HUD Lays Down the Law for Freddie and Fannie Affordable Housing Goals

WASHINGTON, DC-A new rule dictated by the US Department of Housing and Urban Development has been made with regard to the affordable housing goals for housing finance companies Fannie Mae and Freddie Mac. The rule, published in the Federal Register today, calls for the two government-sponsored enterprises to increase their target for purchasing mortgages for low- and moderate-income housing projects. The minimum goal is currently at 50%, but under the new guideline, that number will grow to 56% between 2005 and 2008.

HUD secretary Alphonso Jackson explains that “these new affordable housing goals will help the GSEs achieve the standard that Congress intended–leading the mortgage finance industry in helping low- and moderate-income families afford decent housing.” News of the increases, however, is seen as a problem by the mortgage banking industry.