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75 November 2025 J O U R N A L themortgagepoint.com November 2025 » efficient management of U.S. federal housing operations are among the goals laid out by the Federal Housing Finance Agency in its new five-year strategic plan for U.S. housing. To ensure the safety and soundness of the GSEs, FHFA will conduct risk-fo- cused supervision and examination work, including: • Ensuring regulated entity compli- ance with applicable laws and reg- ulations and adherence to financial standards; • Developing and administering su- pervisory tests, as appropriate; • Monitoring emerging risks, industry trends, supervisory standards, and macroeconomic market conditions to inform risk assessments and ad- just supervisory approaches, when appropriate Management of the GSEs will include: • Communication of annual objec- tives, expectations, and priorities to the boards and management • Monitoring of boards and board-lev- el committees • Assessment of performance against FHFA priorities and objectives Also critical in the responsible over- sight of the GSEs will be identifying and combating fraud and misconduct and reducing unnecessary regulatory bur- dens, the proposed strategic plan said. Ensuring Safety and Soundness Many of the safety and soundness guidelines overlap those of responsible oversight, with risk-based supervision and combating fraud two of the main objectives. Other safety and soundness objectives include ensuring that the FHLBanks fulfill their statutory respon- sibilities and encouraging efforts to expand housing supply to meet national demand. To efficiently manage operations, FHFA plans to: • Develop and strengthen internal con- trols and risk management to ensure compliance and sound operational resilience; • Produce financial statements that demonstrate a commitment to com- pliance, transparency, and account- ability; • Execute an employee performance management system that drives a high-performance, high-accountabil- ity culture; • Comply with Executive Orders and other related guidance promoting accountability, cost effectiveness, and operational efficiency. "This focus on 'efficiency' could be a very positive for multi-family projects," said Rick Porras, CFO of Neology Group, a Miami, FL-based real estate devel- opment firm. "Currently, timelines for having projects approved and funded can take upwards of nine months from the start of the application process to final approval. Traditional lenders can do the entire process in as little as two months. Many developers simply do not have the time to invest in this long process. Aside from the extended timeline, receiving approval could even delay the project's ground-breaking, which would be a deal breaker for most developers." POWELL: FED COULD SOON SLOW BALANCE SHEET RUNOFF F ederal Reserve Chair Jerome Powell told the National Asso- ciation for Business Economics conference in Philadelphia that the Fed is getting closer to reducing the more than $6 trillion of securities it holds on its balance sheet. "Our long-stated plan is to stop balance sheet runoff when reserves are somewhat above the level we judge consistent with ample reserve condition," Powell said. 'We may approach that point in coming months, and we are closely monitoring a wide range of indicators to inform this decision.' Shifting Market Conditions? Some signs have begun to emerge that liquidity conditions are gradually tightening, including a general firming of repo rates along with more noticeable but temporary pressures on selected dates, Powell added. "The Committee's plans lay out a deliberately cautious approach to avoid the kind of money market strains experienced in September 2019. More- over, the tools of our implementation framework, including the standing repo facility and the discount window, will help contain funding pressures and keep the federal funds rate within our target range through this transition to lower reserve levels." However, normalizing the size of the balance sheet doesn't mean the Fed will be looking to return to pre-pandemic levels, according to Powell. "In the longer run, the size of our bal- ance sheet is determined by the public's demand for our liabilities rather than our pandemic-related asset purchases. Non-reserve liabilities currently stand about $1.1 trillion higher than just prior to the pandemic, thus requiring that our securities holdings be equally higher. Demand for reserves has risen as well, in part reflecting the growth of the banking system and the overall economy." Powell was mum on the issue of interest rates. The next U.S. Federal Reserve interest rate meeting will be held on October 28–29. The CME FedWatch Tool predicts the rate will be cut 25 basis points at the meeting, with another, similar cut expect- ed in December.