Greater GSE AH Effort Sought in Budget

In order to meet their new affordable housing goals Fannie Mae and Freddie Mac need to be more "innovative or aggressive" in purchasing low- to moderate-income mortgages, according to the Bush Administration's new fiscal budget.The White House suggests Fannie and Freddie should use a, "larger portion of the subsidy they enjoy as a result of their Government ties to support purchases of goals-qualifying loans." According to figures compiled by the Department of Housing and Urban Development, between 2001 and 2003 25.7% of Fannie's loan purchases funded first-time minority home buyers compared to 26.1% for Freddie Mac, and 39.1% for the overall market. The White House believes that Fannie and Freddie, with "their large subsidy" and "their substantial market share" should lead the market in affordable housing loans.