The Federal Housing Finance Agency (FHFA) has announced updates to Fannie Mae and Freddie Mac’s Equitable Housing Finance Plans for 2022 to 2024, which aim to identify and address barriers to sustainable housing opportunities.
The updates build upon the inaugural plans first announced last year for the government-sponsored enterprises (GSEs) and make adjustments based on initial research and findings.
“As we celebrate Fair Housing Month and the 55th anniversary of the Fair Housing Act, we are reminded that every step taken toward bringing more equity into the housing finance system is a step in the right direction,” says FHFA director Sandra L. Thompson. “In 2022, the enterprises helped more than 834,000 households through various actions outlined in their Equitable Housing Finance Plans.”
Fannie Mae’s plan focuses on two main objectives:
- Reducing upfront rental and homeownership costs and eliminating outdated barriers related to insufficient credit; and
- Improving the chances for long-term success for underserved borrowers and renters by focusing on education and counseling, successfully navigating the mortgage process, and housing stability.
The Equitable Housing Finance Plan for 2023 includes 25 separate actions that advance these objectives.
“Since the launch of our plan in 2022, we have made considerable progress in identifying meaningful ways to address historical challenges faced by underserved communities, particularly for Black and Latino people,” says Katrina Jones, vice president of racial equity, strategy, and impact at Fannie Mae. “When you add the present-day challenges of inadequate affordable housing supply and high housing costs, overcoming barriers to housing can seem harder than ever. But we are committed to making a fundamentally fairer and more equitable future for housing.”
Freddie Mac’s plan proposes the following five updates:
- Using Special Purpose Credit Programs to make homeownership possible for underserved communities;
- Continuing to help renters achieve homeownership by establishing and improving credit scores and considering a history of on-time rent payments in loan purchase decisions;
- Supporting the creation, preservation, and rehabilitation of affordable housing by increasing the availability of accessory dwelling units, manufactured homes, and land trust mortgage offerings;
- Launching multiple initiatives to increase diversity across the housing finance industry; and
- Educating the industry and consumers by providing outreach, resources, and research to expand housing opportunities, particularly for diverse home buyers.
“The actions laid out in this year’s Equitable Housing Finance Plan build upon the work we started last year to give families in underserved communities a more equitable chance to have a quality, affordable place to call home,” says Michael DeVito, CEO of Freddie Mac. “We have made meaningful progress over the last year, and we know there is much more to do. The update released today illustrates our commitment to help more families in the years to come.”
In addition, the GSEs released performance reports that outlined their progress under their Equitable Housing Finance Plans during 2022. Details on the new actions and initiatives from both enterprises can be found here and here.