Skip to main content

  • Comment Detail

  • Date: 05/04/24
    First Name: Anonymous
    Last Name: Citizen
    Organization: N/A
    City: N/A
    State: N/A
    Attachment: N/A
    Number: 2024-N-5

  • Comment

    To: Federal Housing Finance Agency

    Re: Proposed Enterprise New Product; Comment Request "Freddie Mac Single-Family Closed-End Second Mortgages" (No. 2024-N-5)

    While Freddie Mac's proposed new product to purchase closed-end second mortgages may provide benefits for some existing homeowners, I have concerns that it could negatively impact housing affordability and wealth-building opportunities for millennials and younger generations who are already struggling to become homeowners.

    Specifically, by making it easier for current homeowners to access their home equity, this product could increase demand in an already supply-constrained housing market. This increased demand could put further upward pressure on home prices, making the dream of homeownership even more out of reach for first-time and younger buyers.

    Additionally, if lenders shift resources towards originating these closed-end second loans, it could divert lending capacity away from products designed to help new homebuyers purchase their first home. This would be particularly concerning for millennial and Gen Z buyers.

    More broadly, a product that predominantly benefits existing homeowners who have already built up home equity runs the risk of exacerbating the already significant wealth gap between older and younger generations when it comes to housing wealth accumulation. With many millennials having faced challenges like the Great Recession early in their careers, policies seem more urgently needed to help this generation build housing wealth rather than accelerating the concentration of such wealth among existing owners.

    While the proposal notes the product could promote some charter purposes around market liquidity, I would urge FHFA to closely examine whether the public interest is truly served if the primary impacts are to further housing cost increases and wealth disparities that negatively impact renters, first-time buyers, and a younger generation of prospective homeowners. Assessing fair housing and affordable housing impacts should be a key priority.

    I appreciate FHFA's review of this proposal and consideration of potential negative consequences for millennials and other groups already facing homeownership hurdles that could be worsened by this new product.​​​​​​​​​​​​​​​​