Mortgage giant Fannie Mae wants to make it easier for prospective homebuyers to build new homes.
The company is considering multiple initiatives that would help address the lack of affordable homes in the U.S. real estate market, with its first pilot program consisting of making it easier to get a construction loan, according to Bloomberg.
The program would let lenders sell their construction loans to Fannie on the day that construction starts. The company would then bundle the loan with traditional mortgages and mortgage-backed securities, which could make loans easier and cheaper to get. Borrowers would start making payments on the loans after they move into their homes.
Jon Lawless, vice president for product development and affordable housing at Fannie, said he hopes this will just be the first in a series of programs meant to address the country’s low housing supply.
However, Edward Pinto, co-director of the American Enterprise Institute’s International Center on Housing Risk, was skeptical that Fannie would be able to make a serious dent in the problem.
“It’s a lot easier to say you’re going to do something about supply than it is to get it done,” he said to Bloomberg.
Annual home sales declined in September for the first time since July 2016, which could indicate a chronic shortage of homes that are for sale. [Bloomberg] – Eddie Small