WASHINGTON — The Trump administration has taken a long-awaited stance on how it envisions a future housing finance system, and it resembles legislative proposals enabling Ginnie Mae to back multiple private-sector guarantors.
The Treasury Department made clear in a much-anticipated report that its ultimate preference is for Congress to take up reform of the government-sponsored enterprises. That legislation would include an explicit government guarantee, and a new Ginnie-provided backstop for guarantors competing on par with Fannie Mae and Freddie Mac.
Still, the 53-page report also backs reforms that federal agencies, including the Federal Housing Finance Agency, could take without legislation. And while the administration’s first choice is for Congress to implement an explicit guarantee, it does not view that provision as a requirement for Fannie Mae and Freddie Mac to exit conservatorship, according to the report.
“Although Treasury does not believe a Government guarantee is required, Treasury would support legislation that authorizes an explicit, paid-for guarantee backed by the full faith and credit of the Federal Government that is limited to the timely payment of principal and interest on qualifying mortgage-backed securities,” the report said.