July 22, 2010
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NCSHA submitted its paper on GSE reform to HUD and Treasury on July 21 and comments on Federal Home Loan Bank (FHLB) affordable housing goals and Fannie Mae and Freddie Mac’s duty to serve underserved markets to the Federal Housing Finance Agency (FHFA) on July 12 and 22.  NCSHA submitted its GSE reform paper in response to the Administration’s request for comments on a set of questions on the nation’s housing finance system.  The FHFA submissions responded to proposed rules it published for comment.

NCSHA’s GSE reform paper calls on the Administration and Congress to establish a powerful commitment to affordable housing within any future housing Government-Sponsored Enterprises (GSEs) or other secondary market entities and to build upon the productive partnerships the existing GSEs and HFAs have formed to expand housing opportunity throughout the country.  It further appeals to the Administration and Congress to direct future GSEs to prioritize the use of the proven HFA delivery system to fulfill this commitment in a safe and sound manner and to give HFAs a role in the governance of the GSEs. 

NCSHA’s letter on the proposed FHLB affordable housing goals urges the FHFA to eliminate or reduce its proposed mortgage purchase volume threshold so the goals will apply to more FHLBs and to expand the scope of the Federal Home Loan Banks’ (FHLB) affordable housing goals to additional FHLB housing finance activities.  The proposed rule would apply the new affordable housing goals to FHLBs that purchase $2.5 billion or more in mortgages under the Acquired Member Assets (AMA) program in a year.  The data FHFA included in its discussion of the proposed rule shows that if the proposed threshold had been in place over the last five years, the goals would only have applied to four FHLBs—none of them for more than one year, and never more than two in a single year.  For two years, no FHLB would have met the threshold.

NCSHA’s letter on Fannie Mae and Freddie Mac’s duty to serve underserved markets supports the efforts of the proposed rule to encourage the GSEs to increase their support of affordable housing activities in preservation, manufactured housing, and rural areas and the rule’s support of GSE partnerships with HFAs.  The letter also urges the FHFA to simplify the system for awarding credit for GSE Housing Bond and HFA-financed mortgage purchases and give GSEs credit for supporting HFA assistance to families that live in underserved rural areas not captured by the USDA rural area definition the rule proposes to apply to the GSEs’ duty to serve requirement.