Jeff Hayward is Fannie Mae’s executive vice president and head of its multifamily business. For over 30 years, he has led various aspects of the business including credit, quality control, and risk management. Hayward is now responsible for the corporate affordable housing strategy. Fannie Mae is the largest provider of financing for multifamily apartments in the U.S. In 2016, Fannie Mae financed 351,000 low-income units, defined as those affordable to tenants earning up to 80% of the Area Median Income.
[Expert Commentary] The Fair Housing Act changed lives, but it did not change all attitudes. It did not change all behaviors. The legacy of housing discrimination and segregation remains a reality in virtually every community in the United States.
With the Section 8 Housing Choice Voucher Program, low-income renters in the program pay 30% of their incomes toward housing, with the federally funded program paying the balance to the landlord up to a set maximum. Demand is so great, however, that thousands of families can linger for years on waitlists in some cities with no assurance they will ever receive a voucher. Created in the 1970s, it may be time to take a fresh look at the voucher system to ensure we're effectively serving today's households.
Multifamily construction didn’t really rebound after the crash until 2013. Even still, it's playing “catch up.” In addition, construction of subsidized housing has declined as a percentage of all new multifamily construction and now represents only around a fifth of new construction annually – not enough to keep pace with demand. This is the first of a two-part EXCLUSIVE from Fannie Mae to readers of HousingWire.
In the days following the 2016 election, business leaders across many industries were hopeful that the new president would make good on his promise of widespread deregulation. Banks and other financial institutions were especially optimistic. Here at last was the relief they had been looking for. Or not.
Even Hollywood knows better than to produce a sequel when the original movie is truly, horrifically bad. That’s why, thankfully, we haven’t seen sequels to such all-time cinematic disasters as Howard the Duck, Gigli, The Last Airbender, Jack and Jill, Glitter, or Battlefield Earth. Which brings us, in an admittedly roundabout way, to the question of whether we’re about to see a sequel of sorts in the mortgage industry: The Return of the Subprime Loan.
With FHFA director Mel Watt’s term due to expire in January 2019, the question of whether to move ahead on some version of administrative reform may rest with his successor. In the meantime, policy makers would be well-served to work together to come to some agreement on options for administrative reform. At a minimum, agreeing on a common definition would be a good first step.