GSE Loan Limit And A Shift In Fannie Mae's Mission?


There’s a lot of talk today about the new plan to temporarily raise the conforming loan limit from $417,000 to 125 percent of a local market’s median home price to a limit of $730,000. One of the biggest arguments is that by raising the limit, you are shifting away from the original mission of the GSE’s which was to bring affordable housing to low-to middle-income families.

Some argue that in certain U.S. markets, $730,000 is in the moderate price range, but others say raising the limit just props up inflated home prices and continues to hurt home affordability.

So I want to show you something interesting--but first a big shout-out to and Debi, who pointed this out to me.

Take a look at Fannie Mae’s “About Fannie Mae” web page circa 2005: About Fannie Mae.
Now take a look at the same page today: About Fannie Mae.

The focus has clearly shifted from families:

In 2005: “Our public mission, and our defining goal, is to help more families achieve the American Dream of homeownership. We do that by providing financial products and services that make it possible for low-, moderate-, and middle-income families to buy homes of their own.”

to lenders:

In 2008: “We exist to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America’s secondary mortgage market to ensure that mortgage bankers and other lenders have enough funds to lend to home buyers at low rates. Our job is to help those who house America.”

I’m not criticizing the shift, just noting it. I did call Fannie, and as soon as I get a response, I’ll post it.

Questions? Comments?