Key Issues > Federal Government's Role in Housing Finance

Federal Government's Role in Housing Finance

The federal government has played an increasingly active role in housing finance since the start of the 2007 financial crisis, exposing the federal government and taxpayers to risks.

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Congress established the government-sponsored enterprises (enterprises) Fannie Mae and Freddie Mac to provide stability in the secondary market for residential mortgages and serve the mortgage credit needs of targeted groups.
In September 2008, the Federal Housing Finance Agency placed the enterprises in conservatorship out of concern that their deteriorating financial condition would destabilize the financial system. By the end of 2013, the enterprises had received $187 billion in federal assistance.
Congress and the Executive Branch face difficult decisions on how to restructure the enterprises and promote housing opportunities while limiting risks to taxpayers.
The Department of Housing and Urban Development's (HUD) Federal Housing Administration (FHA) has helped millions purchase homes by insuring private lenders against losses from defaults on FHA-insured single-family mortgages.
Ginnie Mae, another HUD component, guarantees the timely payment of principal and interest for securities backed by federally insured or guaranteed mortgages.
Due partly to the contraction of other mortgage market segments, FHA's and Ginnie Mae's business volumes have risen sharply in recent years. This growth highlights the need for these entities to properly manage financial risks while meeting the housing needs of borrowers.

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FHA Mortgage Insurance: Applicability of Industry Requirements Is Limited, but Certain Features Could Enhance Oversight

http://www.gao.gov/products/GAO-13-722

GAO-13-722: Published: Sep 9, 2013. Publicly Released: Oct 22, 2013.

Federal Housing Administration: Analysis of Options for Modifying Its Products, Market Presence, and Powers

http://www.gao.gov/products/GAO-13-682

GAO-13-682: Published: Sep 9, 2013. Publicly Released: Oct 22, 2013.

Mortgage Financing: Fannie Mae and Freddie Mac's Multifamily Housing Activities Have Increased

http://www.gao.gov/products/GAO-12-849

GAO-12-849: Published: Sep 6, 2012. Publicly Released: Oct 9, 2012.

Ginnie Mae: Risk Management and Cost Modeling Require Continuing Attention