrowers

Fannie Mae HomeView® and HomeView en Español help borrowers prepare for homeownership, from building their credit to maintaining their new home.

Learn more 

See how we helped define the Colonias Investment Areas

Our research was foundational in identifying and formally defining the Colonias Investment Areas.

Read the report 

 

Proud to partner with HAC

Fannie Mae is pleased to have partnered with the Housing Assistance Council (HAC) to address the need for a greater understanding of the colonias region. Working together, we hope to increase investment in and access to affordable housing in this underserved market.