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July 9, 2004
HUD DATA SHOWS FANNIE MAE AND FREDDIE MAC HAVE TRAILED THE INDUSTRY IN PROVIDING AFFORDABLE HOUSING IN ALABAMA AND 43 OTHER STATES
New regulations will increase mortgage financing for homebuyers and underserved communities
BIRMINGHAM � The U.S. Department of Housing and Urban Development released data today giving a state-by-state breakdown of the performance of Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac. This
data covering 1999-2002 shows that combined, the GSEs have lagged behind the primary market in Alabama and 43 other states in their commitment to provide affordable housing opportunities for low- and moderate-income families.
In Alabama, the primary mortgage market devoted 42.6 percent of its business to low- and moderate-income loans, compared to 38.1 percent by Fannie Mae and 37.1 percent by Freddie Mac.
"While the GSEs met the affordable housing goals in 2002, they must further utilize their entrepreneurial talents and power in the marketplace to genuinely lead the mortgage finance industry as Congress intended," said HUD Secretary Alphonso Jackson. "HUD recently proposed new housing goals, which over the next four years, would simply push the GSEs to do what is expected of them�helping low- and moderate-income families at least at the same percentage levels as primary market lenders."
HUD estimates that if the GSEs had matched the overall single-family market nationwide during this period, they
would have acquired an additional 470,000 single-family loans for low- and moderate-income families. Focusing only
on home purchase loans, if the GSEs had matched the market, they would have acquired an additional 264,000 loans for these families. Of these 264,000 home loans, approximately 94,000 would have been for first-time homebuyers with less-than-area-median income.
By statute, HUD sets the annual affordable housing goals that require a percentage of Fannie Mae and Freddie
Mac's mortgage purchases to finance housing for low- and moderate-income borrowers, and borrowers in
In April, HUD proposed new federal regulations that would raise the GSEs targeted lending requirements. HUD estimates that over the next four years an additional one million low- and moderate-income families would be served as a result of the new goals.
The public comment period on this proposed rule was recently extended 15 days and will now end July 16. After consideration of comments received, HUD will publish a final rule before it takes effect in 2005.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.