20 housing groups want more out of Fannie and Freddie’s “Duty to Serve” regulation – specifically more funding for manufactured, rural and affordable housing.
WASHINGTON – In the face of a mounting housing affordability crisis exacerbated by COVID-19, 20 affordable housing organizations are urging the Federal Housing Finance Agency (FHFA) to require Fannie Mae and Freddie Mac (the Enterprises) to substantially improve their “Duty to Serve” proposals before a regulator approves them.
Under the Duty to Serve regulation, Fannie Mae and Freddie Mac must facilitate housing opportunities in three areas: manufactured housing, affordable housing preservation, and rural housing. The Enterprises submitted mandatory three-year plans for how they will comply in May 2021.
“Amid a housing affordability crisis that requires bold and aggressive action, Fannie Mae and Freddie Mac have set forth plans that fail to effectively reach those not served or not served well by the conventional mortgage market.” The organizations, known as the Underserved Mortgage Markets Coalition, wrote a letter to FHFA Acting Director Sandra L. Thompson.
The coalition says it wants FHFA to make regulatory changes to enable Duty to Serve to function as intended and reach underserved mortgage markets more effectively. At the same time, it supports FHFA’s initiative that requires Fannie and Freddie to create plans to reduce racial or ethnic homeownership gaps and reinvest in formerly redlined neighborhoods.
“Solving our housing affordability crisis requires multiple actions by all levels of government and the private sector, and an invigorated role for Fannie Mae and Freddie Mac is one of them,” says George W. “Mac” McCarthy, president of the Lincoln Institute of Land Policy, convener of the coalition. “The Underserved Mortgage Markets Coalition seeks to hold Fannie Mae and Freddie Mac accountable and uphold their founding purpose: to bring housing finance opportunities to American families not traditionally served by the private market.”
The coalition says it will use a new tracking tool to closely monitor the performance of Fannie Mae and Freddie Mac related to Duty to Serve and racial equity. It’s also conducting in-depth research to compare the Enterprises’ performance to the broader U.S. mortgage market, so it’s easier for outside experts to assess how well they’re serving their public mission.
“The coalition seeks to work constructively with the FHFA, Fannie Mae and Freddie Mac to meet the urgent needs of millions of Americans who are locked out of the opportunities that come with safe, stable, and affordable housing,” adds Dr. Akilah Watkins, president and CEO of the Center for Community Progress, a member of the coalition.
Members of the Underserved Mortgage Markets Coalition
- Center for Community Progress
- Enterprise Community Partners
- Grounded Solutions Network
- Housing Assistance Council
- Housing Partnership Network
- Lincoln Institute of Land Policy
- Local Initiatives Support Corporation
- National Council of State Housing Agencies
- National Community Stabilization Trust
- National Housing Conference
- National Housing Trust
- NeighborWorks America
- Next Step
- Opportunity Finance Network
- Prosperity Now
- ROC USA
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