According to USA Today on Wednesday, mortgage regulators Fannie Mae and Freddie Mac will introduce a series of drastic reforms to make it easier for people in underprivileged communities to buy and maintain their homes.
The reform program proposed on Wednesday will be implemented in three years. The report said that this is the most comprehensive reform measures of the Fannie Mae and Freddie Mac since the subprime mortgage crisis in 2008, including assistance with down payments, emergency reserves for home buyers and lower mortgage insurance premiums.
In addition, the Fannie Mae and Freddie Mac will also launch a new credit reporting system, the system will pay the rent on time and will also be taken into the borrower's credit consideration. Previously, experts said that many minorities, despite being“model tenants,”still face credit deficiencies when buying a home.
The program also includes other contents such as increasing equity in housing underwriting process, addressing the uneven depreciation of multi-family homes, and providing financial support for new housing to address the homeless problem.
Accoding to the program, Freddie Mac will build 30,000 new multi-family homes by 2024 for renters to underwrite and accumulate credit. These homes will be rented with“housing choice vouchers”(housing choice vouchers), which will also include housing for people with disabilities. The total number of units to be offered is expected to be as high as 300,000.
In addition, Fannie Mae aims to help a total of 140,000 first-time home buyers complete the loan processby 2024 .
Among the reform measures announced Wednesday, the rental credit and other measures had been piloted from September last year to May this year, benefiting 2,000 loan applicants, about half of whom are minorities.
Fannie Mae and Freddie Mac announced the reform measures as home prices soared across the country. In addition, the rapid rise in mortgage rates from pandemic lows and historically high inflation have deterred some first-time home buyers.
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