Realtor.com: Can Fannie and Freddie provide a jolt to buyers desperate for affordable housing?

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.”

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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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