U.S. Secretary of the Treasury Steven Mnuchin defended the Department's housing reform plan (the "Plan") against criticism that it would put "an end to affordable housing."

In testimony before the House Committee on Financial Services, Mr. Mnuchin stated that the Treasury's Housing Reform Plan will not reduce government-sponsored enterprises' ("GSEs") longstanding support for affordable housing. He clarified that the Plan will continue (i) giving access to the 30-year fixed-rate mortgage loan and (ii) funding low-income multifamily housing. In addition, Mr. Mnuchin noted "at least four key statutory mandates" that GSEs are required to follow to protect underserved populations. Those mandates include:

  1. 1. ensuring a "duty to serve . . . three specific underserved markets," including (i) manufactured housing, (ii) affordable housing preservation and (iii) rural markets;
  2. 2. making reoccurring contributions to the Housing Trust Fund and the Capital Magnet Fund;
  3. 3. issuing its charter authority to promote mortgage credit nationwide; and
  4. 4. purchasing a certain amount of single-family and multifamily mortgage loans as specified by the Federal Housing Finance Agency ("FHFA").

Mr. Mnuchin argued that although the Plan does not have specific "duty-to-serve" recommendations, the Treasury will work to ensure that the national service requirement continues. In addition, Mr. Mnuchin said that the Treasury Department recommends:

  • amendments to the fourth mandate (above), to enhance the mechanism for providing support to underserved borrowers;
  • that the FHFA work with the Federal Housing Administration and Ginnie Mae to ensure that the federal government serves an "efficient and appropriate . . . role in affordable housing"; and
  • increasing collaboration between Congress and the FHFA to enhance housing finance reform legislation.

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