ABA Offers Feedback on Potential Changes to GSE Housing Goals

In a letter to the Federal Housing Finance Agency today, the American Bankers Association cautioned against using housing goals for Fannie Mae and Freddie Mac as a proxy to reduce the GSEs’ purchase of certain loan types in an effort to shrink their overall footprint. ABA’s letter came in response to a recent advance notice of proposed rulemaking, which signaled that FHFA is considering potential reduction in the housing goals credit awarded to Fannie and Freddie.

“[FHFA Director Mark] Calabria has been clear that he believes more of the market currently served by the GSEs should instead be served by other channels, including the Federal Housing Administration and private lenders,” the letter said. “ABA shares that view. However, we believe that determination of the Enterprises’ footprint is a public policy matter best decided by Congress.”

ABA also expressed opposition to further restricting loan purchases or expanded eligibility exclusions based upon safety and soundness, acceptable lending standards, or loan “sustainability” and urged FHFA to proceed with caution when looking into gentrification issues. The letter also addressed whether housing goals should be adjusted to consider properties located in Opportunity Zones, and whether housing goals have helped expand low income homeownership.