A new housing coalition—the Underserved Mortgage Markets Coalition—formed by 20 affordable housing organizations, recently wrote to the Federal Housing Finance Agency (FHFA), urging them to require Fannie Mae and Freddie Mac to “substantially improve their Duty to Serve proposals before the regulator approves them.”
The members of the coalition include the Center for Community Progress, cdcb, Enterprise Community Partner, Fahe, 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, Novogradac, Opportunity Finance Network, Prosperity Now, RMI and ROC USA.
The Duty to Serve regulation requires the enterprises to facilitate housing opportunities in manufactured housing, affordable housing preservation and rural housing. In May, under the prior FHFA Director, Fannie and Freddie 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 coalition wrote in a letter to FHFA Acting Director Sandra L. Thompson.
The coalition urged FHFA to make regulatory changes to enable Duty to Serve to function as intended by providing Fannie Mae and Freddie Mac 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, in a statement. “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 stated it will advocate for stronger plans and regulations, using a new tracking tool to monitor the performance of Fannie Mae and Freddie Mac related to Duty to Serve and racial equity. The coalition is also conducting research to compare the performance of Fannie Mae and Freddie Mac to the broader U.S. mortgage market to assess how they 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, a member of the coalition, in a statement.
