Real Estate Marketing & Beyond
The Federal Housing Finance Agency has put affordability at the top of its agenda in its annual to-do list for government-sponsored enterprises, Fannie Mae and Freddie Mac.
In its 2022 Scorecard, the FHFA also called on Fannie and Freddie to update their pricing frameworks to boost support for “core mission borrowers”. The target is loan-level price adjustments, or risk-based fees for borrowers, that housing advocates say increase the cost of homeownership for those who can least afford it.
The Scorecard is an annual list that the FHFA uses to communicate its priorities and expectations to the GSEs. This year’s Scorecard gives equal weight to both equity, housing affordability, safety and soundness. It also directs the GSEs to transfer more of the risk they carry to private investors. During the coronavirus pandemic, Fannie Mae placed its risk transfer program on hold, and only restarted it in September.
“The 2022 Scorecard will better position the enterprises to support the housing market throughout the economic cycle,” said FHFA Acting Director Sandra Thompson. “Key to the enterprises fulfilling their statutory mandates is their ability to advance sustainable and affordable homeownership and rental housing opportunities, and to improve their capital position by transferring credit risk away from the taxpayer.”
The FHFA also set a number of specific goals for Fannie and Freddie. It says they should work to increase availability of small balance mortgages and make recommendations to policymakers on how to boost the supply of affordable homes. Also, they should finish the validation and approval of new credit scoring models and move to implement those changes, it said.
The 2022 Scorecard also notably emphasizes the GSE’s need to “foster sustainable and equitable housing finance markets that support safe decent and affordable homeownership and rental opportunities.”
Jim Gray, a senior fellow at the Lincoln Institute of Land Policy, told HousingWire the greater emphasis on affordable housing is a “welcome change” from 2021, when the FHFA’s Scorecard only mentioned affordable rental housing as a policy goal.
