Federal Housing Finance Agency Director Bill Pulte directed Fannie Mae and Freddie Mac to end support for special purpose credit programs earlier this year. But now other agencies are also ending authorization for the programs.
The bureau said the guidance conflicted with the amended ECOA Regulation B rule, which among other changes sets strict conditions for lenders to be able to offer special purpose credit programs.
The Foundation Against Intolerance and Racism claimed that a Washington state special purpose credit program violated a clause of the 14th Amendment by using race-based criteria for eligibility.
The Federal Housing Finance Agency said other agencies are already responsible for enforcing fair lending and fair housing laws. However, critics argued that the administration has been steadily eviscerating the enforcement arms of those agencies as well.
A coalition of more than two dozen affordable and fair housing advocacy groups urged FHFA and HUD to reverse course on staffing cuts and program eliminations.
FHFA’s ban on the GSEs’ use of special purpose credit programs doesn’t appear to apply to HomeReady or Home Possible, neither of which has a racial or ethnic requirement.
FHFA directed the GSEs to end their SPCPs, prompting renewed concerns that the Trump administration could take further actions to limit special purpose credit programs in the mortgage market.
FHFA under the leadership of Bill Pulte has rescinded, deleted or closed at least eight agency directives without providing notice on the agency’s website or announcing the changes in a press release.