In the wake of the 2008 financial crisis, the US government seized control of mortgage giants Fannie Mae and Freddie Mac. As a result, the federal government now backs 70 percent of all new residential mortgages, according to the nonpartisan Congressional Budget Office.
Policymakers have been struggling for years to determine a legislative solution to reduce the federal government’s newly-expanded role in the US housing market. In the 113th Congress, two housing reform bills advanced through committee: the Senate Housing Finance Reform and Taxpayer Protection Act (Johnson-Crapo) and the House Protecting American Taxpayers and Homeowners Act (the PATH Act). However, the vast differences between the two bills confirm that no broad consensus has emerged on the fundamental question of the scope of federal government involvement in the residential mortgage market.
With Republicans now in control of both the House and Senate, the debate on housing finance reform could be reenergized, but without consensus on the federal government’s role, Congress is likely to remain deadlocked in the 114th Congress. Moreover, the Obama administration is highly unlikely to act unilaterally to end the Fannie and Freddie conservatorships through administrative action, as some have suggested. Doing so without some kind of federal backstop—which would require congressional action—is not feasible. In the meantime, the Federal Housing Finance Agency (FHFA), the regulator and conservator of Fannie Mae and Freddie Mac, continues to reform and refine the operations of the enterprises, recognizing the reality of the role they play in the country’s housing market and economy.
Recognizing the important role of mortgage REITS (mREITs) in raising private capital for housing, Nareit will continue to monitor developments and engage in strategic discussions with relevant government officials, agency staff, Washington policy experts, members of Congress and staff on ways to optimize the participation of mREITs in the housing market as the regulatory landscape changes with the anticipated wind-down of Fannie Mae and Freddie Mac.
STATUS: No legislation has been introduced.
- Nareit FirstBrief on the Senate Committee of Banking, Housing and Urban Affairs Passing the House Finance Reform and Taxpayer Protection Act of 2013 -5/15/14
- Nareit FirstBrief on Administration's Proposal of its GSE Reform Plan - 8/7/13
- Nareit FirstBrief on GSE Reform Bill Passed by the House Financial Services Committee - 7/25/13
- FirstBrief on GSE Reform, including S. 1271 - 6/27/13
- Nareit FirstBrief: Obama Administration Releases Report to Congress on Housing Finance Reform - 2/11/11
- "Reforming America's Housing Finance Market: A Report to Congress" issued by the Department of the Treasury and the Department of Housing and Urban Development - 2/11/11
- Joint Press Statement from the Department of the Treasury and the Department of Housing and Urban Development on their Report on Housing Finance Reform - 2/11/11