Coalition Urges HUD to Revoke ADC Ruling

The Consumer Mortgage Coalition is urging the Department of Housing and Urban Development to revoke a decision that gave Fannie Mae the green light to expand its construction lending program.Fannie's entry into the ADC market will "simply displace funding by private sector institutions," the CMC's executive director, Anne Canfield, says in a letter to HUD Secretary Alphonso Jackson. "The result will be that private institutions will be driven from funding this market sector because of Fannie Mae's government-subsidized expanded entry into it." Fannie recently announced that it plans to purchase $10 billion in acquisition, construction, and development loans over 10 years. The CMC also wants HUD to conduct a rulemaking to determine which activities are permissible for the government-sponsored enterprises -- Fannie and Freddie Mac. "We urge HUD to engage in a broad rulemaking, and to reopen the existing prior approval regulation … to clarify the GSEs' mission, and also to strengthen the procedural steps required before a new program is approved," Ms. Canfield said.