Key Issues > Federal Government's Role in Housing Finance
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Federal Government's Role in Housing Finance

The federal government has played an increasingly active role in housing finance since the start of the 2007 financial crisis, exposing the federal government and taxpayers to risks.

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  • Congress established the government-sponsored enterprises (enterprises) Fannie Mae and Freddie Mac to provide stability in the secondary market for residential mortgages and serve the mortgage credit needs of targeted groups.
  • In September 2008, the Federal Housing Finance Agency placed the enterprises in conservatorship out of concern that their deteriorating financial condition would destabilize the financial system. By the end of 2013, the enterprises had received $187 billion in federal assistance.
  • Congress and the Executive Branch face difficult decisions on how to restructure the enterprises and promote housing opportunities while limiting risks to taxpayers.
  • The Department of Housing and Urban Development's (HUD) Federal Housing Administration (FHA) has helped millions purchase homes by insuring private lenders against losses from defaults on FHA-insured single-family mortgages.
  • Ginnie Mae, another HUD component, guarantees the timely payment of principal and interest for securities backed by federally insured or guaranteed mortgages.
  • Due partly to the contraction of other mortgage market segments, FHA's and Ginnie Mae's business volumes have risen sharply in recent years. This growth highlights the need for these entities to properly manage financial risks while meeting the housing needs of borrowers.
Looking for our recommendations? Click on any report to find each associated recommendation and its current implementation status.

FHA Mortgage Insurance:

Applicability of Industry Requirements Is Limited, but Certain Features Could Enhance Oversight
GAO-13-722:
Published: Sep 9, 2013. Publicly Released: Oct 22, 2013.

Federal Housing Administration:

Analysis of Options for Modifying Its Products, Market Presence, and Powers
GAO-13-682:
Published: Sep 9, 2013. Publicly Released: Oct 22, 2013.

Mortgage Financing:

Fannie Mae and Freddie Mac's Multifamily Housing Activities Have Increased
GAO-12-849:
Published: Sep 6, 2012. Publicly Released: Oct 9, 2012.

Ginnie Mae:

Risk Management and Cost Modeling Require Continuing Attention
GAO-12-49:
Published: Nov 14, 2011. Publicly Released: Dec 1, 2011.

Federal Housing Administration:

Improvements Needed in Risk Assessment and Human Capital Management
GAO-12-15:
Published: Nov 7, 2011. Publicly Released: Nov 7, 2011.

More Reports

Financial Audit:

Federal Housing Finance Agency's Fiscal Years 2013 and 2012 Financial Statements
GAO-14-171R:
Published: Dec 16, 2013. Publicly Released: Dec 16, 2013.

Housing:

Overview of GAO's Past Work on FHA's Single-Family Mortgage Insurance Programs
GAO-13-400R:
Published: Mar 7, 2013. Publicly Released: Mar 7, 2013.

Financial Audit:

Federal Housing Finance Agency's Fiscal Years 2012 and 2011 Financial Statements
GAO-13-124R:
Published: Nov 15, 2012. Publicly Released: Nov 15, 2012.

Management Report:

Opportunities for Improvement in the Federal Housing Finance Agency's Internal Controls
GAO-12-499R:
Published: May 16, 2012. Publicly Released: May 16, 2012.

Mortgage Financing:

FHA and Ginnie Mae Face Risk-Management Challenges
GAO-12-578T:
Published: Mar 29, 2012. Publicly Released: Mar 29, 2012.

Financial Audit:

Mortgage Reform:

Potential Impacts of Provisions in the Dodd-Frank Act on Homebuyers and the Mortgage Market
GAO-11-656:
Published: Jul 19, 2011. Publicly Released: Jul 19, 2011.

Management Report:

Financial Audit:

Federal Housing Finance Agency's Fiscal Years 2010 and 2009 Financial Statements
GAO-11-151:
Published: Nov 15, 2010. Publicly Released: Nov 15, 2010.

Financial Markets and Institutions:

The Cooperative Model as a Potential Component of Structural Reform Options for Fannie Mae and Freddie Mac
GAO-11-33R:
Published: Nov 15, 2010. Publicly Released: Nov 15, 2010.
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  • portrait of Mathew J. Scire
    • Mathew J. Scire
    • Director, Financial Markets and Community Investment
    • ScireMJ@gao.gov
    • (202) 512-8678
  • portrait of William B. Shear
    • William B. Shear
    • Director, Financial Markets and Community Investment
    • shearw@gao.gov
    • (202) 512-8678