Government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac are lending a hand to homebuyers in rural and low-income areas in the new three-year Duty to Serve program.
Fannie and Freddie’s purchase of more loans in qualifying areas has been put into place as a means of incentivizing private lenders to make more loans for lower-income homebuyers. Realtor.com reports that Fannie will buy up to about 5,000 additional new rural, single-family loans annually, while Freddie will purchase roughly 3,360 more new loans by the third year of the program.
"It's unclear the impact it will have just yet. It's new to the market, still unproven," says Gerron Levi, director of policy and government affairs at the National Community Reinvestment Coalition, an umbrella group of affordable and fair housing groups and lending organizations. But "when Fannie and Freddie enter the market and tell lenders, 'if you make the loan we will purchase it,' it will facilitate access to credit to those markets. [Private] lenders will be more willing to make loans.”
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