In a letter, the American Bankers Association said that while it supports Federal Housing Finance Agency efforts to streamline and reduce administrative burdens in its Duty to Serve Program, it cautioned against removing guardrails that prevent Fannie Mae and Freddie Mac from crowding out the private market.
Under federal law, Fannie and Freddie have a “duty to serve” the manufactured housing, affordable housing preservation and rural housing markets. FHFA has proposed rescinding its current DTS regulation and replacing it with new rulemaking that the agency says would allow both government-sponsored enterprises to serve the needs of very low-, low- and moderate-income families.
ABA said it backs FHFA’s efforts to modernize the DTS framework and encourage innovation. Still, the association noted that it has long emphasized that Fannie and Freddie should complement — rather than displace — private-sector lending. It also said the agency should ensure the enterprises avoid offering products and programs too similar to those offered by other federal agencies, such as Veterans Administration and the Department of Agriculture.
“We encourage the FHFA to finalize a rule that balances flexibility with clear expectations, maintains strong accountability, and supports continued collaboration between the enterprises and banks,” ABA said.
