Newsroom

October 17, 2014

Fannie, Freddie may expand mortgage credit

Government-sponsored enterprises Fannie Mae and Freddie Mac are working on two proposals with their conservator, the Federal Housing Finance Agency, aimed at expanding mortgage credit and protecting lenders from penalties.

According to The Wall Street Journal, the new programs would allow lenders "to offer mortgages with down payments of as little as 3% for some borrowers … marking a reversal for the loan giants." This would also lower the number of penalties for lenders for underwriting mistakes, which the Journal said have caused institutions to be reluctant to lend to anyone without "near-pristine credit."

The paper said mortgage standards have stayed "abnormally tight" since the housing crisis and that the potential new rules would help millions of potential homebuyers. The agency is expected to make their announcement of these new programs as early as next week. NAFCU will monitor this initiative and keep our members apprised of any developments that affect credit unions.

NAFCU continues to advocate for housing reform that would guarantee access for credit unions to the secondary mortgage market, and fair pricing based on loan quality rather than volume.