The housing market got good news today as the Office of Federal Housing Enterprise Oversight (OFHEO) announced it was easing the capital requirements for Fannie Mae and Freddie Mac.

The move is designed to bring needed liquidity to the mortgage sector and releases an immediate $200 billion that Fannie and Freddie can use to buy and guarantee home mortgages. Given the subprime situation, investors have been shying away from investing in mortgage-backed securities. That has made it more difficult even for creditworthy consumers to get home loans for purchase or refinancing. Investor worries have also kept mortgage rates higher than economists might have expected, given other financial factors.

The Mortgage Bankers Association praised the decision. "Today's action is a crucial step in the effort to jumpstart the stalled mortgage market. This immediate injection of liquidity reestablishes the pipeline of funds flowing from secondary-market mortgage purchasers to primary-market lenders," Kieran P. Quinn, the group's chairman, said. "This, in turn, will enhance lenders' ability to offer financing to a wide variety of borrowers, including those looking to refinance into a more stable and affordable loan."

The NAHB was not as complimentary. "While we appreciate this action, it falls short of providing the liquidity required to stabilize today's credit-squeezed mortgage market," NAHB CEO Jerry Howard said. "We were expecting a much bolder step by OFHEO, with a greater reduction in the capital surcharge in light of the severity of the mortgage credit crunch."