President Biden’s choice has pleased mortgage industry and affordable housing advocates, who were largely critical of FHFA policy under conservative Mark Calabria.
Fewer small-dollar mortgages over the past 20 years kept many low-income consumers from entering the homebuying market, according to participants at a webinar hosted by New America.
The House Committee on Rules recently unveiled text for the $1.75 trillion Build Back Better legislative framework, which would include $10 billion for a new first-generation downpayment assistance fund.
Mortgage industry stakeholders are on the same page with affordable housing and minority rights groups, at least when it comes to the FHFA’s proposal to require Fannie and Freddie to have concrete plans to improve equity in mortgage lending.
While some conservative and moderate Democrats have hinted that they’ll accept a substantially smaller infrastructure bill than originally planned, other key members of the party say housing must be part of the package.
The Downpayment Toward Equity Act, sponsored by Sen. Raphael Warnock, D-GA, would grant up to $25,000 in assistance to first-generation homebuyers. Its fate, though, depends on the final size of the Build Back Better Act.
The key concern among the industry is the GSEs’ reliance on loan-to-value ratios and debt-to-income ratios. They recommend Fannie and Freddie develop alternative underwriting criteria for low-income borrowers.
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