NAHB Expresses Need for Some Federal Support in Housing Finance

NAHB Expresses Need for Some Federal Support in Housing Finance

03/27/2013 BY: KRISTA FRANKS BROCK

The National Association of Home Builders expressed its support for a housing finance system that phases out Fannie Mae and Freddie Mac but maintains a degree of federal support.

NAHB declared its support for this approach to Congress this week. “[A] federal backstop should be a fundamental element of bipartisan legislation moving forward,” said Rick Judson, NAHB chairman

The Bipartisan Policy Center Housing Commission and the Mortgage Bankers Association have also expressed support for a

housing finance system that calls for an expanded role of private capital while maintaining a level of federal support as measure of last resort.

“Multiple stakeholders have now weighed in with their proposed approaches” to housing finance reform,” Judson said. “While the details of those approaches may differ, one thing they all have in common is the need to maintain some form of federal support to the conventional mortgage market.”

NAHB supports the elimination of Fannie Mae and Freddie Mac as they stand today. Under their proposal, private capital would step in to fund conventional mortgages and contribute to a privately-funded federal mortgage-backed securities fund.

This new system would be implemented gradually rather than with any kind of immediacy in order to allow the market to adjust to the new format. The GSEs would continue to support the market until “the alternative system is fully functioning,” according to NAHB.

“As the housing market recovers and begins to add crucial strength and jobs to the national economy, it is essential that Congress ensure a stable and affordable flow of credit for home mortgages and housing construction,” Judson said.

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