Fannie Mae and Freddie Mac Release Equitable Housing Plans
Mary Scott Balys
On June 8, the Federal Housing Finance Agency (FHFA) released the long-awaited Equitable Housing Finance Plans for 2022-2024 for both Fannie Mae and Freddie Mac (the GSEs). The plans are aimed to increase the GSEs focus on providing equitable access to affordable and sustainable housing. FHFA also released a pilot transparency framework to provide more accountability and public information about the GSEs pilot program. OFN submitted comments on the development of the Equitable Housing Finance plans to FHFA last December.
The plan from Freddie Mac consists of five key areas:
- Addressing the Homeownership Gap
- Strengthening Investment within Formerly Redlined Areas
- Financing the Creation and Preservation of Affordable Housing
- Increasing Opportunities for Renters
- Helping to Address Disparities Among Black and Latino Communities
To accomplish these goals, several of the strategies directly mention working with CDFIs including:
- Addressing systemic underinvestment in formerly redlined areas by helping CDFIs and minority depository institutions (MDIs) with improved access to capital.
- Increasing outreach, through CDFIs among other stakeholders, to diverse borrowers.
- Developing a small multifamily lender mentoring and correspondent relationship program to improve the ability of CDFIs to access Freddie Mac securitization vehicles and create new liquidity vehicles to work with CDFIs, MDIs, and other small financial institutions.
- Assisting in the preservation of existing affordable housing by increasing flexibility for access to loan pool securitization loans specifically for rehabilitation projects, with a concentration on CDFIs and other institutions serving racially or ethnically concentrated areas of poverty, formerly redlined areas, and other geographic areas of underinvestment.
The plan from Fannie Mae focuses on the needs of Black homeowners and renters with a plan to expand to the challenges faced by other populations that have been historically underserved by the housing finance system in the future.
The plan is structured around the three phases of the housing journey:
- Housing Preparation, served through financial education and credit building
- Renting or Buying, served through removing the obstacles faced in shopping for, renting, buying, or financing a home
- Moving In and Maintaining, served by helping homeowners and renters sustain disruptions and remain stably housed
The 17 specific strategies to accomplish these goals focus largely on expanding existing programs, increasing educational resources, and piloting special purpose credit programs (SPCP) to serve specific needs, like down payment assistance. Fannie Mae does not specifically mention CDFIs in their plan, but OFN hopes the agency will partner with CDFIs in order to reach their goals.
The plans are subject to annual review by the GSEs and evaluation by FHFA.