Federal regulation of government sponsored enterprises

We support efforts to strengthen federal regulation of the government-sponsored housing enterprises— Fannie Mae, Freddie Mac, and the Federal Home Loan Bank. Since their creation, the GSEs have played a critical role in expanding housing opportunity. With the appropriate balance of regulation and operational flexibility, even more Americans will benefit from their activities and investments.

The GSEs have made a significant contribution to the U.S. housing market, including,

• Developing innovative products
• Underwriting strategies that have expanded affordable homeownership and rental opportunities for lower income and other underserved populations
• Stabilizing the flow of mortgage credit to American consumers during economic downturns
• Developing a national mortgage market that has curtailed regional differences in interest rates.

Regulatory reform must build on these accomplishments and lay the groundwork for future GSE successes.

To strike the appropriate balance between oversight and operational flexibility, GSE regulatory reform should seek to accomplish the following goals:

• Create an affordable housing fund that provides new resources for affordable housing production and preservation initiatives.
• Revise the GSE affordable housing goals to expand the availability of mortgage credit in underserved markets.
• Preserve GSE flexibility to develop innovative underwriting strategies and products.
• Ensure that the new regulator maintains focus on the public missions of the GSEs while protecting their safety and soundness.