In a victory for REALTORS®, Fannie Mae and Freddie Mac are ending pilot programs they’ve been operating for the last several years to help institutional investors in the purchase of single-family homes for rental properties. The Federal Housing Finance Agency, which oversees the two companies as well as the 11 Federal Home Loan Banks,
announced the action Tuesday. “What we learned as a result of the pilots is that the larger single-family rental investor market continues to perform successfully without the liquidity provided by the enterprises,” said FHFA Director Melvin Watt.
The National Association of REALTORS® applauded the action, saying the companies’ resources are better used for maintaining liquidity for home purchases. “By financing the purchase of thousands of single-family homes for institutional investors to use as rentals, Fannie Mae and Freddie Mac compounded inventory shortages and affordability concerns, which are holding back prospective home buyers across the country,” NAR said in a statement.
In one deal NAR was critical of last year, Fannie Mae helped lower financing costs for Blackstone Group in the purchase of some 50,000 single-family homes for rentals. “Rather than focusing on allowing well-qualified Americans to build wealth through affordable mortgages options, Fannie Mae is actively financing large institutions to compete with them,” 2017 NAR President William E. Brown said in a
Jan. 31 letter last year to FHFA.
FHFA said the two companies can still propose changes to their existing programs to increase financing for single-family rental housing purchases or propose ways to use single-family rental housing as a pathway to homeownership, another way of referring to lease-to-own arrangements.
—Robert Freedman, REALTOR® Magazine
