Cambridge, MA – RealEstateRama – In the face of a mounting housing affordability crisis exacerbated by the COVID-19 pandemic, 20 leading affordable housing organizations today urged the Federal Housing Finance Agency (FHFA) to require Fannie Mae and Freddie Mac (collectively “Enterprises”) to substantially improve their Duty to Serve proposals before the regulator approves them.
The Duty to Serve regulation requires Fannie Mae and Freddie Mac to facilitate housing opportunities in three areas: manufactured housing, affordable housing preservation and rural housing. In May, under the prior FHFA director, the Enterprises submitted mandatory three-year plans for how they will comply.
“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, united as the new Underserved Mortgage Markets Coalition, wrote yesterday in a letter to FHFA Acting Director Sandra L. Thompson.
The coalition urges FHFA to make regulatory changes to enable Duty to Serve to function as intended by providing Fannie Mae and Freddie Mac with the flexibility to reach underserved mortgage markets more effectively.
In addition, the coalition supports FHFA’s new initiative requiring Fannie Mae and Freddie Mac 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,” said 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.”
Along with advocating for stronger plans and regulations, the coalition will use a new tracking tool to closely monitor the Enterprises’ Duty to Serve and racial equity performance. The Coalition is conducting in-depth research to compare the performance of Fannie Mae and Freddie Mac to the broader U.S. mortgage market to make it easier to assess the extent to which the Enterprises are serving their public mission and to inform policy makers going forward.
“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,” said Dr. Akilah Watkins, President and CEO of the Center for Community Progress.
The members of the Underserved Mortgage Markets Coalition include:
- 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
About NeighborWorks America
For more than 40 years, Neighborhood Reinvestment Corp., a national, nonpartisan nonprofit known as NeighborWorks America, has strived to make every community a place of opportunity. Our network of excellence includes nearly 250 members in every state, the District of Columbia and Puerto Rico. NeighborWorks America offers grant funding, peer-exchange, technical assistance, evaluation tools and access to training, as the nation’s leading trainer of housing and community development professionals. NeighborWorks network organizations provide residents in their communities with affordable homes, owned and rented; financial counseling and coaching; community building through resident engagement; and collaboration in the areas of health, employment and education.