Tag: Freddie Mac

House Passes Bipartisan Housing Package; HFSC Hearings Spotlight Affordability and Secondary Mortgage Market

Posted on by abigail_grenadier

This week, the House overwhelmingly passed the bipartisan Housing for the 21st Century Act (H.R. 6644). Following Monday’s vote on this sweeping bill, the House Financial Services Committee (HFSC) held a hearing on Tuesday to examine how policies in the financial services and housing sectors contributed to rising cost-of-living pressures for American families by restricting access to capital and credit. On Wednesday, the Subcommittee on Housing and Insurance held a hearing to examine housing affordability and the role of the secondary mortgage market.

Housing for the 21st Century Act

  • On Monday, the House approved the bipartisan Housing for the 21st Century Act by a 390-9 vote, marking one of the strongest bipartisan housing votes in recent years. (The Hill, Feb. 10)
  • Led by HFSC Chairman French Hill (R-AR) and Ranking Member Maxine Waters (D-CA), the legislation includes provisions to streamline housing production and affordability by updating outdated programs, removing unnecessary federal requirements, increasing local flexibility, and allowing banks to more freely deploy funding.  (The Hill, Feb. 10 | Comment Letter, Feb. 6)
  • The bill addresses a housing shortfall of up to 5.5 million units, driven by regulatory delays, zoning constraints, and rising construction costs. (The Hill, Feb. 6)
  • In a Feb. 6 letter to Congress, The Real Estate Roundtable (RER) joined a group of national real estate and housing organizations in expressing “strong support” for the measure, commending the HFSC for advancing “practical, solutions-oriented housing policy.” (Comment Letter, Feb. 6)
  • The coalition added that the bill “supports increased housing supply, improved access to homeownership, and appropriate consumer protections, particularly in high-cost and underserved communities.” (Comment Letter, Feb. 6)
  • The bill’s passage in the House sets up negotiations with the Senate, which passed its own housing legislation—the ROAD to Housing Act—late last year. The two bills contain similar supply-side reforms but differ on certain grant programs and community bank provisions. (Punchbowl News, Dec. 14)

Hearing on Affordability Crisis

  • On Feb. 10, the HFSC held a hearing titled, “Priced Out of the American Dream: Understanding the Policies Behind Rising Costs of Housing and Borrowing,” focused on legislative and regulatory proposals to address the affordability crisis. (HFSC Hearing, Feb. 10)
  • The hearing noticed three proposals to restrict institutional investment in single-family rentals (SFRs)—a topic that has gained momentum following a related Executive Order issued last month. However, the SFR issue surfaced only briefly during Tuesday’s session, and none of the restrictive measures advanced. (Executive Order, Jan. 20)
  • In a Feb. 10 comment letter to HFSC leadership, RER and national real estate trade groups cautioned against limiting institutional capital in the housing market, including SFR assets. (Comment Letter, Feb. 10)
  • The letter explained, “There is no evidence that institutional investors are crowding out prospective homebuyers,” citing data showing that institutional investors accounted for just 0.3 percent of the $2 trillion in single-family home purchases over the past year. (Comment Letter, Feb. 10)
  • The letter highlighted the positive developments that institutional investors have contributed to the market, stating, “Institutional SFR investment expands rental supply in markets where it was previously limited, increases access to high-opportunity neighborhoods, and benefits households with lower incomes, wealth, and savings.” (Comment Letter, Feb. 10)
  • RER and coalition partners also urged lawmakers to avoid policies that would restrict capital formation and instead prioritize supply-forward reforms to close the nation’s housing gap. (Comment Letter, Feb. 10)

