Attachment A - Statement of Work.pdf

Statement of Work

Multifamily Data

I. Background

The Office of Capital Policy (OCAP) of the Federal Housing Finance Agency (FHFA) is tasked with preparing recurring credit risk reports and projections on the performance of Fannie Mae’s and Freddie Mac’s (the Enterprises’) multifamily portfolios. OCAP’s reports provide information to FHFA multifamily policy stakeholders on historical trends of rents, apartment inventory, vacancy rates, construction pipeline, property values, and capitalization rates. OCAP also uses statistical techniques to quantify portfolio credit risk and prepare financial analyses supporting FHFA policy. In order to quantify credit risk under different economic scenarios (baseline, downturn and upturn economic conditions), OCAP builds statistical models using historical market-level measures of gross rental growth, net operating income growth, vacancy rates, property value growth and capitalization rates. OCAP then uses these models with forecasts of the same series to generate forecasts of portfolio default rates, losses, and other portfolio performance measures.

II. Scope

To fulfill its mission, OCAP needs historical and forecasted data on economic measures of multifamily markets. Historical data is used to generate reports on market status and trends, as well as for developing multifamily statistical models sensitive to economic and financial conditions. Reports on market status and trends allow OCAP to monitor market conditions and make decisions to mitigate Enterprise credit risk. OCAP uses forecasts of multifamily market data under different economic scenarios as inputs to statistical models to quantify the credit risk of the GSEs multifamily portfolios.

Both tools allow FHFA to efficiently monitor Enterprise performance to maintain a safe and sound secondary mortgage market.

OCAP also needs access to commentary on current and developing economic conditions at national level and for specific markets. OCAP needs access to such data and commentary (referred to as data from this point on) reliably and regularly at least once a quarter. It is preferable to choose a vendor who can provide the service for the foreseeable future to ensure use with the statistical models. Data that is representative of the markets where the Enterprises conduct their business is preferred.

III. Requirements

OCAP needs historical data and forecasts of multifamily market measures for a broad geographical area to generate reports, develop and use statistical models. The data should cover at least one complete business cycle of economic downturn, recovery, and expansion.

Dataset requirements:

• Economic measures. The data should cover, at a minimum, the following economic measures:

Economic Measure Forecast

Period (Years)

Multifamily Units: stock, completions, and net absorption 10 Multifamily Units stock by asset class 0 Vacancy rate 10 Vacancy Rate by number of bedrooms, building age, asset class 0 Rent per Unit (same-store index) 10 Rent per Unit, by number of bedrooms, building age, asset class 0 Rent per Square Foot 0 Net Operating Income (nominal for standardized property and same-store index)

Capitalization rate 10 Property Value (nominal for standardized property and same-store index) 10 Investment Return (by components: cash flow and appreciation) 10 Multifamily property transaction data: transaction value, number of properties, number of units, implied capitalization rates

• Market Commentary. The data should be accompanied by commentary on market status and trends. Commentary may be written or oral.

• Broad Geographic Coverage. The data should have broad coverage across the country, preferably covering all Metropolitan Statistical Areas (MSAs) where the collateral that guarantees the GSEs multifamily loans is located. The highest level of geographical aggregation accepted is MSA. Individual time series should be available for at least 50 markets, the more the better (conditional on a sufficiently large sample size). The metropolitan market areas must include properties located in at least three quarters of the largest metro areas (by population) in the country. For at least some of the metropolitan areas, data series must be available for smaller aggregations than MSAs.

• Sampling. Assuming a survey method was used to derive the rent data, the source of the data should cover greater than 10 percent of the sampling universe of units.

• Long Time Coverage. The time series should cover at least the period between early 1990s and today, continuously, including at least one complete business cycle (economic downturn, recovery, and expansion).

• Scenario-dependent Forecasts. Each series must come with forecasts for periods mentioned above (starting with the most recent quarter/month), for at least 3 scenarios: baseline, downturn, and upside. The baseline and downturn scenarios should follow as closely as possible the Comprehensive Capital Analysis and Review (CCAR) baseline and severely adverse scenarios published by the Federal Reserve Board (FRB), for the periods they overlap. Forecasts must be updated on each delivery date to reflect the historical data up to the end of the most recent quarter/month.

• High Frequency. Data should be measured with a quarterly frequency or higher and the dataset should be updated with the same frequency. Monthly frequency would be preferred as it offers more accuracy, but it is rarely available in commercial real estate since most business reporting is quarterly (e.g., property operating statements).

• Multiple Unit Types. Broad coverage of types of housing unit/property is necessary to give an accurate picture of the market status. Historical data should be available by class of property.

IV. Deliverables

The Contractor shall supply the dataset and regular updates, and answer questions as needed throughout the life of the contract.

