A Pathway to Shutting Down the Federal Housing Finance Enterprises
Since the New Deal–era federal housing policies of the 1930s, Congress has cobbled together a system of federal housing finance enterprises (FHFEs) that today cover more than $6 trillion (60 percent) of the outstanding single-family residential mortgage debt in the U.S. The federal government has used the FHFEs to accomplish various policy goals—housing policies too often advanced under the notion of creating “affordable” homeownership opportunities. Over time, these policies have encouraged unsustainable levels of mortgage debt for millions of homeowners, and were central to several devastating downturns in the U.S. housing market. Overall, these policies have harmed American homeowners, cost federal taxpayers hundreds of billions of dollars in bailouts, and undermined the resilience of the housing finance system. It is time that Congress end these failed experiments of the federal government, and restore the conditions for a free enterprise in housing finance by shutting down these FHFEs.