Just to annoy you a little more:
Fannie Mae, etc. were originally part of the budget, not quasi privatized agencies. But in order to show a smaller budget deficit during the Vietnam War, they were spun off in their current format. This got them off the books
Please include the wikipedia cite for this articleOriginally posted by Gotta Speakup
On the ground, protecting the Cyburbia Shove since 2004.
Sorry. I don't know if there is a Wikipedia reference on this. Look up the housing act of 1968. It might include a citation.Please include the wikipedia cite for this article
Alternatives: try googling Fannie Mae budget 1968.
Or see the book written Archaya called Doomed to fail. It's a history of Fannie Mae
Just read that Freddie is now, as of the end of March, barring financing of apartments in NYC residential condo buildings until they are 75% sold (next to impossible these days) AND requiring 45% down. Despite the fact that such units have some of the lowest default rates in their portoflio. As usual, no similar tightening of their single family lending policy... guess they figure they can mess with urbanites (yet again... as has been their wont since they were first forced to provide financing for apartments in 1993) while continuing to grease the wheels for richest among the exurban mcmansion set. Most likely this is a result of portfolio "rebalancing" - single family home sales are bad enough that the portfolio probably started biasing toward multi-unit just on market activity alone, which means, of course, they just have to restrict lending to multi-unit ('cause all of a sudden they're more than 10% of the portoflio! wow!). Brilliant.
Typical anti-density policy of the type that led to massive sprawl over the last 40 years, while simultaneously wiping out the economy.. and yet another reason why these less-than-useless insults to the concept of free markets just need to be ended. The American GSE motto: central planning for sprawl by socializing risk and privatizing bubble-induced price appreciation.
Last edited by Cismontane; 19 Apr 2011 at 4:16 PM.
Things are definitely tougher, but not quite as bad as you suggest. Mostly, they are moving back to the old system where every building had to be individually approved.
Here is the NY Times on the changes, published back in January.
http://www.nytimes.com/2011/01/16/re...?ref=mortgages
That was the earlier announcement for FHA, not the GSEs (FHA is sort of a GSE, but it's run by HUD). Fannie and Freddie (the GSEs) adopted new requirements after that date (which may be regionally specific, but I don't think so.. now that I reread the darn circular we got). And sorry.. it's 70% presold, not 75% before first-dollar eligibility. These are some of the other requirements, to be met even to be considered for their eligible buildings list:
- No more than 20% of the property's space can be used for commercial purposes [I guess this is Fannie and Freddie's anti-new urbanism, mixed-use rul]
- No more than 15% of the units can be more than 30 days delinquent on their HOA dues;
- No more than 10% of the units can be owned by a single entity;
- If there are 20 or more units, the HOA must have fidelity insurance [um... huh? where did this come from?];
- For new development, 70% of the units must be pre-sold. Projects offering excessive seller concessions are deemed ineligible for financing [double-huh? so, if I build workforce housing with financing subsidies as seller concessions, then I'm ineligibly? what's that all about?];
- If you are buying your condo as an investment, at least 51% of the units must be owner-occupied. Otherwise, there is no owner-occupancy requirement [again, difficult given that, to secure financing, landlords will keep back blocks of units these days, as rentals.. also, effectively prevents inclusionary housing for mixed-ownership and rental buildings];
- Unless the project's insurance covers your interior, you must obtain an H-06 hazard insurance policy for at least 20% of the unit's value as a condition of financing approval [do they just make these things up to make life more difficult for people?];
-The HOA must have capital reserves of at least 10% of its budgeted income [yeah right].
The 45% down-payment rule might be regionally-specific.. since I can't find it cited as a national condo/multi-unit requirement.
Anyway.. this is all bizarre because condos are the best part of their portfolio, from a default risk perspective. This is utter nonsense.
Last edited by Cismontane; 19 Apr 2011 at 6:49 PM.
Amusingly enough, the Wikipedia reference is right here: http://en.wikipedia.org/wiki/Fannie_Mae#cite_note-10
Krishna Guha, Saskia Scholtes, James Politi: Saviours of the suburbs, Financial Times, June 4, 2008, page 13
Cool. I dont particularly use Wikipedia for these more nuanced kinds of evidence. Its great for finding out what year a person was born, but policy issues often get shaded by posters.
I don't allow students to cite Wikipedia in class, nor does any other professor I know of. But we all use it for basic fact checking.
Aside: I swear that reference to it being privatized in the 1960s did not include the tax implications. I notice that there were a number of rewrites in the last ten days. Did one include adding this in?
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