Homeownership and the Secondary Mortgage Market

  • On Feb. 11, the HFSC’s Subcommittee on Housing and Insurance held a hearing titled, “Homeownership and the Role of the Secondary Mortgage Market,” examining the structure, function, and evolution of the market and how the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac impact housing affordability. (HFSC Subcommittee Hearing, Feb. 11)
  • In his opening remarks, Subcommittee Chairman Mike Flood discussed the importance of liquidity and capital efficiency in today’s regulatory environment.
  • “The secondary mortgage market works to provide greater liquidity for lenders and results in greater access to mortgage lending for borrowers. In today’s banking regulatory climate, holding a mortgage on a bank’s balance sheet can result in significant capital costs,” Chairman Flood said. (Rep. Flood Press Release, Feb. 11)
  • Chairman Flood added that no legislation was noticed during the hearing, as the session was intended to explore the subject matter in-depth.
  • Bob Broeksmit, President and CEO of the Mortgage Bankers Association, touched on the substantial role that GSEs play in the secondary market. He also advocated that any reforms enacted to end the GSEs’ government conservatorship provide “an ample runway to ensure deep, liquid secondary markets for single-family and multifamily mortgages through all economic cycles and in all geographic regions.” (MBA Testimony, Feb. 11)

RER will continue engaging lawmakers in both chambers to advance durable housing solutions and sensible GSE reforms that support homeownership, expand affordable housing supply, and sustain economic growth.

GSE Reform Discussions Resurface as President Trump Signals Push to Take Fannie Mae and Freddie Mac Public

Posted on by abigail_grenadier

After nearly 17 years in government conservatorship, Fannie Mae and Freddie Mac may be heading for a significant shift. President Donald Trump recently indicated he is considering taking the government-sponsored enterprises (GSEs) public, renewing efforts to release them that began during his first administration.

GSE Reform

  • Trump emphasized that any transition would retain the federal government’s implicit guarantees. “I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President,” Trump said in a post on Truth Social. (Axios, May 27)
  • The GSEs have been in federal conservatorship since 2008, and the administration has not yet detailed how the proposed transition would work.
  • Congressional action would likely be required to change their legal status.
  • “Interestingly, the president has not said anything that he wants to end conservatorship,” Federal Housing Finance Agency (FHFA) Director Bill Pulte said during a CNBC interview. “We’re studying actually potentially keeping it in conservatorship and taking it public.” (Barrons, May 29)
  • Pulte said he would be meeting with Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick about potential options for the two entities. (Bloomberg, May 29)
  • Experts warn that without careful implementation, privatization could increase mortgage rates. Both Bessent and Pulte have said they will not support a GSE release that results in higher costs for borrowers.
  • The limited government guarantee is critical to attract private capital without spiking borrowing costs, and support for affordable and underserved housing must remain a priority, regardless of ownership structure, say the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA).
  • RER supports sensible GSE reform that preserves and strengthens America’s housing infrastructure, ensuring financial stability and continued liquidity for ownership, rental housing, and underserved markets. (Roundtable Weekly, May 23)

View from the Hill

  • While no active GSE reform legislation is under consideration in Congress, lawmakers from both parties are seeking more clarity from the administration.
  • Senate Banking Committee members have signaled interest in a structured release, with Senate Republicans expressing cautious optimism and Senate Democrats raising concerns about potential disruptions to an already stressed housing market. (CBS News, May 27)
  • Sen. Mark Warner (D-VA) expressed support for a “smart release plan that wouldn’t disrupt the market.” (Punchbowl News, May 27)
  • “You do this the wrong way, you’re going to screw up a housing market that’s already teetering because of lack of supply,” said Warner. (PoliticoPro, May 23)
  • Sen. Kevin Cramer (R-ND) stated, “I’d want to see the plan, I’d want to talk about transition.”
  • House Financial Services Committee Chairman French Hill (R-AR) noted that “certain important reforms are only possible through statutory changes,” reinforcing that Congressional involvement will likely be necessary.

RER will remain actively engaged on GSE reform through our working group and housing and coalition efforts. We encourage members to provide input as we continue to monitor developments and advocate for policies that support liquidity, stability, and affordability in the housing finance system.

Momentum Builds for Housing Reform in Washington

Posted on by abigail_grenadier

The nation’s housing policy landscape is shifting rapidly as the Trump administration and Congress push forward on multiple fronts—spanning GSE reform, regulatory rollback, and bipartisan legislative efforts to expand affordable housing tools. The Real Estate Roundtable (RER) remains engaged on these developments, reinforcing its priorities through direct advocacy and coalition efforts.

