Reps. John K. Delaney (D-MD), John Carney (D-DE), and Jim Himes (D-CT) last week outlined a housing finance reform proposal that uses private sector market forces to appropriately price risk while putting the scale and security of a government guarantee behind the program. They plan to introduce legislation this spring to create a housing finance system that the authors say is fair for borrowers, lenders, and taxpayers.
Key elements of the proposal, known as “Partnership to Strengthen Homeownership Act of 2014”:
• Housing reform legislation allows the government to expand the capacity of housing finance while allowing the private sector to price all of the risk
• Creates incentives for private capital’s market share in housing to grow over time;
• Creates a path for Fannie Mae and Freddie Mac to be sold as independent companies without any government support or monopoly status
• Creates additional funds for low-income housing