Big Reforms from Fannie Mae and Freddie Mac
Fannie Mae and Freddie Mac are implementing big reforms aimed at helping disadvantaged communities become homeowners and making sure homebuyers of color stay owners.
The initiative from the two federally backed home mortgage companies announced last Wednesday is the most sweeping overhaul since the housing crash in 2008. Some of the big-ticket items exclusively reviewed by USA TODAY include assistance with down payments, reserve funding for homeowners' emergencies and Fannie Mae and Freddie Mac are also rolling out a new credit reporting system that factors rent payments into creditworthiness scores, one of the biggest systemic barriers experts say keep renters of color from being able to purchase a The three-year strategy also laid out plans to increase fairness in the underwriting process, address appraisal disparities in multifamily housing, and finance permanent supportive housing programs primarily geared at providing housing for people experiencing homelessness.
Help is on the way
As part of the effort, Freddie Mac is expected to issue $3 billion in affordable housing bonds this year.
By 2024, Freddie Mac wants to fund the construction of 30,000 new multifamily units that allow credit-building for renters, accept housing choice vouchers and are designed inclusively for people with disabilities. They want to make the credit-building program available to 300,000 units.
The lender also wants to finance loan offerings in underinvested communities and neighborhoods at risk of losing affordability.
The announcement from Fannie Mae and Freddie Mac comes as median home prices and rents across the country skyrocket.
In the first quarter of this year, the median price of a home reached a record $428,000, according to the Federal Reserve Economic Data database, known as FRED.
Rent year-over-year increases have soared 90% across the nation, the most recent analysis by Rent.com found. In some markets, such as Austin and Oklahoma City, rents have shot up more than 112%, two years after a pandemic recession put nearly 40 million people at risk for eviction.
A majority of Americans also believe it's a bad time to buy a house for the first time since 1978.
According to a new poll by Gallup, only 30% of U.S. adults said it was a good time to purchase a home, driven by an annual inflation rate that accelerated to 8.5% in March and interest rates for 30-year fixed mortgages that climbed above 5%, up from 3% in 2020.
Taken together, everyday Americans are looking for relief in a priced-out housing market that has exacerbated inequities.
If you’re interested in more information, I’m here to help. Call Scott Rojo at 916-548-3942.
