A new report published by the Urban Institute looks at the central role of homeownership in building lasting and multigenerational wealth for Black households. “Closing the Gaps: Building Black wealth through homeownership” examines the wealth gap for Black and Hispanic households compared to White households, which exceeds income disparities.

“Homeownership plays a bigger role in creating wealth for Black families than it does for White families,” authors Alanna McCargo, Urban Institute vice president of housing finance policy, and Jung Hyun Choi, research associate, write. Because housing equity accounts for almost 60% of net worth for Black households compared to 43% for White households, the report says homeownership – although it “should not be the only focus of public policy and wealth building for Black households” – is a “solid foundation for building wealth.” The report also warns that Black households have been disproportionately impacted by COVID-19; “The pandemic is shining a light on inequality in health care, housing, and education. Black and Hispanic households represent the most financially vulnerable and housing insecure, as they are disproportionately represented in the industries hardest hit by job losses.”

Throughout 2020, NHC’s Black Homeownership Working Group has been working on a 12-point plan to close the Black homeownership gap by addressing obstacles to homeownership and policies that worsen racial wealth disparities. In the new year, NHC will formalize its plan to increase Black homeownership by 3 million households by 2030. NHC’s recent Solutions for Affordable Housing convening also featured a panel discussion of opportunities to support existing and future Black homeowners under the new administration.

On Tuesday, the Senate Banking Committee convened a hearing to review CARES Act implementation with Treasury Secretary Steven Mnuchin and Federal Reserve Board Chairman Jerome Powell. The conversation turned to GSE reform when Sen. Mike Rounds (R-S.D.) asked Secretary Mnuchin to comment on the appropriate timeline for release from conservatorship.

“Housing has been one of the bright spots of our economy during the pandemic and I want to make sure that we do everything we can to continue providing the necessary support,” said Sen. Rounds. “I am concerned that if recent conversations come to fruition and Fannie and Freddie are prematurely released from the Federal Housing Finance Agency's (FHFA) control the strength we’ve seen in the housing sector could be called into question.” Mnuchin responded saying, “I don’t think they should be let out from conservatorship without appropriate capital.” With respect to timing, Mnuchin said the “appropriate scenario” includes the accumulation of real capital and eventual release.

Sen. Rounds also asked Chairman Powell to comment on the impact to the housing market if an end to conservatorship occurred during the pandemic or post-pandemic recovery. Powell echoed Mnuchin’s comments, saying he’d “like to see the GSEs return to private hands over time…time needs to be taken.”

Later in the week House Financial Services Committee Chair Maxine Waters (D-Calif.) weighed into the discussion, sending a letter to FHFA Director Mark Calabria urging him “to fully engage with Congress, halt all efforts to raise the capital requirements for Fannie Mae and Freddie Mac and halt all efforts to release them from conservatorship.”

Both FHFA and the Department of Housing and Urban Development (HUD) published new loan limits that will go into effect on Jan. 1. FHFA raised the maximum conforming loan limit for single-family mortgages backed by Fannie Mae and Freddie Mac from $510,400 in 2020 to $548,250 in 2021. FHFA also raised the ceiling for high-cost areas to $822,375. The increases reflect the more than 7% jump in home prices from the third quarter of 2019 to the third quarter of 2020, recorded by the FHFA House Price Index. “With home prices setting records in many U.S. markets, the National Association of REALTORS® (NAR) is pleased to see FHFA raise its national conforming loan limits for 2021,” said NAR President Charlie Oppler.

Shortly after FHFA’s release, HUD announced the new 2021 loan limits for Federal Housing Administration (FHA) mortgages. FHA increased its floor to $356,362 and its high-cost ceiling to $822,375. Assistant Secretary for Housing and Federal Housing Commissioner Dana Wade called into question the historically high loan limits, which have increased steadily in recent years. These increases have put FHA “in a position to serve a segment of borrowers [who] may be better-served by the conventional market,” said Wade. “FHA’s mission is to support low-to-moderate income borrowers, so why does the law permit FHA to insure mortgages up to $822,375? This is a question for Congress and the taxpayers who stand behind FHA to answer.”

FHFA announced the extension of its moratorium on foreclosures of single-family mortgages backed by Fannie Mae and Freddie Mac. The protections also extend to evictions for real estate owned properties. The moratorium was set to expire on Dec. 31 but has been extended through Jan. 31.

“Extending Fannie Mae and Freddie Mac's foreclosure and eviction moratoriums through January 2021 keeps borrowers safe during the pandemic," said FHFA Director Mark Calabria. “This extension gives peace of mind to the more than 28 million homeowners with an Enterprise-backed mortgage."

HUD's foreclosure moratorium is still scheduled to expire at the end of December. Throughout the pandemic, the two agencies have been relatively aligned in their extensions of the moratoria.