Director Calabria Announces Plans to Create Framework for GSE Reform

On May 14, the National Association of Realtors held a policy discussion with Director of the Federal Housing Finance Agency Mark Calabria, in which he discussed his agency’s agenda for housing finance reform. Director Calabria explained that while he would like to develop a road map for housing finance reform by the end of this year, which will include a path for releasing Freddie Mac and Fannie Mae from conservatorship by the federal government, the plan itself will not follow a strict timeline. He also announced plans to negotiate with the Treasury Department this fall on changes to the GSEs’ current preferred stock purchase agreements, which require Freddie and Fannie to deliver nearly all of their annual profits to the Treasury, using this as a step towards creating a path for ending conservatorship. This action will follow the release of the Treasury’s and HUD’s upcoming proposals for reforming the housing finance system, which are being developed in response to a recent presidential memorandum. (See our section-by-section analysis of this memo). Finally, Calabria emphasized that Fannie and Freddie will need a strong supervisory framework, successful business model and adequate capital before they are released from government conservatorship. Enterprise has released recommendations for housing finance reform that would expand support for affordable single-family and rental housing.

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