Home financing titans Fannie Mae and Freddie Mac was told by their regulator that they need to give more help and support to Americans who are low wage earners in their bid to get mortgages and refinancing their home loans. In a post in cnbc.com, the two government-owned firms were given directives by the Federal Housing Finance Agency for 2015-2017 to widen the coverage of people who have access to housing credit. The directive requires Fannie Mae and Freddie Mac to increase the quantity of loans they finance for low-income families up to 24 percent from the amount they spend on single-family home purchase mortgages in the period of coverage. This was increased from 23 percent in 2014.
In the same report, the FHFA also tasked both firms to allot a bigger share of their refinancing purchases to mortgages refinanced by low-income families and to significantly raise the number of mortgages they purchase for multi-family housing each year. It can be recalled that Fannie Mae and Freddie Mac were placed under government control when the housing market crashed in 2008 and they were bailed out using taxpayer's money.
While the move was welcomed by many, some sectors still find the action lacking. In a report in wsj.com, housing advocates say they find the final rule to be disappointing. John Taylor, president of the National Community Reinvestment Coalition said "I would have to say that Mel Watt has raised the bar for entry into homeownership for working poor people. It's not a good thing."
Another group, Center for American Progress, said that upon first impression, the ruling strikes them that the FHFA lost the chance to force Freddie and Fannie to invest more money and work in underserved areas. FHFA Director Me Watt issued a statement saying "These goals establish a solid foundation for affordable and sustainable homeownership and rental opportunities in this country."