Housing America's Future

Bipartisan Policy Center

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Date Published 2013
Primary Author Bipartisan Policy Center
Other Authors
Country United States


A bipartisan commission of former Cabinet secretaries, former Senators and other leading housing and economic experts unveiled a new vision for housing policy. First, the commission proposes the winding down and ultimate elimination of Fannie Mae and Freddie Mac after a multiyear transition period. The commission proposes to replace the GSEs with an independent, wholly owned government corporation— the “Public Guarantor”—that would provide a limited catastrophic government guarantee for both the single-family and rental markets. Unlike the GSEs, the Public Guarantor would not buy or sell mortgages or issue MBS. It would simply guarantee investors the timely payment of principal and interest on these securities. All other actors in this new system—originators, issuers of securities, credit enhancers, and mortgage servicers—should be private-sector entities fully at risk for their own finances and not covered by either implicit or explicit government guarantees benefitting their investors or creditors. The Public Guarantor will have significant standard-setting and counterparty oversight responsibilities. For first-time home buyers, the report emphasizes the importance of housing counseling as a means of preparing for homeownership. It further recommends programs to enable seniors to “age in place” safely and affordably. The commission recommends increasing the supply of suitable, affordable, and decent rental housing through: i) Expansion of the Low Income Housing Tax Credit (LIHTC) by 50 percent over current funding levels. ii) Additional federal funding to address the capital backlog and ongoing accrual needs in public housing to preserve the value of prior investments and improve housing quality for residents.

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