Within 5 days of contract award, the provider shall provide access to:

• Data files containing the licensed dataset.

• Data dictionaries for the data fields provided.

• Market commentary reports.

On a quarterly/monthly basis during the contract period, the Contractor must provide quarterly/monthly updates to FHFA using the data format the historical data file was provided in.

Provider shall supply the data in electronic files with delimited text (CSV, TXT) or Microsoft Excel format through a secure HTTP website. Written market commentary will be delivered as electronic files (.pdf or .doc format) while oral commentary may be delivered as online webinars or recordings.

On ad hoc basis, Contractor experts shall answer FHFA’s data-related questions. Such answers shall be provided within three (3) business days.

Any data-related problems (e.g., inconsistent formatting, corrupt files, etc.) must be resolved within five

(5) business days.

V. License Agreement Requirements

The terms of the license under which the data will be used must permit:

• Use of the data for this study and for general research into housing and rental market conditions; and

• Publication of research findings and aggregated statistics computed from the licensed dataset. FHFA does not seek to re-publish the raw (un-aggregated) licensed data and thus will agree to related confidentiality provisions.

Additionally:

1. At the termination or expiration of the license agreement, FHFA shall have the right to maintain and use indefinitely print or electronic copies of its reports, presentations, or other content created in accordance with the license agreement.

2. Data will be made available to an unlimited but reasonable number of users. Authorized Users may be from multiple divisions across FHFA and may concurrently access and use the data from their official duty stations or via remote access when such Users are conducting business for the benefit of FHFA.

3. FHFA does not permit compliance audits; however, the license agreement may require that FHFA will provide written assurance of its compliance or other alternative agreed to in writing by the Contracting Officer.

4. The license agreement shall not include an indemnification of the contractor by the FHFA.

5. The license agreement shall be governed by, and construed in accordance with, the federal laws of the United States of America.

6. The Contractor shall represent and warrant that it makes commercially reasonable efforts to ensure that the software, data, or product as applicable is free of any viruses, worms, Trojan horses, malware, and/or other malicious code.

7. The license agreement shall not include terms that authorize assignment of the contract except in accordance with Federal Acquisition Regulation Subpart 42.12.

8. Contractor shall acknowledge and agree that if there is a conflict between the terms and conditions of the license agreement and those of the contract, the contract governs.

9. The license agreement shall permit FHFA to use the historical data and forecasts of multifamily market measures for official Government purposes, including but not limited to reports, presentations, graphs, public releases, other publications, and examination of the regulated entities.

10. The license agreement may acknowledge that FHFA is a federal government agency and is exempt, by law, from the payment and collection of sales taxes.

VI. Information Technology (IT) Accessibility Requirements (Section 508)

Section 508 of the Rehabilitation Act, as amended by the Workforce Investment Act of 1998 (P.L. 105-

220) requires that when Federal agencies develop, procure, maintain, or use information and communication technology (ICT), it shall be accessible to people with disabilities. Federal employees and members of the public who have disabilities must have access to, and use of, information and data that is comparable to people without disabilities.

1) Products, platforms and services delivered as part of this work statement that are ICT, or contain ICT, must conform to the Revised 508 Standards, which are located at 36 C.F.R. § 1194.1 & Apps. A, C & D, and available at https://www.access-board.gov/guidelines-and-standards/communications-and-it/about-the-ict-refresh/final-rule/text-of-the-standards-and-guidelines

2) E102 / 702.10 – Web Content Accessibility Guidelines (WCAG) success criteria level A & AA are incorporated as a requirement. The referenced WCAG criteria is available at http://www.w3.org/TR/WCAG20/

3) E202 – No General Exceptions Authorized by FHFA

Items that contain ICT: Market Commentary Reports

Applicable Functional Performance Criteria: All functional performance criteria apply when using an alternative design or technology that achieves substantially equivalent or greater accessibility and usability by individuals with disabilities than would be provided by conformance to one or more of the requirements in Chapters 4-6 of the Revised 508 Standards, or when Chapters 4-6 do not address one or more functions of ICT.

Applicable requirements for Electronic Documents:

• E205 – WCAG Level A & AA Success Criteria

• E302 – Functional Performance Criteria

VII. Period of Performance

The requirements will be for one (1) base year of performance and potentially four (4) one-year option periods of performance. The anticipated start date of performance is 01 August 2024.

https://www.access-board.gov/guidelines-and-standards/communications-and-it/about-the-ict-refresh/final-rule/text-of-the-standards-and-guidelines https://www.access-board.gov/guidelines-and-standards/communications-and-it/about-the-ict-refresh/final-rule/text-of-the-standards-and-guidelines http://www.w3.org/TR/WCAG20/