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FHFA Targets Low-Income Borrowers
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Daily Real Estate News | Thursday, August 20, 2015
The Federal Housing Finance Agency has released new goals for housing finance giants Fannie Mae and Freddie Mac that aim to widen access to housing credit.
On Wednesday, FHFA reportedly instructed Fannie Mae and Freddie Mac to provide additional support to low-income Americans taking out mortgages and refinancing home loans. The new rules order Fannie Mae and Freddie Mac to expand the number of loans they back for low-income families to 24 percent of their purchases of single-family home mortgages from 2015-2017 – that is up from 23 percent in 2014.
FHFA also has instructed the GSEs to back more mortgages refinanced by low-income families and make that a larger share of their refinancing purchases as well.
Fannie Mae and Freddie Mac do not lend money directly to borrowers. The firms purchase mortgages from lenders and then sell them as packaged securities that are guaranteed by the government.
Source: "U.S. Housing Regulator Targets More Support for Poor Borrowers," Reuters (Aug. 19, 2015)