- Credit availability for Fannie Mae and Freddie Mac mortgages has fallen to record lows, according to the Mortgage Bankers Association.
- Analysts say recent policy shifts under the Trump administration—such as staffing reductions and program cuts—are tightening lending standards.
- Affordable housing initiatives like down payment assistance and social bond programs have been scaled back or halted under the new FHFA leadership.
The Backdrop
As home prices continue to rise, affordability remains a critical issue for low- and middle-income buyers, reports Bloomberg. Fannie Mae and Freddie Mac have long supported housing recovery by helping homebuyers through low down payments and flexible underwriting for broader loan access.
What Changed
A May 15 Bloomberg report says Trump-era directives and FHFA head Bill Pulte are reversing housing affordability efforts. Fannie and Freddie are cutting products, staff, and loosening credit access—potentially slowing the housing recovery, analysts warn.
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Targeted Programs
In March, Pulte halted affordability programs that offered down payment and closing cost help to first-time and disadvantaged buyers. Consequently, inclusive initiatives like HomeReady, HomePossible, and Fannie’s social bonds are now reportedly being scaled back or paused entirely.
Industry Reaction
Despite concerns, the FHFA rejected the report’s claims, asserting that Fannie and Freddie still offer robust affordability programs. It added that the administration’s actions aim to lower housing costs inflated by previous economic conditions.
Why It Matters
Reduced credit access may exclude many buyers, with high mortgage rates and limited inventory worsening affordability challenges. Analysts warn these changes could chill the housing market, especially in low-income and high-cost regions.
Looking Ahead
As affordability worsens, lenders, developers, and policymakers are sharpening their focus on the policy changes unfolding at Fannie and Freddie. As a result, the broader implications could significantly impact everything from homeownership rates to demand across the multifamily and rental sectors.
