July 10, 2017

Enterprise Releases New White Paper on Housing Finance Reform

On Friday Enterprise released a new white paper on housing finance reform, offering specific proposals that would create a more stable, liquid and accessible system for mortgage finance that works for the full spectrum of renters and homeowners in the U.S..

The white paper comes on the heels of a recent hearing in the Senate Banking Committee on options for reforming Fannie Mae and Freddie Mac (collectively the government-sponsored enterprises or GSEs), which is expected to jumpstart a high-stakes debate in the coming months. Senior leadership in both Congress and the White House are identifying housing finance reform as a top legislative priority for 2017.

As the white paper explains, Enterprise believes that any housing finance reform effort must seek to:

  • Ensure stable access to affordable single-family and multifamily credit for all eligible borrowers, both across geographies and throughout the business cycle,
  • Promote broad access to sustainable homeownership for all creditworthy families, and
  • Expand support for rental housing that is affordable to low- and moderate-income households.

The paper then offers five specific policy recommendations for achieving those overarching goals:

  1. Establish an explicit, limited and paid-for government guarantee on qualifying single-family and multifamily mortgage-backed securities, with private investors taking a loss before taxpayers.
  2. Preserve the current multifamily businesses at Fannie and Freddie while ensuring that those businesses continue to focus on affordable rental housing.
  3. Establish an annual assessment of at least 10 basis points on all government-insured, mortgage-backed securities to fund affordable housing activities.
  4. Ensure broad access to the mortgage market for all eligible borrowers and support small lenders and small multifamily properties, particularly those in low-income urban and rural areas.
  5. Preserve the dual mission of the Federal Housing Administration – promoting broad access to homeownership for low- and moderate-income families while providing countercyclical support to the market as needed – while taking steps to shore up the agency’s long-term financial health. 

Read the full white paper here, and see our overview of past legislative efforts to reform America’s housing finance system here.  

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