An Analysis of the Effects of the GSE Affordable Goals on Low- and Moderate-Income Families

Since 1993 Fannie Mae and Freddie Mac, the two large government sponsored enterprises (GSEs) that provide a secondary market for conventional home mortgages, have been subject to quantitative goals for the portion of their business that represents mortgages on housing for lower income families and families in underserved areas. The GSEs have more-or-less steadily increased their performance under the goals. Nevertheless, questions have been raised concerning the ultimate effects of the goals on low- and moderate-income families and underserved neighborhoods. This study seeks to address such questions by providing a conceptual framework for the impacts of the goals and through statistical analysis.