Schick comes to this new role with more than 27 years of experience as a leader working with real estate agents.
Fannie Mae, Freddie Mac Release Equitable Housing Finance Plans to Address Racial Homeownership Gap
WASHINGTON—The Federal Housing Finance Agency released Fannie Mae’s and Freddie Mac’s Equitable Housing Finance Plans for 2022-2024 that the agency said are designed to complement initiatives that promote the Enterprises’ safety and soundness and foster housing finance markets. The plans, which were released on June 8, are intended to provide equitable access to affordable and sustainable housing and address the racial and ethnic gap in homeownership in the United States.
“The Equitable Housing Finance Plans represent a commitment to sustainable approaches that will meaningfully address the racial and ethnic disparities in homeownership and wealth that have persisted for generations,” said FHFA Acting Director Sandra L. Thompson. “We look forward to working with the enterprises, lenders, and other housing industry participants to further develop the ideas described in these plans.”
The National Association of Realtors applauded the equity plans that are intended to “address barriers experienced by renters, aspiring homeowners, and current homeowners before, during, and after getting a mortgage” and include actions to address financial education, access and costs.
National Association of Realtors President Leslie Rouda Smith stated, “NAR applauds the FHFA’s long-term plan to bring historically underserved groups into homeownership through innovative equity solutions. The homeownership gap is a result of more than a century of problematic practices and will take years of refinement, application, and tenacity to resolve.”
Smith added, “NAR looks forward to these plans playing a key role in closing the homeownership gap and commends Director Thompson for taking this bold action. Homeownership is a centerpiece of the American dream, and the enterprises play an important role in achieving that dream.”
Freddie Mac’s Plan, covering 2022-2024, seeks to advance equitable and sustainable housing and rental opportunities while ensuring safety and soundness. The plan sets ambitious goals, outlines actions to achieve those goals and includes annual progress reports.
“Freddie Mac’s Equitable Housing Finance Plan lays out meaningful actions designed to help make home possible and sustainable for more renters, buyers and homeowners, particularly in traditionally underserved communities,” said Michael DeVito, CEO of Freddie Mac. “Our multi-pronged approach reinforces Freddie Mac’s commitment to working across the housing industry to support opportunities for more Black and Latino families to access the American Dream. We are pleased to report that this work is already underway.”
Freddie Mac’s plan calls for action in five key areas:
• Addressing the homeownership gap. Freddie Mac will fully explore the use of the Special Purpose Credit Program (SPCP) framework to purchase loans originated through new or existing lender SPCPs. Under federal law, lenders may offer special underwriting or pricing for traditionally disadvantaged groups as part of a SPCP.
• Strengthening investment within formerly redlined areas. Freddie Mac’s plan includes efforts to increase support for underserved renters and multifamily borrowers; expand financing for affordable housing developers and help Community Development Financial Institutions, minority depository institutions and smaller banks with improved access to capital.
• Financing the creation and preservation of affordable housing. The plan seeks to leverage public and private investments to create and preserve single-family and multifamily housing. Freddie Mac plans to expand utilization of its renovation products to preserve the aging stock of affordable single-family homes, which are particularly prevalent in communities of color.
• Increasing opportunities for renters. Under the plan, Freddie Mac will expand on the company’s multifamily tenant credit-building initiative with new tools aimed at encouraging financial empowerment and wealth-building. The company will also build on its efforts to leverage market-based incentives to preserve affordable rents and promote social services. This can help narrow the gaps in social and economic mobility that often impact renters, particularly Black and Latino households.
• Helping to eliminate disparities among Black and Latino communities. The plan introduces several new initiatives aimed at improving access to capital for emerging diverse multifamily developers to increase wealth-building opportunities and enhance the ability for people to invest in and grow their communities.
Fannie Mae’s Equitable Housing Finance Plan focuses on empowering Black renters and homeowners in three key areas:
• Housing Preparation: Helping Black consumers prepare early for sustainable homeownership and access to quality rental housing through credit building and financial education.
• Buying or Renting: Removing unnecessary obstacles Black people face in shopping for, acquiring, renting or mortgaging a home.
• Moving in and Maintaining: Enhancing sustainable homeownership so that renters and homeowners can withstand disruptions or temporary hardships and remain stably housed.
“Our Equitable Housing Finance Plan lays the groundwork to meaningfully address housing barriers faced by Black renters and homeowners,” said David C. Benson, President and Interim Chief Executive Officer, Fannie Mae. “We want to knock down these barriers, one by one, doing our part to undo the legacy of discriminatory practices that perpetuate racial housing gaps in America. The plan is a solid step toward this goal and a milestone in our work to make housing stronger, fairer, and more sustainable for the people and communities we serve.”
In addition to addressing the effects of legacy discrimination against Black renters and homeowners, the Equitable Housing Finance Plan’s solutions will benefit all renters and homeowners, including other underserved populations, Fannie Mae stated. As the plan matures and evolves, Fannie Mae will expand its focus to the unique challenges faced by other populations, including Latino people and other groups who by virtue of their race, ethnicity, geographic location, or other characteristics have been historically underserved by the housing and mortgage finance system, the agency noted.