Fannie and Freddie Five Years On: Time for Contribution

Image Credit: Center for American Progress 

Nearly five years after the Housing and Economic Recovery Act (HERA) of 2008 established the National Housing Trust Fund to build, preserve, and manage affordable rental housing, the U.S. faces an estimated shortage of 7.1 million rental units for low-income and disabled Americans. See Pub.L. 110-289. Despite the grim state of affordable housing, the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation (Fannie Mae and Freddie Mac respectively) have recently posted record profits. Fannie and Freddie's improved financial positions have prompted the National Low Income Housing Coalition and others to call for the organizations' to fulfill their statutory requirement to contribute a portion of their profits to the National Housing Trust. This provision was waived when Fannie and Freddie were taken into a conservatorship by the Federal Housing Finance Agency (FHFA) in late 2008, but after five years and a turnaround in profits, the special protections given to Fannie and Freddie seem to have outlived any utility. As Congress prepares to hold confirmation hearings regarding Mel Watt, President Obama's nominee to succeed Ed DeMarco as FHFA director, serious pressure should be applied to the FHFA to lift the pass given to Fannie and Freddie and force them to contribute their statutorily mandated share to the National Housing Trust.