GSEs to Prepare for Exit from Conservatorship Under New FHFA Strategic Plan

The Federal Housing Finance Agency today released its updated strategic plan for Fannie Mae and Freddie Mac, outlining three broad objectives for the GSEs including preparing for their eventual exit from conservatorship. The strategic plan is aligned with the housing reform plans put forth by the Treasury Department and the Department of Housing and Urban Development earlier this year.

Under the plan, the GSEs will work toward developing and implementing FHFA-approved strategies to ensure the efficient use of capital. “A fundamental precondition to ending the conservatorships is that the Enterprises build their capital to levels commensurate with safety and soundness,” FHFA noted. “Returning decision making to private capital that both earns the rewards and bears the risks of the enterprise businesses will protect taxpayers and support market discipline that serves homeowners, borrowers, and renters.”

In addition, the GSEs will continue to focus on their core mission of fostering competitive, liquid, efficient and resilient national housing finance markets—including through supporting the development of a new QM standard that could be equally applied to all market participants without special advantages for the GSEs. Fannie and Freddie will also continue to ensure they operate in a safe and sound manner, FHFA said.