The Federal Housing Finance Agency (FHFA) yesterday approved new refinance options for low-income borrowers, allowing Fannie Mae and Freddie Mac (government sponsored enterprises, or GSEs) to offer new loan products that will bring lower interest rates and lower monthly payments within reach for more lower-income households.
Jesse Van Tol, CEO of the National Community Reinvestment Coalition (NCRC), made the following comment:
“We are pleased to see FHFA opening the door to allow Fannie and Freddie to offer more refinance options for lower-income households and families of color. Too many of these families are missing the opportunity to reduce their interest rate and lower their monthly payments. Fannie and Freddie should be leading the market here to ensure that more conventional products are affordable and accessible to these households.
“We remain concerned that Fannie and Freddie failed to purchase enough refinance loans in 2020 to benefit low-income families and families of color, and the companies will barely meet or may fail to meet their affordable housing goals in this area. We also believe that the caps on the GSEs refinance business included in the January amendments to their Preferred Stock Purchase Agreements will limit the reach of these new products.”