MBA Wants Agencies to Raise Income Limits

January 24, 2023
MBA wants agencies to raise income limits
Association sends letter to housing regulator; encourages it to address affordability challenges.

 

The Mortgage Bankers Association has sent a letter to the Federal Housing Finance Agency urging the regulator to increase the area median income (AMI) limits in Fannie Mae and Freddie Mac’s low down payment programs. MBA’s letter, addressed to FHFA director Sandra Thompson, said that the government-sponsored enterprises (GSEs) should “explore sensible expansions of eligibility for the Fannie Mae HomeReady and Freddie Mac Home Possible offerings.” The programs, designed for credit-worthy low-income earners, only qualify borrowers with incomes below 80% of the AMI under the current guidelines. MBA recommends that the FHFA allow borrowers with up to 100% of AMI to be eligible for these programs and eliminate the income limit for properties in low-income census tracts.

Outlining the reasons and recommendations, MBA president and CEO Robert Broeksmit asserted: “Raising the AMI limits to expand access to these programs would still be beneficial as there are key features of Home Ready and Home Possible loans, such as a 3% down payment, that make homeownership attainable for historically underserved borrowers. The recent changes in increasing affordability, paired with expanded access, could have a considerable impact.

“Access to capital required for a down payment is often a barrier, or even the sole barrier, blocking these borrowers from purchasing a home. Both Equitable Housing Finance Plans highlight this barrier, noting that White borrowers are about 30% more likely to be able to access $3,000 from family or friends to help with this cost. The wealth gap for minorities has been well documented, and as FHFA has noted, this lack of capital largely stems from discriminatory practices like redlining, which have prevented communities of color from building wealth through homeownership for generations.”

Source: Mortgage Professional America