Bold leadership is needed at FHFA to address access to credit, affordable housing crisis

Today, the U.S. Supreme Court held that a 2008 law prohibiting the president from replacing the director of the Federal Housing Finance Agency (FHFA) is unconstitutional. FHFA is the conservator and primary regulator for Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs).

Following news of the U.S. Supreme Court’s decision, the Biden administration is expected to nominate a new director to replace FHFA Director Mark Calabria, an appointee of the Trump administration.

Jesse Van Tol, CEO of the National Community Reinvestment Coalition (NCRC), made the following statement:

“This is a pivotal moment for Fannie Mae and Freddie Mac, for the mission in their charters, and the role they can and must play in facilitating access to affordable housing and affordable mortgage credit for low- and moderate-income (LMI) households, for families and communities of color and rural communities. The scale of the affordable housing challenges facing the nation both in terms of the supply of new and existing affordable housing and access to affordable and sustainable mortgage credit cannot be met without strong leadership from the GSEs.

“The next director of FHFA must embrace the administration’s overall commitment to racial equity, and among other steps, stake out a regulatory framework that supports a robust role for the GSEs in helping to close the Black-White homeownership divide sustainably. In addition to their loan purchases from lenders in the primary mortgage market, the GSEs must provide far more market leadership by developing loan products, making investments and conducting outreach targeted at borrowers and communities of color as well as lower-income and rural communities.  

“The administration and the next director must also act immediately to revisit a number of recent policies that undermine the role of the GSEs in the market, mortgage rates and mortgage products, including the December rule around their capital requirements and the program and product restrictions included in the January amendments to the FHFA-Treasury Preferred Stock Purchase Agreements (PSPAs).”

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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