New Obama housing initiative to improve access to affordable housing

The Obama administration has introduced a new initiative that will support state and local housing finance agencies in efforts to keep mortgage rates low and increase access to affordable housing for low- and middle-income borrowers, the administration announced today. The plan includes both a new issue bond program that will encourage new lending, and a temporary credit and liquidity program, under which Fannie Mae and Freddie Mac will offer liquidity for outstanding bonds. The plan will be financed through fees the individual agencies will pay in order to access incentives, and will be available on a temporary basis, only. The intent is to jumpstart HFA activity with respect to affordable housing in the wake of the housing market’s troubles, while offsetting any potential risks to the taxpayer and the Treasury Department through these fees. TRD