AH Fund a Dealbreaker for GSE Reform?

The ranking Republican on the House Financial Services Committee says he will oppose a GSE regulatory reform bill if it requires Fannie Mae and Freddie Mac to make annual contributions toward an affordable housing fund."In my opinion, this fund represents, in essence, a tax on lower- and middle-class homeowners to finance a government housing program, the need for which is debatable," says Rep. Spencer Bachus, R-Ala, in a letter to the committee chairman, Rep. Barney Frank, D-Mass. (Rep. Frank strongly supports the creation of a GSE affordable housing fund.) Rep. Bachus warned that a substantial number of Republicans can be expected to oppose the AH provision, which would require the government-sponsored enterprises to ante up approximately $500 million a year to fund construction and rehabilitation of affordable housing. During the first year, all the funds would go toward rebuilding in the Gulf Coast areas hit by Hurricane Katrina in 2005. Without the AH fund provision, "an overwhelming majority of Republicans and I could enthusiastically support" the GSE legislation, Rep. Bachus says.