The Federal Housing Finance Agency (FHFA) has released Fannie Mae’s and Freddie Mac’s Equitable Housing Finance Plans for 2022-2024.
The plans are designed to complement the initiatives outlined in FHFA’s Strategic Plan: Fiscal Years 2022–2026, that promote Fannie Mae and Freddie Mac’s safety and soundness and foster housing finance markets that provide equitable access to affordable and sustainable housing.
“The Equitable Housing Finance Plans represent a commitment to sustainable approaches that will meaningfully address the racial and ethnic disparities in homeownership and wealth that have persisted for generations,” says Sandra L. Thompson, acting director of the FHFA, in a release. “We look forward to working with the enterprises, lenders, and other housing industry participants to further develop the ideas described in these plans.”
Th government-sponsored enterprises developed their respective Equitable Housing Finance Plans following the FHFA’s request for input and public listening session in September 2021.
The 2022-2024 plan activities, which will be updated annually, address barriers experienced by renters, aspiring homeowners, and current homeowners – particularly in Black and Latino communities. These activities include but are not limited to:
- Consumer education initiatives for renters and homeowners;
– Credit reporting to help tenants build credit profiles and enable better access to financial services;
– Expanding counseling services to support housing stability;
– Deploying technology to improve access to sustainable credit and fair home appraisals; and
– Special Purpose Credit Programs to address barriers to sustainable homeownership.
Additionally, the FHFA has created a pilot transparency framework for the GSEs to accompany these plans. This framework requires each GSE to publish and maintain a list of pilots and test-and-learn activities on its public website. The framework will provide accountability in determining whether such activities are working to address the disparities identified in the Equitable Housing Finance Plans.
Pilot programs and other plan activities are subject to further development and refinement by the enterprises, as well as FHFA’s review and oversight of any risks to, or impacts on, safety and soundness.
In a statement, Bob Broeksmit, CMB, president and CEO of the Mortgage Bankers Association (MBA), commended the GSEs’ “proactive efforts to develop targeted, actionable plans to close the nation’s long-standing racial homeownership gap and to make affordable rental housing available on a more equitable basis.”
“The GSEs’ plans – focused on a typical consumer’s housing lifecycle – should allow for increased opportunities for minority households to secure affordable rental housing, prepare for homeownership, and obtain access to safe and affordable mortgage credit,” Broeksmit says. “While the plans are targeted to Black and Hispanic borrowers, all low- and moderate-income borrowers and communities should benefit.
“The path to sustainable homeownership often starts with renting,” Broeksmit says. “[The] MBA appreciates the GSEs’ emphasis on enhancing existing products and developing offerings to encourage the rehabilitation and creation of new multifamily rental housing. Addressing stubbornly low rental housing supply levels, and helping renters manage security deposits and build a payment history, are key areas to address that can facilitate future homeownership.
“[The] MBA is also pleased to see the commitment to exploring the expansive use of Special Purpose Credit Programs (SPCPs) to increase access to mortgage credit to traditionally underserved communities,” Broeksmit adds. “[The] MBA has been at the forefront of encouraging regulators, the GSEs, and lenders to facilitate the creation of effective SPCPs. The use of SPCPs will be particularly important for core mission borrowers, especially minority groups who may not have generational wealth to use to save for a down payment.
“Close partnership with FHFA, the GSEs, HUD, civil rights groups and other key stakeholders will help to ensure the equitable housing finance plans are innovative, successful, flexible to improvements, and achieve the core mission of sustainable access to homeownership, while maintaining the safety and soundness at the GSEs,” Broeksmit concludes. “Furthermore, we appreciate the promise for transparency on pilot programs to ensure that they have clearly defined objectives, are time-delimited, and – if deemed successful – eventually made available to all eligible lenders regardless of size or business model.
“[The] MBA looks forward to industry collaboration on the ideas and programs in these plans.”
Leslie Rouda Smith, president of the National Association of Realtors, applauded the FHFA’s “long-term plan to bring historically underserved groups into homeownership through innovative equity solutions.”
“The homeownership gap is a result of more than a century of problematic practices and will take years of refinement, application, and tenacity to resolve,” Smith says.