The role of government sponsored enterprises (GSEs) in the development of affordable housing was highlighted at a hearing of the Senate Committee on Banking, Housing and Urban Affairs, “Public Proposals for the Future of the Housing Finance System (Part II),” on May 26.
Senators at the hearing acknowledged that the housing GSEs, Fannie Mae and Freddie Mac, are not likely to continue to exist in their current form and asked witnesses to provide recommendations on the future role of government in housing finance. Some witnesses, such as Enterprise Community Partners President and CEO Terri Ludwig and National Association of Realtors President Ron Phipps, said that GSEs play an essential role in the housing market and should not be privatized.
Ms. Ludwig testified that GSEs have proven to be a critical source of liquidity and capital for the development of affordable rental housing, and urged the Committee to ensure that the federal government continues to play a role in the affordable housing market, particularly as related to the financing of Low Income Housing Tax Credits. Ms. Ludwig said that without the liquidity provided by GSEs, it would be nearly impossible for underserved communities to access affordable housing
The Committee plans to hold at least one hearing related to housing finance every Senate work period for the remainder of the year.