Mortgage News April 18, 2023
This year’s Equitable Housing Finance Plans from Fannie Mae and Freddie Mac have been published, outlining the enlargement of several programs and the launch of new initiatives. These measures are intended to promote feasible opportunities for affordable homeownership and rental housing access.
The latest updates to the plans are an extension of last year’s initial release, which aimed to identify and tackle obstacles to attainable housing opportunities, particularly for marginalized communities. These plans are aligned with the government-sponsored enterprises’ objectives of promoting fairness in housing finance for the upcoming three years, and they will receive yearly revisions during this period. The modifications made to the plans were informed by research and insights gained throughout the previous year.
Fannie Mae’s plan has a specified emphasis on addressing two challenges that many Black and Latino homeowners and renters encounter. The first is to decrease the initial expenses of renting and owning a home that arises from inadequate credit, and the second is to increase the likelihood of success by prioritizing education.
Fannie Mae’s 2023 plan encompasses 25 distinct measures that are aimed at assisting first-time homebuyers. These measures comprise the expansion and creation of down payment aid programs, special-purpose credit programs (SPCPs), and advancements in mortgage underwriting. Additionally, the plan includes backing for five organizations that were awarded contracts via Fannie’s Sustainable Communities Innovation Challenge last year to augment the affordable housing stock. The strategy also involves the expansion of consumer counseling programs to empower more individuals to attain long-term housing stability.
Freddie Mac’s updated plan follows a comparable approach that involves the acquisition of additional loans via special-purpose credit programs (SPCPs) while providing backing for the creation and refurbishment of reasonably-priced and workforce housing. The plan also highlights the enrollment of renter households in the agency’s credit-building initiative. Last year, over 184,000 renter households joined Freddie’s program, with more than 27,000 of them establishing credit scores for the first time. This year, the company intends to extend the initiative to additional credit-reporting vendors.
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