Oxley: Tap GSEs for Katrina Rebuilding

House Financial Services Committee Chairman Michael Oxley, R-Ohio, wants to tap the resources of Fannie Mae and Freddie Mac to help with the rebuilding of homes destroyed by Hurricane Katrina.A committee-passed GSE bill would require the two government-sponsored enterprises to contribute 5% of their profits to an affordable housing fund, and now the chairman is proposing a change that would give priority for AH projects in the Gulf Coast states. Chairman Oxley apparently is hoping this change will make it easier to get the full House to pass the GSE bill (H.R. 1461) and increase resources for the rebuilding effort without increasing the budget deficit. In related news, the Judiciary Committee's review of H.R. 1461 ends Sept. 16, and sources indicate that the GSE bill will be returned to the Financial Services Committee without any changes. The Judiciary Committee has declined to comment on its plans. Separately, the Federal Housing Finance Board is granting waivers from income limits so that Katrina victims can use Federal Home Loan Bank-financed affordable housing units. The Dallas FHLBank has already received a waiver, and other banks are encouraged to apply. The 12 FHLBanks, which are GSEs, have been contributing approximately 10% of their earnings toward AH projects since 1990.