Knocking Down Barriers, One by One

Solving for decades of persistent obstacles in housing and mortgage access and making the housing system more fair and sustainable for all consumers, especially historically underserved consumers and communities, can seem like an impossible task.

But like all big problems, progress can happen when we work together, break it down into its component parts, and address root causes to obstacles.

That is one of the biggest lessons we've learned at Fannie Mae from our evolving Equitable Housing Finance Plan, now in its third year, and updated this week for 2024. For all its influence at the heart of the housing market, Fannie Mae alone can't fix U.S. long-standing housing disparities that often fall along historically underserved community or consumer lines. But what Fannie Mae can do – and what it has done – is bring attention to the individual obstacles that prevent historically underserved consumers from attaining sustainable, affordable homeownership or rental housing, and then begin reducing or removing those obstacles. One by one.

At Fannie Mae, we chose to focus on four obstacles that disproportionately affect historically underserved consumers on their housing journey:

• Limited credit history
• Burdensome up-front housing costs
• Lack of financial resilience
• Lack of property resilience

All consumers may face various barriers at some point on their housing journey and we chose these four obstacles for a simple reason: Fannie Mae, through its ability to set standards, manage credit risk, and provide liquidity for the mortgage system, can have the greatest impact on these obstacles. This is the essence of Fannie Mae's Equitable Housing Finance Plan, where all consumers have benefited from our actions that address these barriers.

Since the Plan was launched in 2022, Fannie Mae has touched hundreds of thousands of consumers in their housing journey. We've built programs, services, and processes (and replaced old ones). We have empowered consumers to improve their ability to buy, rent, and keep a home. We have researched and tested innovative ways to lower up-front housing costs, launched solutions that addressed insufficient credit or the lack of access to credit, and improved housing stability through both financial and property resilience solutions. We have worked with lenders, industry partners and community stakeholders throughout the housing ecosystem and collaborated on innovations that aim to make our industry more responsive to the needs of an increasingly diverse country.

In short, we have helped erect an infrastructure upon which a fundamentally fairer, more open, and more inclusive housing finance system is taking shape. And we intend to keep at it.

While the first two years of the Plan marked a period of researching, testing, and learning, in the third year our focus is on expanding and scaling as many of our innovations as possible. We want more consumers, in more communities, to have access to down payment and closing cost assistance to help buy a first home. We want more mortgage lenders to use our innovative, underwriting technology to help creditworthy borrowers sustainably qualify for a 30-year mortgage. We want more consumers to save money through our valuation alternatives and other efforts that aim to reduce closing costs – closing costs that are a disproportionately high barrier to first-time homeownership for historically underserved and low-wealth consumers.

This is only the first act for the Equitable Housing Finance Plan, and we welcome your feedback on how we're doing so far. And, we are already beginning work to craft our next three-year plan, to cover the years 2025 to 2027. Indeed, the work to make the housing system more fair and sustainable, whether you are a renter or a homeowner, is a multi-year effort that is embodied in Fannie Mae's mission and aligned to our long-term business strategy, one that will involve continued engagement with our industry partners and community stakeholders for many years to come. Our commitment to make the housing system work better for all is not without its challenges, but we can tackle them, one by one, and build a better housing finance system for future generations.