CNU Lobbies to change Fannie Mae and Freddie Mac

In Washington, DC, in December, CNU’s John Norquist and representatives from the National Town Builders Association had meetings with both Jerry Howard, president of the National Association of Home Builders (NAHB), and Assistant Secretary Rafael Bostic, chief economist at HUD.  The intention is to form a coalition to relax Fannie Mae and Freddie Mac’s current restrictions on mixed-use development. Presently, mortgages are excluded from Fannie and Freddie’s secondary market if more than 20 percent of the building or development is non-residential. This discourages investment in cities and infill locations.

The Congress for the New Urbanism and the National Town Builders Association propose that current restrictions on mixed-use buildings be eliminated, or raised to allow at least 50 percent of a project to be non-residential and still allow the residential portion of the project to be eligible for the Fannie/Freddie secondary mortgage market or the 221 d (4) capital program. This change would allow market forces to better determine characteristics of development rather than federal mandates. It would allow the market to respond to recent consumer preferences for mixed-use neighborhoods. According to Bill Tuyn, a CNU member and member of the NAHB board, “We want the freedom to build housing in urban settings.”

CNU is hopeful that NAHB may join our coalition and that HUD is moving toward supporting our position. We hope that 2011 brings significant progress on this issue, one that is fundamental to long-term economic recovery and quite simply would be responding to consumer demand.