- While Fannie Mae and Freddie Mac continue to operate under government control, serious reform discussions are underway in Congress on the future of the U.S. housing finance reform system.
- In the aftermath of the housing downturn, investors have been reluctant to invest in mortgage securities without government backing.
- While the House of Representatives is considering legislation to completely remove the government role in the conventional mortgage market, the Senate is engaged in a bipartisan effort to preserve the federal support necessary for the proper functioning of the U.S. housing market.
- NAHB believes federal support is particularly important to the availability of an affordable 30-year fixed-rate mortgage, which has been a staple of the U.S. housing finance system since the 1930’s.
- Bipartisan legislation, S. 1217, the Housing Finance Reform and Taxpayer Protection Act of 2014, was recently passed by the Senate Banking Committee and would maintain a proper level of government support.
- S. 1217 would fix the nation’s flawed housing finance system and breathe new life into the housing sector by providing a consistent and affordable supply of mortgage credit for single-family and multifamily housing.
- S. 1217 would wind down Fannie Mae and Freddie Mac and ensure that a government backstop would only be triggered under extreme circumstances and after significant levels of private capital are first exhausted.
- Certainty that the government will continue to have a limited role in supporting a mortgage market predominantly filled by the private sector will ensure liquidity and stability for homeownership and rental housing.
We can no longer afford delay. Passage of comprehensive housing finance reform this year is critical to the economic recovery of our nation and the housing sector.