The Bush administration is mulling ways Fannie Mae and Freddie Mac can help with the Katrina recovery effort, but not in the context of legislation requiring the two GSEs to create an affordable housing fund, according to a Department of Housing and Urban Development official."The administration is confident that a GSE bill can move forward this year," HUD Assistant Secretary Steven Nesmith told a National Association of Federal Credit Unions conference. Given the tragedy in the Gulf States caused by Hurricane Katrina, Mr. Nesmith told reporters, the administration is beginning to consider ways the government-sponsored enterprise bill could be used to help in the recovery effort. However, the administration remains opposed to creating a GSE affordable housing fund, which is part of a House GSE bill, even if the funds are targeted at helping with the hurricane recovery effort. Meanwhile, Fannie Mae is reallocating its resources to help with the reconstruction effort, said Daniel Mudd, Fannie's president and chief executive officer. He told the NAFCU conference that Fannie is committing hundreds of millions of dollars for redevelopment and he has assigned two top executives to coordinate Fannie's response.

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