GSE Reform

  • This week, President Trump said he’s “giving very serious consideration” to taking government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac public—reigniting debate over the future of the mortgage giants. (WSJ, May 21)
  • “I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public,” Trump posted Wednesday on Truth Social. Trump also said he would consult with Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, as well as the GSEs’ chief regulator, Federal Housing Finance Agency head William Pulte. (Politico, May 21)
  • The GSEs have been in federal conservatorship since 2008, and Congressional action would likely be required to change their legal status.
  • While no active legislative proposals exist, some GOP lawmakers are discussing the sale of the government’s stakes in the GSEs as a potential offset for extending tax cuts. (Politico, May 21)
  • RER supports sensible GSE reform that balances taxpayer protection with ensuring financial stability and continued liquidity for ownership, rental housing, and underserved markets.

Roundtable Advocacy

  • This week, RER joined a coalition of 15 national real estate organizations urging the Department of Labor to repeal and revise its 2023 Davis-Bacon rule. (Letter, May 20)
  • In the letter sent to Department of Housing and Urban Development (HUD) Secretary Scott Turner and Labor Secretary Lori Chavez-DeRemer, the coalition applauded the administration’s focus on affordability and supply, and called for an end to outdated wage classifications that drive up project costs.
  • The current rule increases housing construction costs by up to 20% and deters developer participation in federally funded projects.
  • The letter recommends suspending enforcement and launching a formal rulemaking to streamline compliance and reduce regulatory risk.
  • In a separate letter, RER voiced strong support for the bipartisan Housing Affordability Act introduced (S.1527) by Senators Ruben Gallego (D-AZ) and Dave McCormick (R-PA) to modernize the FHA multifamily insurance program. (Letter, May 13)
  • Outdated statutory limits, unchanged since 2003, are suppressing the number of insurable housing units and acting as a barrier to middle-income housing development.
  • Updating the limits would unlock private capital, free up federal resources, and bring the program in line with modern construction costs.

LIHTC Expansion Clears the House

  • The reconciliation bill that passed in the House this week includes major provisions from the Affordable Housing Credit Improvement Act (AHCIA), marking the most significant increase in Low-Income Housing Tax Credit (LIHTC) resources in 25 years. (Affordable Housing Finance, May 22)
  • Although the entire bill was not incorporated into the package, the elements that were included still amount to a significant expansion of the program.
  • The elements included in the bill—increase the 9% credit volume cap, lower the bond financing threshold to 25% for 4% housing credit projects, and authorize up to a 30% basis boost for rural and tribal developments.

Federal Land Sales to Expand Housing Supply

  • HUD Secretary Scott Turner and Interior Secretary Doug Burgum are advancing the administration’s plan to sell underutilized federal land for new housing construction. (Bloomberg, May 22)
  • Their coordinated effort aims to unleash more of the government’s 640 million acres for development—particularly affordable and workforce housing. (PoliticoPro, May 20)

RER will continue to advocate for smart, market-based solutions that expand housing supply, reduce regulatory barriers, and support investment across the full spectrum of the nation’s housing needs.

Housing Policy Updates: Comment Letter to FTC on Single-Family Rental Industry , GSE Considerations, and Tenant Protection Policy Developments

Posted on by Trey Jackson

Housing policy remains at the forefront this week as The Real Estate Roundtable (RER) responded to the Federal Trade Commission’s (FTC) request for public comment on the impact that the large-scale single-family rental (SFR) owner-operators are having on the housing market; the Trump administration continues to explore privatizing Fannie Mae and Freddie Mac; and Federal Housing Finance Agency (FHFA) Director Bill Pulte rescinded a renter protection directive.

