The Federal Housing Finance Agency (FHFA) announced Tuesday that Fannie Mae and Freddie Mac will provide the agency with Equitable Housing Finance Plans by the end of the year.
According to the FHFA, the lending organizations will identify and address barriers to sustainable housing opportunities, including their own goals and action plans to advance equity in housing finance for the next three years. The plans will be updated annually, FHFA said.
“For generations, discriminatory practices like redlining have prevented communities of color from building wealth through homeownership,” FHFA Acting Director Sandra L. Thompson said. “By identifying the barriers to equitable and sustainable housing finance opportunities and setting goals for addressing those barriers, the Enterprises, consistent with safety and soundness, can responsibly reduce the racial and ethnic disparities in homeownership and wealth that still exist today.”
FHFA will also require the lending organizations to submit annual progress reports on the actions they have undertaken during the previous year to implement their plans.
Part of a first of its kind Memorandum of Understanding signed between FHFA and the U.S. Department of Housing and Urban Development (HUD) regarding fair housing and fair lending coordination, the move is FHFA’s and HUD’s way to enhance their enforcement of the Fair Housing Act, which HUD administers and enforces, as well as their oversight of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, which FHFA regulates.
“This is a major step in bringing more equity to the housing finance industry,” HUD Secretary Marcia L. Fudge said. “HUD’s recent collaborations with FHFA are crucial actions that will advance fair housing and fair lending for all Americans and expand access to opportunities for homeownership and the generational wealth building that can come from it. HUD is pleased to work alongside FHFA and others on a comprehensive approach to building a more equitable housing finance system.”
FHFA will now issue a Request for Input to get public feedback until October 25, 2021, that will help Fannie Mae and Freddie Mac prepare their first plans and to help FHFA in overseeing the plans. Input can be submitted via FHFA’s website, or by mail. The FHFA will also host a public listening session on Sept. 28, 2021, that will also record public input.