Home Builders Endorse Strengthening Housing Goals Of Fannie Mae, Freddie Mac
June 21, 2004
As the Department of Housing and Urban Development works to revamp its rules to require Fannie Mae and Freddie Mac to finance more affordable housing, the National Association of Home Builders (NAHB) today endorsed measures to strengthen the housing goals of the two secondary market institutions to ensure that they diligently pursue their mission to house America’s working families and other underserved communities.
"NAHB commends HUD for its efforts to increase mortgage financing for home purchasers and rental housing, and we are working with Secretary Jackson to enact housing goals that are challenging, yet do not jeopardize or impede the ability of Fannie Mae and Freddie Mac to provide liquidity to the broader housing finance market,” said Jerry Howard, executive vice president and CEO of NAHB.
The comment deadline to weigh in on HUD’s proposed affordable housing goals for Fannie Mae and Freddie Mac is July 2. NAHB and other housing groups are urging the cabinet agency to grant a 60-day extension.
"HUD’s rule-making proposal is very complex, and we are requesting more time in order to obtain additional data so we can provide the department with meaningful comments and recommendations. We are in complete agreement with HUD on the need to enact vigorous housing goals for Fannie Mae and Freddie Mac, and we want to be sure that this is done in a thoughtful, deliberate manner in order to avoid any unforeseen consequences to the nation’s housing finance system,” said Howard.
Stating that there are still too many underserved areas with critical housing needs, Howard highlighted key market segments where the two secondary mortgage market institutions should be encouraged to increase their lending activities.
"NAHB is asking HUD to reinstate the goals’ bonus point system,” said Howard. "The bonus point system is a targeted approach which proved to be effective in encouraging Fannie Mae and Freddie Mac to assist with small multifamily projects. To ensure that HUD continues to utilize this targeted approach, we will ask HUD to reinstate the bonus points for specific housing segments that require added attention, such as rural areas and other underserved borrowers.”
"Boosting the homeownership rate among previously underserved populations should be an essential focus for the two housing enterprises,” Howard added.
While many policy makers have suggested curbing the growth of Fannie Mae and Freddie Mac or even removing their status as housing government-sponsored enterprises (GSEs) as a means to bring about reform, the nation’s home builders believe these steps would have harmful effects and would prevent the GSEs from fulfilling their mission to finance affordable housing at the lowest possible cost to America’s households.
"A better approach would be for HUD to establish a more challenging goal system for the GSEs while enabling them to carry out their job of providing liquidity to the housing finance system,” said Howard. "We look forward to working with the Administration and others in the housing community on this important issue.”