Report: Eliminate Freddie, Fannie and increase private involvement in housing

In the last Congress, Corker introduced legislation to unwind Fannie and Freddie.

{mosads}Sixteen months in the making, the report provides a blueprint for how private-sector financing will play a greater role in bearing credit risk and providing mortgage funding while ramping up taxpayer protections. 

“The report is a strong one, which I believe charts a course for a much-needed return of the private market to housing finance. It also states where government involvement is needed — it is explicit, paid for and limited,” said Frank Keating, American Banking Association president and CEO, who is a member of the group.

The plan also reworks how federal rental subsidies are distributed by focusing on the nation’s most vulnerable households and rewarding providers who demonstrate strong results at the state and local levels with increased flexibility in program administration. 

“We are pleased that the Commission recognizes that private capital must play a larger role in any future housing finance system, and that there is a role for clearly defined government involvement in housing,” said John Dalton, president of the Financial Services Roundtable’s Housing Policy Council (HPC).

“Gaining perspective from a diverse group of housing market stakeholders, including the Housing Policy Council, is an appropriate step toward comprehensive reform of the secondary mortgage market,” Dalton said.

The proposal calls on preserving and expanding the Low Income Housing Tax Credit program to increase the supply of affordable rental housing. 

For first-time home buyers, the report suggests housing counseling to prepare for homeownership.  

The report highlights the challenges and opportunities for housing providers amid the growing senior population, that will help seniors “age in place” and integrate housing with healthcare and other programs.

For the one-third of people who live in rural areas, the commission recommends continued support for homeownership and rental assistance in those communities.

The BPC launched the Housing Commission in October 2011 to develop a new vision for federal housing policy led by former Senate Majority Leader George Mitchell (D-Maine), former Sen. Kit Bond (R-Mo.), former Sen. and HUD Secretary Mel Martinez (R-Fla.) and former HUD Secretary Henry Cisneros, and includes 17 others.