|HUD Raises Housing Goals For Fannie Mae, Freddie Mac
By Eugene T. Lowe
On July 29, HUD Secretary Andrew Cuomo announced that the Department was raising the required percentage of mortgage loans for low- and moderate-income families that the Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac must buy from the current goal of 42 percent to 50 percent. This requirement, which is called the Affordable Housing Goals, was last set by HUD in 1995, came up for renewal this year. HUD could have left the goals unchanged, but chose to increase them.
The department will also increase the affordable housing goals for loans made to underserved areas (from 24 percent to 31 percent) as well as the goal for mortgages to benefit families with very low incomes (from 14 percent to 20 percent).
By increasing the goals, Fannie Mae and Freddie Mac will buy $2.4 trillion in mortgages over the next 10 years to provide affordable housing for about 28.1 million low- and moderate-income families.
Fannie Mae Chairman Franklin D. Raines, National Association of Home Builders President Charles Ruma and Enterprise Foundation CEO Bart Harvey joined Secretary Cuomo in announcing the new goals. Franklin Raines said that Fannie Mae is committed to reaching the new "stretch goals."
"This action will transform the lives of millions of families across our country by giving them new opportunities to buy homes or move into apartments with rents they can afford," Cuomo said. "It will strengthen our economy and create jobs by stimulating more home construction, it will help ease the terrible shortage of affordable housing plaguing far too many communities, and it will help reduce the huge homeownership gap dividing whites from minorities and suburbs from cities."
During the 67th Annual Conference of Mayors meeting in New Orleans in June, mayors approved a resolution that supported the Administration's effort to increase homeownership by calling on HUD, Fannie Mae and Freddie Mac to increase the affordable housing lending goals for Government Sponsored Enterprises to effectively expand lending to low-, moderate- and middle-income borrowers and undeserved neighborhoods.
At the announcement of the new affordable housing goals, the U.S. Conference of Mayors released a statement which applauded HUD and Fannie Mae on reaching the agreement. J. Thomas Cochran, Executive Director of the Conference of Mayors said, "Through this agreement, HUD and Fannie Mae have responded to our call to provide greater access to loans for Americans looking to own their first home."