Unveiling AH Goals, HUD Says GSEs 'Don't Lead'

Declaring that the GSEs "don't lead the market" when it comes to funding affordable housing, the Department of Housing and Urban Development on Monday published proposed rules that would boost their purchase of these loans by 5%-10% on average.During a news conference with reporters, Assistant Housing Secretary John Weicher criticized Fannie Mae's and Freddie Mac's purchases of loans to first-time homebuyers, in particular mortgages made to minorities. By 2008, 57% of the GSEs' loan purchases must be for low- and moderate-income homebuyers, compared with 50% this year. "We propose the GSEs should match the market by 2008," he said. The new housing goals were actually unveiled several weeks ago (first to Congress) but were formally published Monday in the Federal Register. The agency set a 60-day comment period and will publish final goals later this year. In a statement Fannie Mae said, "we appreciate the spirit of proposals to change our statutory housing goals to focus on the nation's toughest housing problems." A Freddie Mac spokesman said the company "has a strong record of supporting low- and very low-income borrowers." Both firms declined to address Mr. Weicher's comments regarding their purported failure to lead the market.