Freddie Mac officials conducted two home buying journey consumer surveys of 1,600 Black and Latino people and asked them a series of questions, including area of ​​primary residence, family composition , homeownership status, living situation, credit score, and reason for exiting the homeownership process.

They also conducted dozens of interviews with consumers, advisors and experts on issues related to housing in the plan.

“Our goal is to remove barriers, not just for the loans that Freddie Mac might ultimately buy, but for the housing system in general,” said Pamela Perry, vice president of fair housing at Freddie Mac. “Our plan involves using data and our role in the market – and intense engagement – to solve problems around three main topics: access to credit, real estate valuation spreads and financial education.”

How to know it works

In order to help Fannie Mae implement the plan and for it to be successful, officials said they will need to commit to working collaboratively and transparently with industry participants, and that progress of the plan will rely on a partnership with mortgage lenders, local and state housing officials, and many others in the mortgage industry.

“We track our progress against the actions outlined in the plan and will measure success by how many barriers we knock down and who benefits when they are removed,” she said, adding that Fannie Mae will create and publicly share an annual progress report. of his efforts.

Freddie Mac officials highlighted an already successful initiative launched last year and a twin plan unveiled in June.
The initial initiative helps tenants build credit by encouraging operators of Freddie Mac-financed multifamily properties to report rental payments on time to the three major credit bureaus. Since the program began, officials said, 70,000 households in more than 800 rental properties have signed up, resulting in more than 15,000 new credit scores and 67% of tenants seeing their existing credit increase.

The new initiative aims to increase homeownership opportunities for first-time buyers by considering on-time rent payments as part of business loan purchase decisions.

“This extremely important decision will help many renters get closer to realizing the dream of homeownership,” DeVito said. “Millions of Americans don’t have a credit history. By factoring a borrower’s responsible rent payment history into our automated underwriting system, we can enable more qualified tenants to become tenants. , especially in underserved communities.”

In June, the Mortgage Bankers Association and the National Fair Housing Alliance announced a new online toolkit for lenders interested in developing special purpose lending programs to provide mortgage credit to economically and socially disadvantaged borrowers. in order to meet their needs.

MBA President and CEO Bob Broeksmit said the goal is to bring the mortgage industry together to develop effective policies and resources that will help close the racial gap in homeownership.

“The online toolkit is designed to provide useful advice and data analysis to mortgage lenders who want to use SPCPs to serve economically disadvantaged communities, as well as minority borrowers, most of whom do not have the wealth generation to fund a down payment,” Broeksmit said. .

A good “historical” start

Janneke Ratcliffe, vice president of the Urban Institute’s Housing Finance Policy Center, applauded both plans and called them “historic” because, unlike previous GSE efforts to increase homeownership, these ci specifically target communities of color while catering to the rental market.

Ratcliffe said she sees many positives in the plan, from its inclusion of the lending community and efforts to reduce costs and friction around mortgage applications, rent reform and the strong program of research.

And while she thinks it’s important to acknowledge how difficult the task at hand is for both companies, Ratcliffe thinks there’s room for improvement, especially in the area of ​​tangible metrics.

“How can they know if it works? ” she says.

The answer for Ratcliffe lies in Fannie Mae and Freddie Mac’s continued investment in attention to data.

“They have the ability to build robust data collection,” she said, adding that she believed tracking SPCPs would yield tangible results. “You should see those taking out mortgages pretty quickly,” Ratcliffe said.

Upcoming challenges

Jones reiterated that it will take many years to reverse the legacy of discriminatory housing practices in the United States, but added that Fannie Mae has embarked on a series of specific and meaningful actions over the past three next few years, designed to remove barriers to housing and access to mortgage credit for people who, because of their race, ethnicity or other characteristic, have been historically underserved by the housing system and mortgage financing. “We believe the actions outlined in the plan are essential to advancing affordable, quality rental housing and equitable and sustainable homeownership across America, which in the long run will benefit all people in their housing journey,” she said.

Freddie Mac officials agree, noting that the inequalities facing Black and Latino communities are long-standing, and that addressing this crisis requires long-term commitment and focus.

“The road ahead is difficult, but not insurmountable,” said Freddie Mac President Michael Hutchins. “With the partnership of lenders, investors, policymakers and other industry players, we intend to make meaningful progress towards a fair housing finance system that provides access to wealth, opportunity and sense of belonging to people and communities across the United States.”