MADISON, NJ—Three possible pathways to GSE reform, each with a few twists and turns not shared by the other two. In weighing the merits of these plans, Congress needs to consider the potential impact on access to capital and market dynamics, particularly in multifamily, write Hal Collett and Mike McRoberts at PGIM Real Estate Finance.

The Milken Institute, the Mortgage Bankers Association and the Urban Institute each have put forth proposals for reforming housing finance. Under the Milken scenario, Fannie Mae and Freddie Mac would be reconstituted as lender-owned mutual funds, while Ginnie Mae would become a standalone government corporation that handled secondary market securitization functions.

Along with opening up the possibility of multiple guarantors, MBA's plan would replace Fannie and Freddie with privately owned independent utilities. It would also impose a regulatory structure for the Federal Housing Finance Agency to determine rates of return.