The FHFA’s Equitable Housing Finance Plans for Fannie Mae and Freddie Mac: Equity Should Be a Primary Business Consideration for the GSEs

Brief

The FHFA’s Equitable Housing Finance Plans for Fannie Mae and Freddie Mac: Equity Should Be a Primary Business Consideration for the GSEs

Abstract

This brief offers a conceptual reframing of the Federal Housing Finance Agency’s new Equitable Housing Finance Plan (EHFP). The EHFP is the latest effort to ensure the GSEs fulfill their mission to serve low- and moderate-income families and underserved populations. The FHFA’s action is important to address homeownership disparities and to better serve future homebuyers, who will increasingly be people of color. Furthermore, the goals and objectives of these plans, as outlined by the FHFA, are commendable. However, addressing the systemic issues within the housing finance system requires viewing these issues holistically. The EHFP is vulnerable to becoming another ad hoc planning requirement when it could be an “equity overlay” that blankets all aspects of GSE policies, processes, and practices, making equity another one of the GSEs’ primary business objectives. This brief reimagines the EHFP and offers three recommendations and guidance on its implementation.

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