Washington, DC – Today, in reaction to an agreement on housing finance reform released by Senate Banking Committee Chairman Tim Johnson and Ranking Member Mike Crapo, NCRC President and CEO John Taylor made the following statement:
“We are encouraged that the principles for housing finance reform agreed upon by Senate Banking Committee Chairman Tim Johnson and Ranking Member Mike Crapo include facilitating “broad availability of mortgage credit for all eligible borrowers.” The inclusion of a market-based incentive to serve underserved areas in their agreement is promising, and mirrors a proposal put forth by NCRC, but the details will be critical. We look forward to reviewing the forthcoming bill.”
“A continued concern for NCRC is the inclusion of a 5% downpayment requirement for borrowers other than first-time homebuyers, which would negatively impact underserved communities.”
In August of 2013, NCRC released a white paper on GSE reform called “A Guarantee for the Guarantee: Two Proposals to Ensure that the Future Secondary Mortgage Market Serves All Creditworthy Borrowers.” The paper introduced two policy proposals designed to promote access and ensure that the future secondary mortgage market serves all creditworthy borrowers through conventional lending.
The first proposal is called the “Status Quo Access Model,” and applies the existing requirements of GSE affordable housing goals to any future secondary market entity.
Alternatively, the second proposal, the “Incentive Model,” introduces a sliding-cost scale tied to a secondary market entity’s business activities that address unmet housing needs. See the paper here.
About the National Community Reinvestment Coalition (NCRC):
The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America’s working families.