The Federal Housing Finance Agency and the Treasury Department today announced they will delete provisions in the preferred stock purchase agreements governing the conservatorships of Fannie Mae and Freddie Mac that were previously suspended after multiple groups raised concerns about their effects on housing markets.
In 2021, FHFA and the Treasury Department placed limits on the government-sponsored enterprises’ ability to acquire loans with higher-risk features that may conflict with ongoing efforts to expand safe and sound affordable housing options. The agencies suspended the changes to the PSPAs after the American Bankers Association and other groups raised concerns about market disruptions caused by their implementation and the potential they had to hurt lower-income and credit-challenged borrowers. Today’s action eliminates the suspended provisions.
In addition, FHFA and the Treasury Department also announced they have agreed that the path to ending the conservatorships should be based on the financial condition of the GSEs and the potential effects of termination on the housing market, and have established a process for eventual public input on both topics.
“The enterprises play a vital role in the national housing finance system,” FHFA Director Sandra Thompson said. “Today’s announcement will reassure stakeholders that the enterprises’ eventual release from conservatorship will follow a methodical process intended to minimize disruption to the housing and financial markets.”
