FHFA hopes that other market participants will able to utilize CSP as well sometime in the future. FHFA's report says it is now working to complete the second phase of the transition (Release 2), in which both GSEs will adopt and begin issuing the new Uniform Mortgage-Backed Securities (UMBS), instead of their current separate MBSs, and sell the new securities through CSP. The report announces that the deadline for completing this phase has been extended from 2018 to the second quarter of 2019 so FHFA may seek more input from market participants and they have more time to prepare.
Richard Green, who currently serves as director and chair of the USC Lusk Center for Real Estate and served as HUD Senior Advisor on housing finance from July 2015-June 2016, said that the cuts come at a potentially dangerous time. Green, who took over as HUD Senior Advisor for Edward Golding when Golding became head of the Federal Housing Administration, identified three issues with Trump’s budget proposal. Specifically, Green said that there are three operations within HUD that need more money, not less - first, Green said that the FHA needs money to update its systems, second, Green argues that Ginnie Mae is understaffed, especially considering the market share of the FHA, and third Green identifies issue of the lack of funding for housing assistance.
A ratings agency report indicates that reforming the government-sponsored enterprises could have wide-reaching implications for a range of sectors and entities. A potential reform of the U.S. housing finance that is centered around Fannie Mae and Freddie Mac is possible but not likely imminent. The pair of secondary mortgage lenders were at the center of the financial crisis and thrust into conservatorship in September 2008 by the Federal Housing Finance Agency. But more than eight years later, both GSEs remain in conservatorship, and their resolution remains one of the largest pieces of unfinished business remaining from the global financial crisis, according to Reform of Fannie Mae and Freddie Mac Has Potential to Reshape US Mortgage Markets from Moody's Investors Service.
Importantly, it includes provisions that would significantly strengthen the 4 percent Credit and tax-exempt bond portion of the program by setting a minimum 4 percent rate for bond-financed units and providing states with the authority to give a 30 percent basis boost to those units. The only other difference between the House and Senate bills is a modification to the provision regarding taking certain energy tax credits for Housing Credit properties. Specifically, both the Senate and House bills would eliminate the basis reduction associated with taking the Section 48 investment credit used to finance solar panels; however, only the Senate bill also eliminates the basis reduction associated with the Section 45L Energy Efficient Home Credit and Section 179D Energy Efficient Commercial Buildings Deduction. This section-by-section description of the bill provides more details on the bill's provisions.