Single-Family Rental Housing Study

  • RER and Nareit responded this week to the FTC’s request for public comment  regarding the impact that large-scale Single-Family Rental (SFR) operators and institutional investors are having on home prices and rents in the single-family housing. (Letter)
  • The FTC aims to assess whether “mega investors” influence housing prices negatively.
  • The letter underscores that institutional capital is essential to expanding housing supply and addressing the chronic housing shortage affecting affordability nationwide.
  • As stated in the letter, “Single-family rentals, now part of an institutionally supported asset class, add balance to the U.S. housing market.  SFRs play an important role in the nation’s housing landscape by boosting supply and offering flexible, high-quality housing options that have broad demographic appeal at lower price points compared to home ownership.” 
  • SFR homes constitute only 32 percent of rental units nationally, consistent with historical averages.
  • Institutional investors accounted for a mere 0.3 percent of single-family home purchases in the past year. (BisNow, Feb. 3)
  • The letter emphasized that institutional investors own less than 0.5 percent of U.S. single-family homes, thus not driving the housing affordability crisis.

GSE Reform

  • The Trump administration is actively exploring housing finance reform options, including privatizing Fannie Mae and Freddie Mac. (WSJ, March 23)
  • Recent proposals suggest transferring the Treasury’s stakes to a newly envisioned U.S. sovereign wealth fund. Treasury Secretary Scott Bessent recently discussed this possibility on a podcast, although he provided limited details. (Bloomberg, March 23)
  • Director Bill Pulte and Sec. Bessent have stated that they would like Freddie and Fannie to go private, but not at the cost of disrupting mortgage rates. (Commercial Observer, March 21)
  • An executive order is also under consideration, which could direct federal departments to examine the privatization of Fannie and Freddie.
  • This proposal has drawn substantial attention from housing industry leaders concerned about potential impacts on mortgage markets and affordable housing.

Tenant Protection Policy Rescinded

  • This week, FHFA Director Pulte rescinded a Biden-era directive requiring multifamily housing providers with Fannie Mae or Freddie Mac-backed mortgages to provide renters a 30-day rent increase notice, lease term expirations and a five-day late payment grace period. (GlobeSt, March 26)
  • Pulte contended that this directive increased compliance burdens for lenders and property owners, noting existing state and local regulations already cover lease notices and late fee guidelines.
  • RER along with other national real estate organizations Industry groups such as the National Apartment Association and the National Multifamily Housing Council had opposed the policy, arguing it imposed undue burdens on housing providers. (Bisnow, March 25 | Roundtable Weekly, Jan. 2023)
  • This move aligns with broader industry efforts advocating fewer regulatory constraints to foster housing market stability.

Department of Housing & Urban Development (HUD) Secretary Scott Turner will be a featured speaker at The Roundtable’s Spring Roundtable Meeting on April 8, 2025 (Roundtable-level members only).

This Week on Capitol Hill: Confirmation Hearings and Tax Policy Debates

Posted on by Trey Jackson

This week, the Senate conducted confirmation hearings for several of President-elect Donald Trump’s Cabinet nominees, providing critical insights into the nominees’ perspectives and potential policy directions on real estate, housing, the economy, and tax policy under the incoming administration.

Senate Confirmation Hearings

  • Scott Bessent – Nominee for Secretary of the Treasury: Treasury nominee Scott Bessent faced bipartisan scrutiny during his Senate Finance Committee confirmation hearing over tax policy, tariffs, and China on Thursday. (Axios, Jan 17)
  • He emphasized the importance of extending the 2017 Tax Cuts and Jobs Act, stating, “This is the single most important economic issue of the day.” (Roll Call, Jan. 16 | PoliticoPro, Jan. 16)
  • “We must make permanent the 2017 Tax Cuts and Jobs Act and implement new pro-growth policies to reduce the tax burden on American manufacturers service workers and seniors,” Bessent said in his testimony. He also praised the Opportunity Zones program as a “resounding success,” highlighting its potential to address housing challenges, promote inner-city redevelopment, and support rural growth. (Politico, Jan, 16)
  • He also called for spending cuts and shifts in existing taxes to offset the costs that extending the tax cuts would add to the federal deficit. (AP News, Jan. 16)
  • Lee Zeldin, nominee for EPA Administrator, Chris Wright, nominee for Energy Secretary, and Doug Burgum, nominee for Housing and Urban Development Secretary, also testified this week and are expected to be confirmed. (see Energy story below)
  • Sean Duffy – Nominee for Secretary of the Department of Transportation: Appearing before the Senate Commerce Committee, Duffy emphasized his commitment to safety and pledged to streamline regulatory processes that delay infrastructure projects. Promising to uphold the 2021 infrastructure law, he stated, “I commit to implementing the law,” and vowed to expedite funding distribution, addressing delays to ensure critical projects move forward efficiently. (Politico, Jan. 17)

