Mel Watt is scheduled to update the House Financial Services Committee on his strategic plans for Fannie Mae and Freddie Mac on Tuesday.
Watt, director of the Federal Housing Finance Agency, is expected to discuss the financial condition of the government-sponsored enterprises (GSEs) as well as report on the measures his agency has taken as their conservator.
There’s a good chance that he will be asked about his recent order directing Fannie Mae and Freddie Mac to set aside funds to support the National Housing Trust Fund (NHTF) and the Capital Magnet Fund (CMF).
Affordable housing and community development supporters applauded the recent move. Both programs were established under the Housing and Economic Recovery Act of 2008. They were supposed to be supported by Fannie Mae and Freddie Mac, but that didn’t pan out. The GSEs were placed into conservatorship during the housing crisis in 2008, and payments were suspended. Watt’s move lifts that suspension.
Enterprise Community Partners estimates that $400 million to $500 million would be raised for the programs. Sixty-five percent will go to the NHTF, while the remaining 35 percent will go to the CMF.
Nancy O. Andrews of the Low Income Investment Fund, Don Hinkle-Brown of The Reinvestment Fund, Joe Neri of IFF, and Terry Simonette of Capital Impact Partners recently co-authored a blog post about the CMF.
On the other side, there is opposition to Watt’s recent action. “Money coming in from the GSEs should go to the taxpayers instead of a slush fund for ideological housing groups to play around with,” said Rep. Ed Royce (R-Calif.), a Financial Services Committee member, in a statement.
When Watt made the move in December, Committee Chairman Jeb Hensarling (R-Texas) also voiced opposition and said the Financial Services Committee would call on Watt to testify.
Watt will be the sole witness at the committee hearing.