Treasury Secretary Mnuchin Testifies Before Senate Banking Committee

National Housing Trust FundTreasury Secretary Steve Mnuchin testified before the Senate Banking Committee on May 18 that the Trump administration would take up housing finance reform in the second half of the year. He said that at that time, the administration will put forward a clear outline of its recommendations, and that they plan to reach out to different stakeholder groups, including consumers, mortgage bankers, and realtors, for their input. He stressed that reforming the housing finance system will require a bipartisan effort.

Mr. Mnuchin said that Treasury and the Federal Housing Finance Agency, the federal conservator of Fannie Mae and Freddie Mac, were not working together to prevent the mortgage giants from needing to take another draw from the government, but that Treasury was committed to working with FHFA and Congress to reform the housing finance system. He added that the administration supports the shareholder agreement that requires all of Fannie and Freddie’s profits be “swept” into the Treasury as dividends to the taxpayers, reducing Fannie and Freddie’s capital buffers.

The national Housing Trust Fund is funded by a small annual assessment on Fannie and Freddie’s new book of business each year. The HTF’s funding could be jeopardized if and when one or both of the entities needs an additional draw from Treasury.  

Learn more about the hearing at: