Freddie Mac Taps New Head for Affordable Housing

McLEAN, VA-Freddie Mac has tapped Shaun Smith to be senior director of Targeted Affordable Housing retail production for Freddie Mac Multifamily. This role was formerly held by Chris Hobbs, who retired in July.

Smith will lead the sourcing efforts and coordinate marketing efforts with constituents in the affordable housing market, including state and local allocators of subsidies and tax credits, policy makers, borrowers and lenders. She joined Freddie Mac Multifamily in 1999, and was previously the senior director of the TAH Underwriting and Credit team.

Affordable housing has been a cornerstone of the GSE's--both GSEs--mission. When it marked its 20th year in existence recently, Freddie Mac pointed to the focus it has placed on financing affordable housing in its multifamily transactions. "The vast majority of the multifamily mortgages Freddie Mac finances support individuals or families earning at or below the local area median income," David Brickman, Freddie Mac Senior Vice President of Multifamily," says in a prepared statement. "Many of the properties Freddie Mac finances would have trouble securing funding elsewhere because they are more than 10 years old, and many are in need of capital improvements."

The GSEs' support for affordable housing in the future, however, is in doubt, at least assuming if a measure introduced in the Senate this summer by Republican Bob Corker and Democrat Mark Warner is ever signed into law. The crux of the measure -- at least the area on which the industry has focused -- would eliminate the GSEs and replace them with a system in which the private market would purchase the home loans from lenders and then securitize them.

The bill would also eliminate the GSEs' affordable housing goals and replace them with counseling and rental assistance programs.

In an earlier interview with GlobeSt.com, Brickman declined to discuss possible changes to the GSEs under this measure.

The measure has some currency on the Hill and among Washington policy-makers. Pushback, of course, is guaranteed, not just from the finance community that relies on GSE support but also affordable housing advocates.

The National Low Income Housing Coalition, for example, has proven its willingness to hold Washington to account for promises made in this space--promises that it says have not been fulfilled. Last month the group, along with four individual plaintiffs and the Right to the City Alliance, filed a lawsuit against the Acting Director of the Federal Housing Finance Agency, Edward DeMarco, for failing to uphold Fannie Mae and Freddie Mac's statutory requirement to make contributions to the National Housing Trust Fund.

The Housing and Economic Recovery Act of 2008 established the National Housing Trust Fund. The law requires that Fannie Mae and Freddie Mac transfer a portion of the value of their new business to the National Housing Trust Fund—a requirement that was temporarily suspended by the Director of the Federal Housing Finance Agency when Fannie Mae and Freddie Mac were taken into conservatorship.

The plaintiffs maintain that the GSEs are solvent enough to start contributing to the fund and that thee conditions that prompted the suspension no longer exist. They point to 2012 Securities and Exchange Commission's filings that show that new business activity for Fannie Mae and Freddie Mac in 2012 was approximately $1.4 trillion.