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The Wall Street Journal’s editorial board has accused the Biden administration of using the Federal Housing Finance Agency (FHFA) as part of its re-election efforts to win the support of the housing industry.

In an editorial titled “Biden’s New Gift to the Housing Lobby,” the Journal’s editors demanded to know why the FHFA “is raising the government guarantee for single-family mortgages backed by Fannie Mae and Freddie Mac this year by 5.6% to $766,550 and $1,149,825 in ‘high-cost’ areas such as coastal California, New York City, and Washington, D.C. Why is Washington standing behind homes in Menlo Park?”

In stating its disapproval, the editorial board recalled the original mission for the government-sponsored enterprises was “to make housing more affordable for the middle class, not finance mortgages for the relatively affluent.” It also noted the decline in median home sale prices during the third quarter of 2023 and argued the FHFA’s action is “letting borrowers who enroll in Mr. Biden’s sweetened income-based repayment qualify for bigger mortgages. Borrowers who can’t afford to repay their student loans—or simply don’t want to—can get their monthly payments capped at 5% of their discretionary income. Those with incomes below $33,885 don’t have to pay a penny.”

Ultimately, the editorial board concluded, “supportive government housing policies have pushed up home prices,” while adding that the “main beneficiaries are the housing lobby, and the election-year timing is no coincidence.”

Photo by Gage Skidmore / Flickr Creative Commons

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