Republicans blast FHFA plan to restart contributions to housing trust fund
Rep. Randy Neugebauer (R-Texas), chairman of the House Financial Services Subcommittee on Housing and Insurance, said he was "outraged" at Watt's decision and said the "timing could not be more suspect."
"Recent history should serve as a reminder that failed government housing policy can have catastrophic consequences for hardworking American taxpayers and the overall health of our economy," he said.
This is déjà vu all over again. Director Watt may have forgotten the path of destruction left by the GSEs, but the American people have not."
Fannie and Freddie needed about $190 billion to stay afloat during the financial crisis. Congress has yet to agree on a plan that would bring them out of conservatorship and reduce the risk for taxpayers.
"Contrary to what Fannie and Freddie apologists claim, the GSEs have yet to repay any of the taxpayer-funded bailout funds they received, which makes today's announcement by the FHFA outrageous. Money coming in from the GSEs should go to the taxpayers instead of a slush fund for ideological housing groups to play around with," said Rep. Ed Royce (R-Calif.), a member of the Financial Services panel who has worked on the issue.
Sen. Bob Corker (R-Tenn.), a member of the Senate Banking Committee, called the decision “beyond irresponsible to restart these affordable housing allocations without first dealing with the underlying problems at Fannie Mae and Freddie Mac."
"These two entities would not be generating one penny of revenue without taxpayer backing, and until the American taxpayers are taken off the hook for a future bailout, FHFA should continue to suspend payments to these funds," Corker said.
But Democrats said it is time to take steps to help families in need.
Rep. Maxine Waters (D-Calif.), ranking member of the House Financial Services Committee and co-author of legislation that created the fund, praised the announcement
"In the richest country in the world, it is unconscionable that there are 7.1 million American households for whom safe and decent housing is neither affordable nor available," she said.
By allocating a tiny percentage of Fannie Mae and Freddie Mac’s profits to these funds, we have the chance to improve the lives of millions of American children, families, people with disabilities and the elderly."
Several Democractic senators — Jack Reed (R.I.), Barbara Boxer (Calif.), Elizabeth Warren (Mass.) and Bernie Sanders (I-Vt.) — called the move "a smart step toward strengthening our economy and increasing the supply of affordable rental housing across the country."
"It will allow more renters to find the homes they need at prices they can afford and will help with economic development initiatives in low income or rural areas,” Reed said.
Housing and Urban Development (HUD) Secretary Julián Castro hailed the decision and said it "will help people across the nation secure a decent place to call home."