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Housing Regulator’s New Capital Rule for Fannie Mae and Freddie Mac Increases Cost of Homeownership

Thursday, November 19, 2020
Nikitra Bailey

Impact felt most by lower wealth families and families of color

WASHINGTON, D.C. – Late yesterday, the Federal Housing Finance Agency (FHFA) released its final rule on capital requirements for Fannie Mae and Freddie Mac, the Government-Sponsored Enterprises (GSEs) that FHFA oversees and that provide financial backing for half of all mortgages in America.

Center for Responsible Lending (CRL) Executive Vice President Nikitra Bailey released the following statement:

During the Financial Crisis, taxpayers stepped in to save Fannie Mae and Freddie Mac. The GSEs were rescued and receive ongoing public support because they have an important public mission: promoting access to safe and affordable mortgage credit in all regions of the country. This mission entails statutory and charter obligations to serve underserved lower wealth borrowers, including Black, Latino, and other families of color.

The FHFA’s new capital rule places the burden of future catastrophic risk on the backs of these hardworking families and will unnecessarily raise the cost of mortgages for all borrowers, resulting in limited credit availability. The rule pushes homeownership farther away from families of color long denied mortgage credit access.

Additional Background

This final rule is little changed from the proposed rule released in September. The CRL joined with civil rights and consumer groups in submitting a public comment letter on that proposal.

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Press Contact: matthew.kravitz@responsiblelending.org