Twenty affordable housing organizations have sent a letter to the Federal Housing Finance Agency (FHFA) urging it to require Fannie Mae and Freddie Mac to substantially improve their Duty to Serve proposals before the regulator approves them. 

The Duty to Serve regulation requires Fannie Mae and Freddie Mac to facilitate housing opportunities in three areas: manufactured housing, affordable housing preservation, and rural housing. 

In May, under the prior FHFA director, the enterprises submitted mandatory three-year plans for how they will comply.

“Amid a housing affordability crisis that requires bold and aggressive action, Fannie Mae and Freddie Mac have set forth plans that fail to effectively reach those not served or not served well by the conventional mortgage market,” the organizations, united as the new Underserved Mortgage Markets Coalition, wrote in its letter to FHFA Acting Director Sandra L. Thompson.

The coalition urges FHFA to make regulatory changes to Duty to Serve.

In addition, the coalition supports FHFA’s new initiative requiring Fannie Mae and Freddie Mac to create plans to reduce racial or ethnic homeownership gaps and reinvest in formerly redlined neighborhoods.

“Solving our housing affordability crisis requires multiple actions by all levels of government and the private sector, and an invigorated role for Fannie Mae and Freddie Mac is one of them,” said George W. “Mac” McCarthy, president of the Lincoln Institute of Land Policy, convener of the coalition. “The Underserved Mortgage Markets Coalition seeks to hold Fannie Mae and Freddie Mac accountable and uphold their founding purpose: to bring housing finance opportunities to American families not traditionally served by the private market.”

The coalition plans to use a new tracking tool to closely monitor the performance of Fannie Mae and Freddie Mac related to Duty to Serve and racial equity.

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