- The National Housing Conference (NHC) urges lawmakers to restart housing finance reform and plan a clear exit for Fannie Mae and Freddie Mac from conservatorship.
- Their plan focuses on liquidity, affordability, and strong oversight while preserving the Federal Housing Finance Agency’s (FHFA) authority.
- With political pressure rising, the future of GSEs remains uncertain as debates over government backing continue.
A Long Wait for Change
Fannie Mae and Freddie Mac have remained under GSE conservatorship since the 2008 financial crisis, per GlobeSt. Sixteen years later, housing stakeholders still ask: when will it end?
Former President Trump’s calls to end the conservatorships have revived debate. His comments sparked new concerns about the risks tied to implicit government guarantees.
NHC Weighs In
The National Housing Conference recently released a white paper. It outlines five key priorities for housing finance reform.
At the center is a call to revisit the Housing and Economic Recovery Act (HERA) of 2008. The NHC believes the law’s potential has gone unrealized due to the prolonged federal control.
Focus on Liquidity
The NHC highlights the importance of a strong secondary mortgage market. It points to the TBA market, which handles over 90% of mortgage-backed securities.
Fannie Mae and Freddie Mac finance nearly half of US single-family mortgages. They also support a large share of multifamily housing.
Maintaining this liquidity is vital, especially for multifamily owners who rely on refinancing.
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Affordability Still a Priority
HERA also requires broad access to affordable mortgage credit. The NHC stresses this must remain a focus.
This is especially true for first-time buyers, low-income households, and minority borrowers.
Some propose shrinking the GSEs’ role and shifting to private solutions. But the NHC says this should only happen if those alternatives can serve borrowers fairly.
Government Guarantee Concerns
Before conservatorship, the GSEs operated under an implicit government guarantee. Full federal control later replaced that model.
The NHC warns that ending conservatorship without clear rules could confuse the market.
They oppose a formal guarantee, calling it politically unrealistic.
Instead, they support using preferred stock purchase agreements. This method would retain FHFA oversight and protect against risky practices while the GSEs build capital.
The Role of Regulation
The NHC believes the FHFA should set standards and enforce rules but avoid daily management.
They also call for new oversight powers for the FHFA and Treasury to monitor fair competition and market conduct.
A Careful Transition Needed
The NHC stresses the need for a clear and stable path out of GSE conservatorship. That transition should prevent market shocks, protect affordable housing programs, and give investors confidence.
Why It Matters
The GSEs remain central to US housing finance. Yet their future is still unclear. Ending conservatorship without a plan could hurt both the market and those who depend on affordable housing.
What’s Next
No formal exit strategy exists today. But the NHC’s recommendations offer a framework for lawmakers. Still, the road ahead will require political will and broad agreement—both in short supply.
