National Association of Realtors (NAR) President Charlie Oppler issued a statement responding to the Federal Housing Finance Agency and U.S. Treasury Department announced changes that will allow Fannie Mae and Freddie Mac to retain more of their earnings as important capital rather than passing them directly to the Treasury.

NAR said appreciates administration efforts to ensure market stability and liquidity during the ongoing pandemic, but the nation's largest trade association is concerned these changes would limit the Enterprises' ability to appropriately serve the overall U.S. housing market as intended, most notably as it relates to first-time buyers, those in underserved communities, investor properties and second home purchases.

“Fannie Mae and Freddie Mac have been dramatically transformed in the wake of the Great Recession, and NAR is glad to see them continuing to strengthen and stabilize as they fulfill their mission both in times of crises and prosperity,” Oppler said in a release. “While we are grateful additional steps were taken toward this goal, much work remains in this process and we look forward to furthering conversations with the current and future administration in effort to secure GSE reform that will protect American consumers, homebuyers and taxpayers alike.”

The government sponsored enterprises (GSEs) buy loans from lenders and bundle them into securities, which they sell to investors with a guarantee. But in order to back these guarantees, they need loss-taking capital, according to the release.

NAR said it has long supported GSE reforms and continues to advocate to lock in beneficial changes made since the 2008 financial crisis.  

“Any considerations to limit financing on second homes, investor properties or entry-level borrowers will have a negative impact on borrowing costs and a broader impact on the rental market,” Oppler said. “This would only undermine the GSEs’ ability to fund many of their charter duties and appropriately serve U.S. taxpayers and consumers.”