Affordable housing might be a priority for the government, but that doesn’t mean banks share the same view. According to a recent CoStar article, 11 federal home loan banks say that government pressure to fund their housing programs could threaten their stability.
The Biden administration requires federal banks to contribute money through grants for affordable housing initiatives. According to a White House press release, the president proposed that “each Federal Home Loan Bank double its annual contribution to the Affordable Housing Program, which will raise an additional $3.79 billion for affordable housing over the next decade and assist nearly 380,0000 households.”
Banks and the Affordable Housing Program
Home loan banks include Fannie Mae and Freddie Mac, government-sponsored enterprises charged with making the housing market more efficient while contributing to affordable housing development. Other consortium members include commercial banks and other financial companies that offer to make loans to federal banks as collateral in exchange for their business.
However, the 11…