Biden Reveals Plan for Race-Based Federal Housing Subsidies

A new Biden administration plan creates race-based federal housing subsidies, Senate Republicans reveal.

The plan appears to offer financial incentives to Americans based on their race, which senators say would “needlessly politicize” a federal program to push a “progressive racial equity agenda.”

“The Equitable Housing Finance Plans announced on June 8, 2022 were developed by Fannie Mae and Freddie Mac (the GSEs) at the direction of the FHFA. The GSEs’ recently-released proposals would use Special Purpose Credit Programs to award race-based subsidies in the form of down payment assistance, lower rates, and reimbursements for appraisals,” reported Republican members of the U.S. Senate’s Banking Committee.

“The administration’s proposal seems intent on repeating the mistakes of the recent past. It is worth recalling the GSEs’ central role in the 2008 financial crisis,” wrote the Republican senators in a letter to the Federal Housing Finance Agency (FHFA) Director Sandra Thompson.

“Against this backdrop, we urge FHFA to reconsider these affirmative action housing subsidy plans for the following reasons: First, the plans are manifestly unfair and should be unconstitutional. Discrimination on the basis of skin color is simply wrong. That remains true even when intended to benefit minorities,” the senators write.

“Second, the plans risk setting up another generation of minority borrowers for failure. Black and other minority homeowners lost significant wealth as a direct result of lax underwriting by the GSEs before the crisis,” the senators continued. 

“Third, the plans raise significant legal concerns. By statute, FHFA’s mandate as conservator is to conserve and preserve each GSE’s assets and restore it to a sound and solvent condition. No law authorizes FHFA to use a GSE’s assets to pursue affirmative action in housing,” they add.

“Fourth, the plans are a return to GSE mission creep. The GSEs’ charters limit them to supporting the secondary market. These plans, however, contemplate that the GSEs would push into the title insurance market (through bulk purchases and attorney opinion letters), the appraisal market (through new valuation options), and even the lending market (through GSE-funded down payment assistance and GSE-provided homebuyer education). Finally, the plans needlessly politicize the GSEs. The administration is conscripting the GSEs as instrumentalities of its progressive racial equity agenda to achieve outcomes it cannot achieve legislatively or even legally,” the senators concluded.

The letter was also signed by Ranking Member Pat Toomey (R-Pa.) and U.S. Senators Tim Scott (R-S.C.), Thom Tillis (R-N.C.), Richard Shelby (R-Ala.), Mike Crapo (R-Idaho), Mike Rounds (R-S.D.), John Kennedy (R-La.), Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.), Jerry Moran (R-Kan.), Kevin Cramer (R-N.D.) and Steve Daines (R-Mont.).

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Michael Brigham

Michael Brigham has written for American Action News since the summer of 2019. His areas of expertise include foreign affairs, government, and politics, but regardless of the subject matter, he has a nose and an insatiable appetite for news. In his free time, he enjoys reading nonfiction, watching a mix of comedies and true crime documentaries, and spending time away from the swamp hiking in the foothills of the Appalachian Mountains.