Federal Housing Finance Agency (FHFA) Nominee

  • On Thursday, Trump announced he would nominate Bill Pulte for Director of the Federal Housing Finance Agency (FHFA). (HousingWire | Reuters Jan. 16)
  • If confirmed, Pulte would oversee Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) standing behind roughly half of the U.S. residential mortgage market.
  • The Trump administration is expected to pursue a plan to release Fannie and Freddie from government control. (GlobeSt., Jan. 17)
  • GOP lawmakers have raised the idea of including language to mandate Fannie and Freddie’s release in this year’s reconciliation package as a way to offset the cost of extending expiring tax cuts. (Politico, Jan. 16)

House Ways and Means Committee Hearing – TCJA

  • The tax debate kicked off Tuesday with the House Committee on Ways and Means’ first hearing on extending key provisions of the TCJA led by Chairman Jason Smith (R-MO). (Fox News, Jan. 14)
  • At the hearing, lawmakers discussed expiring provisions of the TCJA including the SALT deduction, Section 199-A, opportunity zones, and child tax credits.
  • Congress faces the dual challenge of addressing expiring tax provisions while managing fiscal pressures. While bipartisan cooperation is possible on certain issues like affordable housing, divisions over business tax rates, SALT deductions, and the debt ceiling could stall progress.

What’s Next: RER President & CEO Jeffrey DeBoer will be on Marcus & Millichap’s 2025 Economic & CRE Outlook webinar next Thursday, January 23. He will be joined by Mark Zandi and a panel of industry leaders discussing the macro environment and the potential policies of the new administration and key trends on jobs, the FED outlook, tax policy expectations and more. (Register)

Real Estate Industry Urges FHFA to Avoid Linking New Regulations to GSE Financing

Posted on by Trey Jackson

FHFA logo

The Roundtable and an industry coalition recently submitted separate comments in response to a Request for Input from the Federal Housing Finance Agency (FHFA) on multifamily properties with mortgages backed by Fannie Mae and Freddie Mac (the Enterprises). The letters encourage the FHFA to remain focused on the Enterprises’ stated mission “to serve as a reliable source of liquidity and funding for housing finance and community investment.” The industry comments also raise concerns about the FHFA imposing counterproductive property restrictions, such as rent control, on multifamily properties backed by loans from the Enterprises. (Roundtable comments, July 28 and Industry coalition comments, July 31)

Industry Solutions

  • The Roundtable’s comments encouraged the FHFA—the regulator and conservator of the Enterprises—to focus on its pivotal role in America’s housing finance market by maintaining Enterprise support of the multifamily affordable housing market, particularly for low-income households. The letter noted that the imposition of counterproductive restrictions on Enterprise-backed financing and private rental housing providers would lead to less investment and development in the affordable housing market, especially during this time of market uncertainty.
  • The Roundtable letter expressed support for measures to:
    • Enhance the Low-Income Housing Tax Credit (LIHTC);
    • Support initiatives that explicitly tie federal funding of infrastructure and other federal funding for “green” initiatives to local assurances to improve exclusionary zoning;
    • Reduce regulatory costs, including a broad range of fees, standards and other requirements imposed at different stages of the development and construction process; and,
    • Stabilize the GSEs to ensure appropriate liquidity in mortgage markets.
  • The Roundtable’s July 28 letter also noted the important role of institutional investors as a source of capital for affordable housing. The comments emphasized how FHFA should not disincentivize this important source of capital for expanding the housing infrastructure.

