Fannie and Freddie Unveil Plans to Tackle the Racial Homeownership Gap

Mortgage giants Freddie Mac and Fannie Mae unveiled a number of initiatives on Wednesday aimed at making it simpler to purchase a home and closing the racial Homeownership gap, which now stands at 72 percent for White Americans and 42 percent for Black Americans.

Down payment aid, decreased mortgage insurance rates, and a credit reporting system that considers rent payment history are among the major improvements. The businesses are also planning to implement technologies that will enhance credit availability and make house evaluations more equal, as well as extend counseling services to assist housing stability.

The plans were created in response to a request from the Federal Housing Finance Agency, which governs Fannie Mae and Freddie Mac, to eliminate discrimination in Homeownership access last autumn. According to Sandra L. Thompson, interim head of the Federal Housing Finance Agency, the proposals show Fannie and Freddie’s commitment to “sustainable measures that will substantially address the racial and ethnic gaps in Homeownership and wealth that have persisted for decades.”

In a blog post, Jeffery Hayward, Fannie Mae’s executive vice president and chief administrative officer, claimed that Black people have been denied full access to housing and Homeownership for much of the country’s history. He goes on to detail the practise of legalised redlining, which effectively blocked large portions of the Black population from obtaining loans and purchasing homes in the post-World War II era.According to him, Fannie Mae and Freddie Mac’s policies seek to better prepare potential homebuyers and renters, boost diversity in the housing market, remove obstacles to first-time Homeownership, and increase access to affordable rents.