Fannie Mae updated its Equitable Housing Finance Plan (EHFP) for this year. Katrina Jones, vice president of racial equity, strategy, and impact, said the changes would help to reduce or remove barriers to sustainable homeownership for those historically excluded from the housing finance system.

New initiatives under the plan are expected to have a significant impact on the upfront costs of housing, on accessibility to mortgage credit, and on housing stability, Jones added.

“Our plan anticipates growth in special purpose credit programs geared toward helping people in majority Black and Latino communities to buy their first home,” she said. “We have created and implemented innovative ways to help people qualify for a mortgage, even if they have insufficient credit history. We have launched our Social Index to help translate investor interest in socially conscious investing into savings for underserved borrowers. Fannie Mae’s comprehensive valuation modernization program is a significant step in the work to reduce bias, improve accuracy, and reduce costs.”

Fannie Mae’s EHFP is currently in the second of its three-year journey. Among the actions taken its first year, the company launched a special purpose credit program pilot serving Black census tracks in six major metropolitan markets. The pilot’s purpose is to understand how lenders and borrowers will respond to these types of offerings. These programs offer assistance such as down payment/closing cost assistance and post-purchase financial and housing counseling support.

THE EHFP is meant to provide support throughout the homeowner’s journey, from housing preparation, to the renting or buying process, to maintaining a property and homeownership.

Objectives for 2023 include:

• Expanding access for borrowers with insufficient credit through automated underwriting enhancements to support consumers.
• Closing the knowledge gap for consumer audiences with targeted outreach and expanded homeownership curriculum.
• Launching a delegated underwriting and servicing correspondent diversity program.
• Promoting awareness of fair servicing best practices to address borrower loss mitigation disparities.
• Expanding counseling services for renters and homeowners facing hardship.

“After completing over 11,000 counseling sessions in 2022 specifically addressing homeownership needs, we are expanding our efforts this year to help those facing financial hardship and improving access to information for long-term housing safety and stability,” Jones said. “We are also working alongside industry partners like HUD [the U.S. Department of Housing and Urban Development] to bring comprehensive counseling opportunities to those in need and to test new counseling services in various parts of the country. These enhancements are part of our broader vision to knock down barriers in the housing system.”