Comment Detail

Comment

1. Are there categories of loans that should be excluded from receiving housing goals credit under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act) provisions on “unacceptable business and lending practices?”

Loans that can be viewed as predatory should be excluded from receiving housing goals credit. Loans with extremely low introductory rates that have a balloon payment after just a few years may seem attractive to some to start but result in devastation when the low fixed rate (which offered small mortgage payments) turns into an adjustable with double or triple the original payment amount. While these loans may be enticing for buyers and refinancers they are not sustainable and are not in the long term interest of the borrower.

2. Are there ways to determine whether the low-income areas home purchase AI goal has resulted in the displacement of residents from certain communities, or to measure the extent of any such displacement? Should FHFA consider modifying the low-income areas home purchase sub goal to address such concerns? If so, how?

Gentrification in low-income areas causes long term displacement of not only residents but also small businesses and places of worship. When buyers with higher incomes come into a census tract they bring with them their shopping and eating habits, which often lead to the development of chain stores entering the neighborhood and displacing small, usually family owned, businesses. With no clientele for the small businesses and places of worship, they too get displaced. Borrower income requirements can be imposed to ensure that borrowers within a certain threshold of income and creditworthiness can purchase properties. Much like the Opportunity Zones requirements of longevity, sustainability and community reinvestment can be added for borrowers well above the income threshold for the census tract where the borrower desires to acquire property. In addition, to track the progress of low-income families, continued evaluation of financial health can be added into practice.

3. Should FHFA revise the low-income areas home purchase sub goal to consider loans on properties located in Opportunity Zones, and if so, how should such loans be treated?

The objectives of the Opportunity Zones program completely aligns with the purpose of the enterprise low income areas home purchase sub goal. The overall goal of the Opportunity Zones program is to establish a thriving community within the zone. By offering credits for loans on properties located in the Opportunity Zones you are creating opportunities for the growth of the foundation of the community. By incentivizing citizens with credit benefits for purchasing properties you are giving power to the community members and instilling a sense of belonging and stability. The FHFA can target slow growing communities with specialized advertising and outreach letting community members know that programs are available and attainable for them. Opportunity Zone reporting framework should be used to track program progress however progress should not be based on dollar amounts but rather the impact these programs and incentives have on the community.

4. Is there evidence that the Enterprise housing goals have
helped expand low-income homeownership in the marketplace?

Homeownership expansion and impacts should be evaluated by the stability of financial resources. Enterprise housing goals should be creating programs that offer credits for ownership but also financial literacy education programs for continued development and growth. Impacts of programs can be measured by how many people took advantage of the programs but also, how many people were able to maintain their home loans as well as how many people were able to flourish beyond the Opportunity Zone and move on.