Realtor.com, March 22, 2018: Can Fannie and Freddie provide a jolt to buyers desperate for affordable housing?
Government-sponsored enterprises Fannie Mae and Freddie Mac are boosting support this year for three lower-cost housing options: rural homes, manufactured housing (such as trailers), and the very limited, existing stock of affordable homes.
Fannie and Freddie buy mortgages from lenders, which gives the lenders cash to make more loans. Fannie will buy up to about 5,000 additional new rural, single-family loans, while Freddie will purchase roughly 3,360 more new loans annually by the third year of the program.
“It’s unclear the impact it will have just yet. It’s new to the market, still unproven,” says Gerron Levi, director of policy and government affairs at the National Community Reinvestment Coalition, an umbrella group of affordable and fair housing groups and lending organizations. But “when Fannie and Freddie enter the market and tell lenders, ‘if you make the loan we will purchase it,’ it will facilitate access to credit to those markets. [Private] lenders will be more willing to make loans.”