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Executive Summary

  • The Federal Housing Finance Agency (FHFA) has suspended restrictions from earlier this year that prevented the government-sponsored enterprises (GSEs) from purchasing “high-risk” mortgages; it also announced a proposal to reduce the amount of regulatory capital the GSEs would be required to hold.
  • While clearly in line with the Biden Administration’s goals of expanding home ownership, mortgage availability does not represent the greatest threat to home ownership—house prices and housing inventory do.
  • Expanding the GSE footprint and increasing the risk held in their portfolios would undo the rare progress made by the previous administration in the direction of housing market reform, at the worst possible time, in an overheated housing market, amid the effects of the pandemic, and while the GSEs remain in conservatorship.

Read more: https://www.americanactionforum.org/insight/fhfa-reverses-previous-housing-market-reform-progress/#ixzz76rylRnee
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