HUD Releases Analysis of GSE Performance by State
July 8, 2004
Data Shows Fannie Mae And Freddie Mac Have Trailed The Industry In Providing Affordable Housing In 44 States
WASHINGTON — The U.S. Department of Housing and Urban Development released data today giving a state-by-state breakdown of the performance of Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac. This data covering 1999-2002 shows that combined, the GSEs have lagged behind the primary market in 44 states in their commitment to provide affordable housing opportunities for low- and moderate-income families.
"While the GSEs met the affordable housing goals in 2002, they must further utilize their entrepreneurial talents and power in the marketplace to genuinely lead the mortgage finance industry as Congress intended,"said HUD Secretary Alphonso Jackson. "HUD recently proposed new housing goals, which over the next four years, would simply push the GSEs to do what is expected of them-helping low- and moderate-income families at least at the same percentage levels as primary market lenders."
HUD estimates that if the GSEs had matched the overall single-family market during this period, they would have acquired an additional 470,000 single-family loans for low- and moderate-income families. Focusing only on home purchase loans, if the GSEs had matched the market, they would have acquired an additional 264,000 loans for these families. Of these 264,000 home loans, approximately 94,000 would have been for first-time homebuyers with less-than-area-median income.
By statute, HUD sets the annual affordable housing goals that require a percentage of Fannie Mae and Freddie Mac's mortgage purchases to finance housing for low- and moderate-income borrowers, and borrowers in underserved areas.
In April, HUD proposed new federal regulations that would raise the GSEs targeted lending requirements. HUD estimates that over the next four years an additional one million low- and moderate-income families would be served as a result of the new goals.
The public comment period on this proposed rule was recently extended 15 days and will now end July 16. After consideration of comments received, HUD will publish a final rule before it takes effect in 2005.