This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Affordable Housing Takes Center Stage for 2014

Stocks in this article: XHB SPY

In contrast to current acting director Edward DeMarco, who has interpreted his role as conservator of the agencies more strictly and has worked to reduce the dominance of the agencies, Watt is expected to do more to support the mortgage market and ease credit conditions.

He has already said he would delay a recently announced proposal to raise guarantee fees on mortgages backed by Fannie and Freddie, a move that would have raised interest rates on mortgage loans conforming to GSE guidelines.

Other controversial moves such as a plan to reduce the volume of multifamily loans purchased by Fannie and Freddie by 10% and a proposal to reduce the size of single-family home loans purchased by the agencies are also likely to be delayed or abandoned under Watt, according to analysts.

On the rental side, Lazio expects Watt to reinstitute the Housing Trust Fund that was established under the Housing and Economic Recovery Act of 2008. The trust fund was originally expected to be financed by an assessment on new mortgage lons purchased by the GSEs. Under the plan, grants would be provided to states and state-designated entities, with at least 80% of the fund used for rental housing; up to 10% for homeownership and up to 10% for the grantee's reasonable administrative and planning costs.

However, when the GSEs were taken into conservatorship in late 2008, they suspended payments into the fund.

Now that Fannie and Freddie are profitable again, there have been calls to re-establish the fund. The fund would not require congressional approval, but with the agencies in conservatorship, it would mean diverting taxpayer money from the Treasury and towards the Trust Fund.

As a Republican focused on affordable housing, Lazio himself favors increasing the allocation to the Low-Income Housing Tax Credits, a program that has enjoyed bipartisan support. "It gets private capital involved. The states decide who gets awarded credit. There is no federal bureaucracy. It is flexible, there is no one-size-fits-all approach," says Lazio, listing the reasons the scheme has won the favor of both parties.

Lazio acknowledges that it is very hard to argue for new spending in the current fiscal climate. His solution is to refocus the mortgage interest deduction so that it targets lower income borrowers and not the homeowners making more than $200,000 a year, whom he contends do not need support.

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs