APARTMENT ADVOCATE
NATIONAL APARTMENT ASSOCIATION /
NATIONAL MULTIFAMILY HOUSING COUNCIL
What Lies Ahead for Fanny and Freddie?
Is 2018 the year that Congress finally
passes housing finance reform and puts an end
to the conservatorship of Fannie Mae and
Freddie Mac?
Housing finance reform is at the forefront
of a full slate of issues that Congress may
tackle in 2018. Both the House and Senate are
actively working on crafting reform proposals,
holding hearings and meeting with
stakeholders including representatives from
the real estate industry. NAA/NMHC are
actively participating in these discussions to
ensure that the reform package adequately
addresses the unique characteristics of the
multifamily industry. In fact, in November,
46 | TRENDS • FEBRUARY 2018
2017 NAA/NMHC secured a key invitation
to testify before the House Financial Services
Subcommittee on Housing and Insurance.
The testimony stressed the importance of
maintaining access to an explicit, paid-for
federal guarantee for multifamily-backed
mortgage securities.
As 2017 drew to a close, FHFA Director
Mel Watt indicated that he believed that a
$3 billion capital reserve is necessary to cover
ordinary income fluctuations, modifying the
terms of Preferred Stock Purchase
Agreements (PSPA) for Fannie Mae and
Freddie Mac. Treasury and the Federal
Housing Finance Agency (FHFA) have since
announced they are modifying the terms of
the PSPA. In the joint Treasury/FHFA
statement, Treasury Secretary Steven T.
Mnuchin explained, “This agreement balances
the concerns of the FHFA with compensation
for taxpayers. The Administration looks
forward to working with Congress on
comprehensive housing finance reform, a top
priority in the year ahead.”
Originally, the PSPA had called for the
Enterprises’ capital reserve accounts to shrink
to $0 at the beginning of 2018. FHFA
Director Mel Watt indicated that he believed
that a $3 billion capital reserve is necessary to
cover ordinary income fluctuations.
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