Coalition Comments

FHFA RFI response coalition graphic

  • The real estate coalition’s July 31 letter reiterated that the best way to help the nation’s renters find affordable housing is to keep the Enterprises focused on financing housing creation. The real estate organizations note that rental housing is already a heavily regulated industry that should not be subject to a one-size-fits-all set of new “protections” that conflict with the unique housing needs of individual markets.  
  • National Multifamily Housing Council President Sharon Wilson Géno said, “When we have market dynamics like we do now, where we have really high interest rates and difficulty accessing capital, the GSEs are even more important. If they start putting mandatory restrictions and rent caps on their products, people are going to go back into that private market at higher cost, and that’s going to increase rent and decrease affordability.” (PoliticoPro, Aug. 1)

This week, Senate Banking Chair Sherrod Brown (D-OH) and 17 Senate Democrats also responded to the FHFA by supporting rent increase limits and other tenant measures on properties with federally backed loans from the GSEs. (Senate Banking Committee letter, Aug. 1)

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Fannie, Freddie Regulator to Propose New Affordable Housing Rules, Takes Steps Away from LIBOR and Toward Privatization of GSEs

Posted on by Trey Jackson

Mark-Calabria-RER_8953x475

The federal regulator of Fannie Mae and Freddie Mac – the Government Sponsored Enterprises (GSEs) who own or guarantee $5.6 trillion in single and multifamily mortgages – will propose new affordable housing requirements and duty-to-serve plans this year. 

  • Federal Housing Finance Agency Director Mark Calabria, above, told Politico this week that the regulator’s Division of Research and Statistics will first study how effective the current rules have been, which expire at the end of 2020.   “I don’t know whether they’ve (the requirements) made a difference in getting anybody into a home who wouldn’t have been otherwise; I mean unless you have a strong evaluative function, how do you know whether what you’re doing makes a difference?” Calabria said.    (PoliticoPro, Feb. 10)
  • Calabria also discussed the timeline for when Fannie and Freddie will stop acquiring adjustable rate mortgages tied to the London Interbank Offered Rate (LIBOR) as loans will begin to be tied to the Secured Overnight Financing Rate (SOFR) as the global benchmark for interest rates.  FHFA’s steps away from LIBOR will include:

*  New language will be required for single-family Uniform Adjustable Rate Mortgage (ARM) instruments closed on or after June 1, 2020;  

*  All LIBOR-based single-family and multifamily ARMs must have loan application dates on or before September 30, 2020 to be eligible for acquisition; and,

*  Acquisitions of single-family and multifamily LIBOR ARMs will cease on or before December 31, 2020.

  • “These steps represent important milestones in the Enterprises’ transition away from LIBOR to a more robust reference rate.  We will continue to monitor exposure to LIBOR and ensure the Enterprises manage the risks associated with the transition in a safe and sound manner,” said Calabria.  (FHFA news release, Feb. 5)
  • FHFA also continues to take steps toward recapitalizing Fannie and Freddie before returning the GSEs to private ownership after their $190 billion government bailout in 2008.  Calabria announced on Feb. 3 that FHFA has selected Houlihan Lokey Capital, Inc. as a financial advisor to assist in the development and implementation of a roadmap to responsibly end the GSEs conservatorships. 
  • Houlihan Lokey will consider business and capital structures, market impacts and timing, and available capital raising alternatives, among other items as outlined in a previously published Statement of Work.

  • “Hiring a financial advisor is a significant milestone toward ending the conservatorships of the Enterprises,” Calabria said. “The next major milestone for FHFA is the re-proposal of the capital rule, which will happen in the near future.”  (FHFA news release, Feb. 3)
  • Director Calabria spoke during The Real Estate Roundtable’s Jan. 28, 2020 State of the Industry Meeting in Washington.  He addressed his agency’s need to responsibly privatize Fannie and Freddie while ensuring sufficient private capital is in place to protect taxpayers, along with access to affordable rental housing.

