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Certain restrictions imposed on Fannie Mae and Freddie Mac have been suspended by the Federal Housing Finance Agency and the US Department of Treasury.
The Preferred Stock Purchase Agreements (PSPAs) which restricted Fannie and Freddie’s ability to fund high-risk mortgages, like second homes, multifamily properties, and houses bought with higher-risk loans will be halted.
Even though the government enterprises will still be allowed to continue building capital under the continuing provisions of the PSPAs, these changes are on hold by the FHFA.
Sandra Thompson the acting director of FHFA said in a press release that with this suspension FHFA will have more time to evaluate the extent to which these requirements are not needed with existing FHFA standards, codes, and regulations that mandate sustainable lending standards.
Reference Source: MPA
