Note this is an appendix to the Project 2029 Housing Brief available on the website. The purpose of this appendix is to provide initial context and scoping of the possible budgetary and appropriations impacts of the policy responses proposed and detailed in that brief.

Problem & Proposed Policy Solution

Following the Great Recession of 2007-2009, Fannie Mae and Freddie Mac sold large volumes of repossessed homes to hedge funds and private equity firms. Many of these institutional investors converted the homes into high-priced rentals. This reduces the supply and drives up the cost of houses, concentrates ownership in rental markets, and decreases the availability of lower-cost rental units. All of which contribute to the housing affordability crisis.

Proposed Policy Solution: Use existing federal housing finance tools to discourage concentrated housing market ownership by institutional investors in vulnerable areas while protecting first-time buyers, small landlords, and mission-driven housing providers. A future administration must direct Fannie Mae and Freddie Mac to impose higher fees, tax disincentives, or stricter capital requirements on large-scale investors, especially those operating in vulnerable neighborhoods, to encourage competitive housing markets.

Policy Program Area Description & Key Budget Points

The Federal Housing Finance Agency (FHFA), an independent agency established by the Housing and Economic Recovery Act of 2008 (HERA), is responsible for the effective supervision, regulation, and housing mission oversight of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Home Loan Bank System. The Agency's charge is to ensure that Fannie Mae, Freddie Mac, and the Federal Home Loan Banks fulfill their mission by operating in a safe and sound manner to serve as a reliable source of liquidity and funding for housing finance and community investment. Since 2008, FHFA has also served as conservator of Fannie Mae and Freddie Mac. FHFA does not receive annual appropriations from Congress. Rather, FHFA is funded through assessments on the entities it regulates (Fannie Mae, Freddie Mac, and the Federal Home Loan Banks). FHFA’s annual operating costs are reported in the Agency’s annual Performance and Accountability Report (PAR) and summarized in the table below.

Source: Federal Housing Finance Agency Home Page

Key Budget and Funding Points

Fannie Mae and Freddie Mac collectively manage nearly $8 trillion in housing finance.
FHFA program costs total approximately $400 million annually.
While the Department of Housing and Urban Development’s (HUD’s) entire annual discretionary appropriated budget (about $80 billion) is about 1/100th the size of the aggregate value of Fannie Mae and Freddie Mac’s financing portfolio, there are likely numerous opportunities to utilize existing HUD housing finance tools to discourage concentrated housing market ownership by institutional investors in vulnerable areas.

Budget & Appropriations Appendix

Housing is a Human Right

Problem & Proposed Policy Solution

Project 2029

hopeis@project2029.me