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NCSHA’s Summary of Treasury and HUD Housing Finance Reform Plans

Published on September 6, 2019

Executive Summary

The U.S. Treasury Department and the Department of Housing and Urban Development (HUD) late yesterday sent to President Trump their respective proposals for reforming the housing finance system. Both plans, which respond to an executive memorandum issued by Trump in March, include a mix of legislative and administrative proposals for reform. This memorandum summarizes the plans and highlights key aspects of them. We are still assessing their potential impact on HFAs and how NCSHA will comment and respond in our advocacy activities.

Treasury’s plan focuses on removing the government-sponsored enterprises Fannie Mae and Freddie Mac from conservatorship and establishing a new competitive secondary housing finance market. HUD’s plan outlines potential changes to the Federal Housing Administration (FHA) and Ginnie Mae that HUD says will ensure the agencies responsibly meet their affordable housing missions. Included in HUD’s plan are several proposals pertaining to down payment assistance provided with FHA-insured mortgages.

Combined, the plans include 116 different proposed policy changes (49 from Treasury, 67 from HUD). Many of the plans’ more substantial provisions would have to be enacted by Congress, which appears unlikely this Congress. While there are many noteworthy changes the Administration believes could be enacted administratively by either FHA or the Federal Housing Finance Agency, the plan does not specify if and when these agencies intend to carry out these proposals.