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There’s movement in housing finance reform

Last week, we saw the first bipartisan movement on housing finance reform in many years. House Financial Services Committee Chairman Jeb Hensarling (R-Texas) joined Reps. John Delaney (D-Md.) and Jim Himes (D-N.Y.) to introduce the Bipartisan Housing Finance Reform Act. The approach would eliminate Fannie Mae and Freddie Mac, moving most of their functions into Ginnie Mae. It would not, however, include enforceable mechanisms to serve the entire market of renters and qualified homebuyers, including underserved markets and manufactured housing. 

Hensarling’s bill would also eliminate the Capital Magnet Fund (CMF) and the Housing Trust Fund (HTF), both of which were expanded in the last bipartisan effort to complete housing finance reform. These funds are desperately needed to address the housing affordability crisis and must be a part of any viable resolution. As longtime NHC board member and one of the national thought leaders on housing finance reform Barry Zigas noted, both Reps. Hensarling and Delaney are retiring from Congress at the end of 2018 and “there is no chance” their bill will advance “any time soon.”

So 10 years following the placement of Fannie Mae and Freddie Mac into conservatorship, housing finance reform remains the unfinished business of the Great Recession. It’s time for a new approach to housing finance reform – but not new principles. It is noteworthy that nearly five years after they were adopted, NHC’s housing finance reform principles are as relevant and timely as ever. These include a government guarantee of mortgage-backed securities to attract private capital, equal access for large and small lenders through multiple capital channels and targeted housing assistance mechanisms, including continued funding for the CMF and HTF.

Last week, NHC joined 28 national housing organizations to call for an end to conservatorship combined with legislation that locks in recent reforms for the GSEs. The statement, which NHC helped draft, urges policymakers to “protect taxpayers, provide liquidity and promote stability while taking care not to roll back aspects of the GSEs’ operations that are supporting the foundation of the housing market.” The statement was signed by a broad range of organizations including the Mortgage Bankers Association, the National Association of REALTORS®, the National Association of Home Builders, LISC, Enterprise Community Partners and the Center for Responsible Lending, among others. It made clear that any effort to change the existing role of the GSEs “must also include enforceable mechanisms to serve the entire market of renters and qualified homebuyers, including underserved markets and manufactured housing.”

It is increasingly clear that the only viable solution to this 10-year long stalemate may be to release the GSEs from conservatorship and amend their charters to ensure that we fix what remains broken in the housing finance system. This will require both bold action and bipartisan support. NHC is uniquely qualified to lead this effort, and we are asking our members to join us in a Housing Finance Reform Working Group to develop and execute a strategy to stabilize and revitalize our housing finance system. To join this initiative, email me directly at If you are not currently a member and would like to participate, you can join online here.

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