The Roundtable wrote to the leadership of the Senate Committee on Banking, Housing and Urban Affairs in September 2019 regarding reform of the nation’s house finance system.  The letter notes the Treasury Department’s constructive proposal for both legislative and administrative reforms to the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, and urges both Treasury and the FHFA to work with Congress to end conservatorship through comprehensive, bipartisan, legislative reforms.  (Roundtable GSEs comment letter, Sept. 9, 2019)

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Trump Administration Allows Fannie, Freddie to Retain Earnings in Move Toward Privatization

Posted on by Trey Jackson

Fanne Mae and Freddie Mac logos

The Trump Administration took a key step on Sept. 30 to release Fannie Mae and Freddie Mac from conservatorship by allowing them to retain a total of $45 billion in earnings annually. (Wall Street Journal, Sept. 30)

  • Fannie and Freddie received $191 billion in government support during the financial crisis, but since entering conservatorship Sept. 6, 2008, they have paid the Treasury $292 billion in dividends, according to research from Keefe, Bruyette & Woods. (Reuters, March 27)
  • Under their modified governing agreements, Fannie Mae will now be allowed to retain $25 billion and Freddie Mac $20 billion annually (Bloomberg, Sept. 30)
  • The Treasury Department and Federal Housing Finance Agency (FHFA) jointly announced the modifications to the Government-Sponsored Enterprises’ (GSEs) Preferred Stock Purchase Agreements (PSPAs) – designed in the wake of the financial crisis to ensure Fannie and Freddie maintain positive net worth, meet outstanding obligations and continue providing liquidity to the multi-trillion dollar mortgage market.  (Fannie Mae Capital Agreement and Freddie Mac Capital Agreement)
  • “These modifications are an important step toward implementing Treasury’s recommended reforms that will define a limited role for the Federal Government in the housing finance system and protect taxpayers against future bailouts,” said U.S. Treasury Secretary Steven T. Mnuchin. (Treasury news release, Sept. 30)
  • FHFA Director Mark Calabria – Fannie and Freddie’s chief regulator – stated, “FHFA commits to working with Treasury in the coming months to amend the share agreements and further advance broader housing finance reform. These reform goals include limiting the government’s role in housing finance, increasing marketplace competition, focusing on affordable housing, and sustainable homeownership. The status quo is not an option. Now is the time to act.”
  • The Washington Post reported on Oct. 2 that Fannie, Freddie, and the Federal Housing Administration guarantee 33 percent more debt than before the housing crisis,  more than at any other point in U.S. history.
  • In Congress, Senate Banking Committee Chairman Mike Crapo (R-ID) on Feb. 1 released an outline for reforming the nation’s housing finance system, including the GSEs (Crapo Statement and Housing Reform Outline, Feb. 1).  At the end of March, Crapo’s committee held two days of hearings on reforming the multi-trillion dollar housing finance markets.  (Roundtable Weekly, March 29)

The Real Estate Roundtable and 27 industry organizations on March 1 submitted principles for reforming the GSEs.  The letter emphasized that compelling evidence must show the private market is capable of an expanded role before efforts are made to reduce the GSEs’ current housing finance footprint. “Ultimately, we believe any reform, be it administrative or legislative, must seek to further two key objectives: 1) preserving what works in the current system, while 2) maintaining stability by avoiding unintended adverse consequences for borrowers, lenders, investors, or taxpayers.”  (Roundtable Weekly, March 1)

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Senate Confirms Mark Calabria as FHFA Director Overseeing Fannie Mae and Freddie Mac

Posted on by Trey Jackson

The Senate yesterday confirmed Mark Calabria, previous chief economist to Vice President Mike Pence, as director of the Federal Housing Finance Agency (FHFA) – the federal regulator overseeing Fannie Mae, Freddie Mac and the multi-trillion dollar Federal Home Loan Bank System. 

The Senate yesterday confirmed Mark Calabria, previous chief economist to Vice President Mike Pence, as director of the Federal Housing Finance Agency (FHFA) – the federal regulator overseeing Fannie Mae, Freddie Mac and the multi-trillion dollar Federal Home Loan Bank System.

