The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac will be required to formulate new Equitable Housing Finance plans, aimed at identifying and addressing barriers to sustainable housing opportunities, by the end of 2021.
The plans, which are required to be updated annually, will include goals an action plans to advance equity in housing finance for the next three years. Fannie and Freddie will also be required to submit annual progress reports to keep the FHFA posted on what each government-sponsored enterprise (GSE) has done to implement their plans over the course of the year.
“For generations, discriminatory practices like redlining have prevented communities of color from building wealth through homeownership,” said FHFA acting director Sandra L. Thompson, who has long stated the advancement of housing equality as one of her goals during her time at the head of the agency.
“By identifying the barriers to equitable and sustainable housing finance opportunities and setting goals for addressing those barriers, the Enterprises, consistent with safety and soundness, can responsibly reduce the racial and ethnic disparities in homeownership and wealth that still exist today.”
“This is a major step in bringing more equity to the housing finance industry,” said Marcia L. Fudge, secretary of the Department of Housing and Urban Development (HUD). “HUD’s recent collaborations with FHFA are crucial actions that will advance fair housing and fair lending for all Americans and expand access to opportunities for homeownership and the generational wealth building that can come from it. HUD is pleased to work alongside FHFA and others on a comprehensive approach to building a more equitable housing finance system.”
The Mortgage Bankers Association (MBA) praised the FHFA for the move.
“MBA commends FHFA for engaging the GSEs in the development of comprehensive business plans to advance equity in housing,” said Bob Broeksmit, president and CEO of the MBA. “We have championed efforts to reduce the racial homeownership gap, and we will be releasing our policy recommendations in the coming weeks, including areas where the GSEs can play a critical role.
“We look forward to continuing to work with both FHFA and HUD, as well as Congress and other stakeholders, on policies that will promote fair, equitable, and sustainable access to homeownership for all Americans who aspire to it.”