The Obama administration has unveiled its plan for winding down its involvement in the government-sponsored enterprises, Fannie Mae and Freddie Mac. The administration’s plan, sent to Congress by the Treasury Department, calls for continuing to wind down of the GSEs investment portfolio at an annual rate of no less than 10% per year. The Treasury also wants to see 10% down payments from potential borrowers. According to the statement from the Treasury, as Fannie Mae and Freddie Mac’s presence in the market shrinks, program changes will also happen at Federal Housing Administration to ensure that the private sector picks up this new market share. “This is a plan for fundamental reform – to wind down the GSEs, strengthen consumer protection, and preserve access to affordable housing for people who need it,” said Treasury Secretary Tim Geithner. “We are going to start the process of reform now, but we are going to do it responsibly and carefully so that we support the recovery and the process of repair of the housing market.” In a conference call Geithner predicted a 5 to 7 year timeline for implementation. The administration recommends that Congress allow the present increase in FHA conforming loan limits to expire as scheduled on Oct. 1, after which it will explore further reductions. The administration will also put in place a 25 basis point increase in the price of FHA’s annual mortgage insurance premium, as detailed in the President’s 2012 Budget. The Department of Housing and Urban Development Secretary Shaun Donovan said: “We must continue to take the necessary steps to ensure that Americans have access to quality housing they can afford.  This involves rebalancing our housing priorities to support a range of affordable options, from promoting much-needed financing for quality, affordable rental homes to ensuring the availability of safe, and sustainable mortgage products for current and future homeowners.” The administration also wants to put in place national standards for mortgage servicing. This includes reforming servicing compensation and requiring that mortgage documents disclose the presence of second liens. Write to Jacob Gaffney. Follow him on Twitter @JacobGaffney.