Government Sponsored Enterprises
Presidential Advisory Group

NAR Principles for Ensuring a Robust Financing Environment for Homeownership

In light of disruptions in the credit markets and the conservatorship of Fannie Mae and Freddie Mac, NAR has developed principles for the consideration of the 111^th Congress and the new Administration.  The goal of these principles is to ensure there is sufficient capital to support mortgage lending in all types of markets for qualified borrowers.[1]  NAR believes that these principles require a continuing role for the federal government in the mortgage market.  The new secondary mortgage market model must:

1.  Ensure an active secondary mortgage market by facilitating the flow of capital into the mortgage market, in all market conditions.

2.  Seek to ensure affordable mortgage rates for qualified borrowers.

3.  Establish reasonable affordable housing goals so all qualified borrowers, including low- and moderate-income households, have an opportunity to realize the dream of homeownership.  Affordable housing goals should not provide incentives for the institution that are inconsistent with sustainable homeownership.

4.  Require the institution to pass on the advantage of its lower borrowing costs (and other costs of raising capital) by making mortgages with lower rates and fees available to qualified borrowers.

5.  Ensure mortgage availability throughout the nation.  NAR supports indexing conforming loan limits based on increases in median sales prices, including higher indexed limits for areas with high housing costs.

6.  Require sound underwriting standards.

7.  Require the highest standards of transparency and soundness with respect to disclosure and structuring of mortgage related securities.

8.  Ensure there is sufficient capital to support mortgage lending in all types of markets. 

9.  Provide for rigorous oversight.

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