The Federal Housing Finance Administration (FHFA) has announced the release of the 2022-2024 “Equitable Housing Finance Plans” for government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The Plans include proposals to address racial disparities in housing among low-income individuals, including credit-building opportunities for renters, financing for construction of rental housing, and research into the use and availability of Housing Choice Vouchers (HCVs) and on tenant protections in U.S. states and territories. FHFA will also implement several new initiatives by creating pilots and “test-and-learn” activities, which will be available via its website.
The Plans fit into the broader strategy of FHFA and align with Equity Plans released by other federal agencies earlier this year (see Memo 4/18). While Fannie and Freddie primarily serve moderate-income households, several proposals in the Plans may strengthen the ability of low- and extremely low-income households to build wealth. For example, Freddie’s Plan recommends including rental payments in the data considered by credit bureaus when determining credit scores. The Plan reports that “continued reliance on FICO scores across industries disfavors Black and Latino households whose credits scores are often lower…due in part to their largest continual payment – rent – not being reported to credit bureaus.” However, some advocate organizations, including NLIHC, warn that reporting negative rental payment data could further harm marginalized households.
Read FHFA’s press release addressing the Plans at: https://bit.ly/3xhGvsy
Read Fannie Mae’s “Equitable Housing Finance Plan” at: https://bit.ly/3MvQ5gY
Read Freddie Mac’s “Equitable Housing Finance Plan” at: https://bit.ly/398IYgJ