Treasury, HUD Release Housing Finance Reform Plans

Thursday, September 5, 2019 - 3:45pm

The U.S. Treasury Department and the U.S. Department of Housing and Urban Development (HUD) today released plans with recommendations for legislative and administrative reforms concerning housing finance reform, including continuing to proceed to end the conservatorship for government-sponsored entities (GSEs) Fannie Mae and Freddie Mac. The plans address the Federal Housing Administration (FHA) and Fannie Mae and Freddie Mac. The Treasury Department report makes 49 legislative and administrative recommendations. Those include having each GSE recapitalized so that private capital takes a first-loss position on the GSEs' exposure to risk and loss; the replacement of the GSEs’ statutory affordable housing goals with a mechanism to deliver support to first-time homebuyers, low-and moderate income rural and other historically underserved borrowers; and revisiting GSEs’ underwriting criteria for multifamily loans in jurisdictions with rent-control laws or other impediments to housing development. HUD’s report makes 67 legislative and administrative recommendations, including restructuring FHA as an autonomous corporation within HUD, separating the mortgage insurance from rental subsidy administration within FHA and lifting the 455,000-unit cap in the Rental Assistance Demonstration program.