A GOP budget plan authored by Rep. Paul Ryan calls for the winding down of Fannie Mae and Freddie Mac and higher fees on FHA-insured loans.
“This budget will end corporate welfare in the housing sector,” according to the budget plan
“It seeks to drastically decrease the market dominance of Fannie Mae and Freddie Mac, gradually ending their government guarantees and taxpayer subsidies,” according to a summary of the GOP budget plan.
As the House Budget Committee chairman, Ryan also wants to clamp down on the undercapitalized FHA single-family program that is still facing losses from legacy loans.
“This budget prevents the next bailout of a housing agency,” the GOP budget plan says, and prevents risk-lending behavior.
“The customary budget treatment of FHA loans understates the costs and encourages government to shift risk from Fannie and Freddie to FHA. This budget requires the use of fair value scoring for federal housing credit programs so we properly evaluate taxpayers’ risk.”
Ryan’s budget is designed to reduce government spending by $4.6 trillion over 10 years.
