GSE Bill AH Goals Target Lower Incomes

A GSE bill approved by the House Financial Services Committee completely revises the affordable housing goals for Fannie Mae and Freddie Mac and would force the two government-sponsored enterprises to purchase single-family and multifamily loans that benefit lower-income families than the current goals."This is a huge development," said Judy Kennedy, president of the National Association of Affordable Housing Lenders. She noted that NAAHL member banks and nonprofit lenders have multifamily loans on their books that are eligible for Community Reinvestment Act credit but the GSEs won't touch them. If enacted into law, the committee-approved bill (H.R. 1461) would create an incentive for the GSEs to purchase those multifamily loans by targeting the goals at very low-income families with area median incomes below 60%, she said. Meanwhile, consumer groups are concerned that SF goals, which are targeted solely on conventional purchase mortgages, need to be revised to provide credit for some refinancing activity. Otherwise, very low-income borrowers could be trapped in predatory loans. "GSE involvement in that portion of the market is very important," said Allen Fishbein, housing policy director for the Consumer Federation of America.