Fannie Mae and Freddie Mac today each revealed their final plans to confront the growing U.S. affordable housing crisis.
The low inventory of affordably prices homes continues to shrink, and Freddie Mac announced its plan focuses on supporting underserved markets by financing more rural and manufactured homes. With this effort, the company hopes to preserve affordable housing for homebuyers and renters across the U.S.
Fannie Mae explained the plan complements its ongoing efforts to bring innovative affordable housing solutions to market in a safe and sound manner. It listed three categories of underserved markets its new plan targets.
- Manufactured Housing – Exploring financing options for one of the largest affordable housing opportunities
- Affordable Housing Preservation – Helping keep established affordable properties available as low-cost housing alternatives
- Rural Housing – Supporting the financing of housing for targeted high-needs rural regions and populations
“This is an important milestone in Fannie Mae’s ongoing efforts to improve access to mortgage financing and create affordable housing opportunities for people of modest means across the country,” said Jeffery Hayward, Fannie Mae executive vice president and head of multifamily. “Our Plan will use analysis, testing, innovative partnerships, and loan purchases to serve markets that need help the most.”
“We are excited to expand on our mission to make affordable housing options available to Americans in all markets and enhance our efforts to identify solutions to the tough challenges that underserved markets face,” Hayward said.
Back in May, the Federal Housing Finance Agency requested public input on the GSE’s new proposed Underserved Markets Plans under the Duty to Serve program.
The plans, also released in May, from Fannie and Freddie, must find a way to reach three specified underserved markets including manufactured housing, affordable housing preservation and rural housing in a safe manner for residential properties that serve very low-, low-, and moderate-income families.
Now, the GSEs presented their final plans. In order to reach single-family underserved markets, Freddie Mac announced its plans:
- Develop a new renovation mortgage product to help rehabilitate aging stock
- Increase liquidity for manufactured housing loan originators by purchasing loans titled as real property and personal property
- Support energy efficiency initiatives and shared equity programs, which help preserve home affordability
“We’re developing responsible solutions to help make home possible for more American families,” said Danny Gardner, Freddie Mac vice president of single-family affordable lending and access to credit. “Addressing the affordability crisis today will benefit our country for decades to come.”
The GSEs will also start several initiatives in the multifamily market in order to help low-income renters cope with the rising costs of rental units.
Some of Freddie Mac's multifamily plans include:
- Re-entering the Low-Income Housing Tax Credit (LIHTC) equity market;
- Increasing liquidity for developers that qualify for federal subsidies, including Section 8 vouchers
- Preserving affordable units by supporting the U.S. Department of Agriculture’s (USDA) housing programs
- Expanding support for manufactured housing communities, including solutions that increase tenant protections
“For more than 45 years, our innovations have brought liquidity, stability and affordability to the mortgage markets, and Duty to Serve is an important continuation of those efforts,” said David Leopold, Freddie Mac Multifamily vice president of targeted affordable sales and investments. “Freddie Mac is uniquely suited to tackle some of America’s most persistent housing problems, and we look forward to deepening this work.”
To learn more about Duty to Serve, and to read each of the GSEs' full plans, click here.