Fannie Mae introduces equitable housing plan for minority homeowners

The MBA commends the decision

Fannie Mae introduces equitable housing plan for minority homeowners

Fannie Mae has released an Equitable Housing Finance Plan outlining what the GSE will do to remove barriers Black homeowners and renters face in the housing market – a move welcomed by the Mortgage Bankers Association (MBA).

According to the National Association of Realtors, some 72% of White Americans were homeowners in 2020 – more than 30% more than Black Americans. As such, the Equitable Housing Finance Plan builds on recent efforts Fannie Mae has taken to make mortgages more inclusive to them, focusing on three key aspects:

  • Housing preparation: Helping Black consumers prepare early for sustainable homeownership and access to quality rental housing through credit building and financial education.
  • Buying or renting: Removing unnecessary obstacles Black people face in shopping for, acquiring, renting, or mortgaging a home.
  • Moving in and maintaining: Enhancing sustainable homeownership so renters and homeowners can withstand disruptions or temporary hardships and remain stably housed.

Read next: Minority homeownership gap – the sobering statistics

“We want to knock down these barriers, one by one, doing our part to undo the legacy of discriminatory practices that perpetuate racial housing gaps in America,” David Benson, president and interim chief executive officer of Fannie Mae, said in a media release. “The plan is a solid step toward this goal and a milestone in our work to make housing stronger, fairer, and more sustainable for the people and communities we serve.”

Bob Broeksmit, president and chief executive officer of the MBA, said the association commends Fannie Mae’s “proactive efforts to develop targeted, actionable plans…to make housing available on a more equitable basis.”

It isn’t just the Black community that will benefit from the plan – it will also serve other underserved communities as the plan matures and evolves. This includes any population who has been historically shunned out of the housing market due to their race, ethnicity, geographic location and other characteristics.

Read more: Fannie Mae names first chief diversity and inclusion officer

“The GSEs’ plans – focused on a typical consumer’s housing lifecycle – should allow for increased opportunities for minority households to secure affordable rental housing, prepare for homeownership, and obtain access to safe and affordable mortgage credit,” Broeksmit said. “While the plans are targeted to Black and Hispanic borrowers, all low- and moderate-income borrowers and communities should benefit.”

“The path to sustainable homeownership often starts with renting. MBA appreciates the GSEs’ emphasis on enhancing existing products and developing offerings to encourage the rehabilitation and creation of new multifamily rental housing,” Broeksmit added. “Addressing stubbornly low rental housing supply levels, and helping renters manage security deposits and build a payment history, are key areas to address that can facilitate future homeownership.”