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Proposals to lower Fannie Mae and Freddie Mac’s goals for making home loans to low-income borrowers threaten to needlessly exclude creditworthy borrowers at a time the overall market needs home lending to grow, UNC Center for Community Capital researchers said in a July 26 comment to the Federal Housing Finance Agency.

“Ensuring that qualified lower-income households can access the benefits afforded other borrowers in the conforming conventional market is an integral function of [Fannie and Freddie] and an important contributor to housing market health,” center executive director Janneke Ratcliffe and graduate research assistant Kevin Park said in their comment on FHFA’s proposed 2012-2014 housing goals for the two agencies.

The proposed benchmarks would significantly reduce their lending goals for low-income borrowers, for instance, reducing the goal for lending to low-income borrowers (those earning 80 percent or less of area median income) from more than 25 percent of the market to 20 percent.  The rationale for such action is unclear, researchers said, given that evidence clearly shows that low-income home lending is safe and sound when borrowers are given sound mortgage products.

The center’s complete comment is available online at

The UNC Center for Community Capital is the leading center for research and policy analysis on the transformative power of capital on households and communities in the United States. The Center’s in-depth analyses help policymakers, advocates and the private sector find sustainable ways to expand economic opportunity to more people, more effectively. For more information, visit

Topics(s): Affordable Homeownership, Mortgage Finance
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