Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBs) are government-sponsored enterprises (GSEs) that help bring capital to the housing markets. Their regulator is the Federal Housing Finance Agency (FHFA).
HFAs and the Housing GSEs
The GSEs are critical to providing liquidity, stability and affordability to the mortgage market, particularly for long-term, fixed-rate mortgage loans. Fannie Mae and Freddie Mac purchase and securitize mortgage loans from housing finance agencies (HFAs) and other lenders who then use the proceeds to finance more mortgage loans. The FHLBs provide advances and other financial products to support their members’ affordable housing activities.
Both Fannie Mae and Freddie Mac have done business with the HFAs to help support affordable single-family and multifamily housing opportunities. Both firms currently offer specific HFA-only, income-targeted products that allow HFAs to sell single-family loans with preferred terms.
Fannie Mae and Freddie Mac are both significant purchasers of Housing Credits. FHFA recently increased the amount of Housing Credit investments the GSEs are allowed to make to $1 billion each in 2024 from $850 million each in 2023.
Some HFAs have also partnered with the various FHLBs to finance their single-family and multifamily programs. HFAs are allowed to join their local FHLB branch as associate housing members.
Future of the GSEs
NCSHA supports a strong, healthy GSE system to ensure stability, liquidity, affordability, and equity in the home mortgage market. NCSHA supports a housing finance system with an explicit government guarantee, robust affordable housing goals, and a clear commitment to partnering with HFAs.
NCSHA also supports a robust FHLB system with a strong commitment toward supporting affordable housing and community development. In November 2023, FHFA released a comprehensive report on the FHLB system. The report outlines several regulatory proposals FHFA intends to pursue to ensure the FHLBs continue to fulfill their vital public mission. NCSHA looks forward to commenting on these proposals on behalf of the HFAs and their partners.
Moving forward, NCSHA will continue to work with Congress, FHFA, and other executive branch agencies to advocate for a future housing finance system that supports the housing needs of all Americans and encourages GSE-HFA partnerships.
Contacts:
- To find local housing assistance, please contact your state’s Housing Finance Agency (HFA).
- To learn more about NCSHA’s advocacy work in this area or to attend a related education event, complete the general inquiry form.
- Members of the media, please contact Lisa Bowman, Director of Marketing and Communications, at lbowman@ncsha.org.
