NCRC insists that any GSE reform must protect affordable housing goals

This week, President Trump released a statement calling for the end to the conservatorship of Fannie Mae and Freddie Mac (GSEs).

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

“NCRC supports ending the conservatorship of Fannie Mae and Freddie Mac. However, we are concerned that the fundamental restructuring of the housing finance system contemplated by this White House memorandum and Chairman Crapo’s outline will set in motion further limits on those who have access to the system today.

“There is an affordable housing crisis in this country, and the homeownership rate is near a historic low. The gap between white and African-American homeownership is the largest it has ever been. And, there appears to be a lack of vision in the president’s statement about how to address these pressing challenges.

“The nation’s policymakers are at a critical juncture that will determine how low- and moderate-income borrowers and communities of color access conventional mortgage credit that is affordable. The housing finance reform being discussed by the White House and the Senate could increase mortgage rates and fees for many borrowers; dampen outreach and loan products targeted to underserved market segments (people with student loan debt, minorities and low-income borrowers and communities) and limit the partnerships developed with key stakeholders in those communities that facilitate access to mortgage credit and to homeownership. Millions of Americans could lose access if housing finance reform is done wrong.

“The Administration’s proposed elimination of the Housing Trust Fund and Capital Magnet Fund and FHFA’s delay in making the 2018 contributions to those funds is a bad omen for what is on the horizon for affordable housing. Any GSE reform that abolishes or weakens the GSE’s affordable housing obligations, including their affordable housing goals, will be disastrous for young and low- and moderate-income (LMI) Americans.

“The memo also calls for more competition in housing finance. While we support GSE reform, there should be broad and bipartisan opposition to any efforts that introduce less regulated competitors, fragment the nation’s mortgage market, gut the affordable housing goals or eliminate opportunities for hard-working Americans to obtain the American dream of homeownership. ”

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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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