Senator Mike Crapo (R-ID) released the Senate Banking, Housing, and Urban Affairs Committee’s agenda for the 116th Congress. A key piece of the agenda is to begin assessing proposals to reform the current housing finance system. Priorities include establishing appropriate levels of taxpayer protection, preserving the 30-year fixed rate mortgage, increasing competition among mortgage guarantors, and promoting access to affordable housing. The Chairman insisted perpetual conservatorship of the government sponsored entities (GSEs) Fannie Mae and Freddie Mac is not sustainable, signaling his intentions to release the enterprises from government control. Just three days after releasing the Committee’s agenda, Chairman Crapo released an outline for housing finance reform.
Under Representative Crapo’s outline, the GSE’s duty-to-serve requirements and affordable housing goals would be replaced with a new Market Access Fund providing grants, loans, and credit enhancements to underserved and low-income communities. The Market Access Fund, along with the national Housing Trust Fund and Capital Magnet Fund, would be collectively funded through an annual assessment of 10.0 basis points of total annual loan volume, although the precise funding levels for each program are not specified.
The Committee’s release of the housing finance reform outline comes on the heels of a MarketWatch report from January 19 claiming FHFA employees were told to expect a White House reform plan “within weeks,” implying the Trump administration would attempt to release the GSEs from conservatorship without Congressional input. The FHFA has since received letters from both the House and the Senate regarding critical next steps, and the White House appears to have walked back its initial intention to act unilaterally.
Senator Sherrod Brown (D-OH), the Committee’s ranking member, released the following statement on GSE reform: “I will fight to ensure that any efforts to reform the housing market start by addressing the affordability crisis that is hurting too many renters and homeowners across this country. Too often Congress and the White House have put Wall Street ahead of working people, and we cannot let that happen when it comes to the stability of our housing market. Failure to put working people first would threaten access to affordable homeownership and rental housing, put the viability of the 30-year mortgage at risk, and hit lower income communities, communities of color, and rural Americans particularly hard. The Banking Committee must hold hearings to carefully examine our housing market and listen closely to feedback provided by homeowners, renters, the Civil Rights community and lenders. I look forward to working with my colleagues.”
Senator Crapo’s press release on the agenda can be found at: https://bit.ly/2sYwu2H
The Committee press release on the outline can be found at: https://bit.ly/2S0Gszi
Read NLIHC President and CEO Diane Yentel’s testimony before the House Financial Services Committee on alleviating the affordable housing crisis through comprehensive housing finance reform at: https://bit.ly/2D1Gltc