{
  "id": "R43507",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R43507",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 430316,
      "date": "2014-04-25",
      "retrieved": "2016-04-06T23:01:57.598404",
      "title": "Affordable Housing Provisions in Selected Housing Finance Reform Proposals",
      "summary": "Congress is considering different approaches to reforming the housing finance system. One of the major policy issues to emerge concerns the role of the federal government in supporting affordable housing for low- and moderate-income households. Much of this debate centers on Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs). As GSEs, Fannie Mae and Freddie Mac are hybrid entities, private companies with congressional charters that contain special privileges and certain responsibilities to support affordable housing. Some argue that the hybrid nature of the GSEsprivate companies with a public missionleads to perverse incentives and, therefore, the government should instead support affordable housing primarily through existing government programs or agencies, such as the Federal Housing Administration (FHA). Others argue that the perverse incentives can be realigned such that private companies could be encouraged to support affordable housing in a responsible manner.\nThe GSEs business model is intended to provide support to the broader mortgage market, but they take certain required actions that are geared primarily toward assisting low- and moderate-income households. The ways in which the GSEs currently support housing that is affordable to low- and moderate-income households provide one potential baseline to compare recent legislative proposals. This report discusses three major channels of support. First, since 1992 the GSEs have provided support through affordable housing goals mandated by Congress. The goals are numerical standards in which each GSE is required to dedicate a certain amount of its business on specified types of low-income borrowers and underserved areas. Second, in 2008 Congress also established for the GSEs a duty to serve requirement. Under the duty to serve requirement, the GSEs are required to provide leadership to assist low-income households in certain market segments: manufactured housing, affordable housing preservation, and rural markets. Third, in 2008 Congress also directed the GSEs to make contributions to two affordable housing funds, the Housing Trust Fund and the Capital Magnet Fund. The funds were intended to increase the supply of housing affordable to low-income households. The duty to serve regulation has not been finalized and the housing funds have not received contributions from the GSEs since the GSEs were placed into conservatorship.\nAlthough three of the more prominent housing finance reform proposalsthe Johnson-Crapo GSE Reform Proposal, the Housing Opportunities Move the Economy Forward Act proposal (HOME Forward Act), and the Protecting American Taxpayers and Homeowners Act (PATH Act, H.R. 2767)would repeal the affordable housing goals and wind down the GSEs, they offer different approaches to supporting affordable housing in a reformed system. The PATH Act would not have a mandate or requirement for private actors to support affordable housing and would leave the support to existing government agencies and programs. The Johnson-Crapo GSE Reform Proposal and the HOME Forward Act differ in their details but offer similar approaches; they would impose a fee on certain mortgage-backed securities and direct that fee to the Housing Trust Fund, Capital Magnet Fund, and a newly established Market Access Fund. They would also have, among other provisions, affordability requirements in their proposed multifamily finance systems. \nThis report explains the ways in which the GSEs currently support affordable housing and describes the different affordable housing approaches contained in the reform proposals.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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      "topics": []
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  ],
  "topics": [
    "Economic Policy"
  ]
}