  • Calabria will now have broad influence over reshaping the role of the Government Sponsored Enterprises (GSEs) brought under government conservatorship during the financial crisis. 
  • Senate Banking Committee Chairman Mike Crapo (R-ID) said on the Senate floor yesterday that Calabria “committed to working with me, and other members of this body, to reach a comprehensive solution on ending the conservatorship of Fannie and Freddie, once and for all.  He agrees with me, and many others, that action on housing finance reform is the prerogative of Congress, and that after over a decade of conservatorship, it is long overdue.”  (Politico, April 4) 
  • Sen. Crapo and President Trump last week launched separate efforts aimed at reforming the multi-trillion-dollar financial market for single-family and multifamily mortgages, including the GSEs’ Fannie Mae and Freddie Mac.  Chairman Crapo’s  recent housing reform outline proposes to return the GSEs to private control.  (Roundtable Weekly, Feb. 8) 
  • Sen. Crapo will be a featured speaker at next week’s Spring Roundtable Meeting in Washington. 
  • President Trump last week released a presidential memo directing “the Secretary of the Treasury and the Secretary of Housing and Urban Development to craft administrative and legislative options for housing finance reform.”  (Wall Street Journal, March 27) 
  • President Trump also aims to end the GSEs’ conservatorship, “promote competition in the housing finance market … create a system that encourages sustainable homeownership and protects taxpayers against bailouts.”  The memo supports the preservation of the 30-year fixed-rate mortgage. ( White House announcement, March 27) 
  • A coalition of 23 national real estate organizations, including The Real Estate Roundtable, sent a letter supporting Calabria’s confirmation this week to Senate leadership.  (Coalition confirmation support letter, April 1) 

The Real Estate Roundtable and 27 industry organizations last month submitted principles for reforming the GSEs. (Roundtable Weekly, March 1) 

Senate Banking Committee and President Trump Launch Efforts to Address Housing Finance Reform, Including GSEs

Posted on by Trey Jackson

Senate Banking Committee Chairman Mike Crapo (R-ID) and President Trump this week launched separate efforts aimed at reforming the multi-trillion-dollar financial market for single-family and multifamily mortgages, including the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac.

Senate Banking Committee Chairman Mike Crapo (R-ID) held hearing this week on reforming the multi-trillion-dollar  housing finance markets. 

  • Two days of hearings before the Senate Banking Committee concluded Wednesday, with twelve witnesses testifying about Chairman Crapo’s recent housing reform outline – a proposal that would return the GSEs to private control.  (Roundtable Weekly, Feb. 8)
  • Crapo stated during the hearing, “This outline sets out a blueprint for a permanent, sustainable new housing finance system that: protects taxpayers by reducing the systemic, too-big-to-fail risk posed by the current duopoly of mortgage guarantors; preserves existing infrastructure in the housing finance system that works well, while significantly increasing the role of private risk-bearing capital; establishes several new layers of protection between mortgage credit risk and taxpayers; ensures a level playing field for originators of all sizes and types, while also locking in uniform, responsible underwriting standards; and promotes broad accessibility to mortgage credit, including in under-served markets.” (Senate Banking Committee,  Day One Testimony and Day Two Testimony)

    The Real Estate Roundtable and 27 industry organizations on March 1 submitted principles for reforming the (GSEs).

  • Following the hearings, President Trump released a presidential memodirecting “the Secretary of the Treasury and the Secretary of Housing and Urban Development to craft administrative and legislative options for housing finance reform.”  (Wall Street Journal, March 27)
  • President Trump aims to end the GSEs’ conservatorship, “promote competition in the housing finance market … create a system that encourages sustainable homeownership and protects taxpayers against bailouts.”  The memo also calls for the preservation of the 30-year fixed-rate mortgage. (White House announcement, March 27)
  • The GSE’s received $191 billion in government support during the financial crisis, but since entering conservatorship, they have paid the Treasury $292 billion in dividends,  according to research from Keefe, Bruyette & Woods  (Reuters, March 27)

The Real Estate Roundtable and 27 industry organizations on March 1 submitted principles for reforming the (GSEs).  The coalition’s letter was sent to Acting Federal Housing Finance Agency (FHFA) Director Joseph Otting and Washington policymakers days after the Senate Banking Committee advanced the nomination of Mark Calabria as FHFA Director.  (Roundtable Weekly, March 1)

Calabria is awaiting full Senate confirmation, which is expected soon.