(Adds background, legal requirements)
WASHINGTON, Dec 15 (Reuters) - Mortgage finance companies Fannie Mae and Freddie Mac must by law do more in underserved markets, their federal conservator said on Tuesday, unveiling a proposal that would have them help finance manufactured homes, support affordable housing and strengthen lending in rural areas.
Federal statute requires Fannie Mae and Freddie Mac to help facilitate such lending, according to the Federal Housing Finance Agency, which has acted as conservator to the two mortgage purchasers since they were bailed out during the financial crisis.
The agency originally proposed a rule to reach underserved markets in 2010. It received more than 4,000 comments, which helped create the approach in Tuesday's proposal.
Under the proposal, the FHFA would score the companies for performance in underserved markets and report its findings to Congress.
For example, the companies could receive a credit for treating the financing of manufactured houses as real estate loans, instead of personal property financing known as "chattel loans." Such a change would allow borrowers to take out mortgages with greater protections and lower default rates, according to the proposal, the FHFA said.
The companies could also create plans to preserve affordable housing for renters and owners. They would include purchasing loan pools on small multifamily rental properties and energy retrofit loans on single-family properties.
For rural areas, the FHFA is considering expanding lending by modifying underwriting guidelines, increasing rural loan purchases and providing technical assistance to small lenders working in the areas.
(Reporting by Lisa Lambert; Editing by Steve Orlofsky and Dan Grebler)