Home builders plan would change consumer access to housing credit

Whether moving out of state or moving next door, the National Association of Home Builders has a new plan for how consumers would gain access to housing credit.

NAHB's plan would significantly restructure the nation's housing finance system, the association announced March 2. Private housing entities would purchase single and multi-family home mortgages, not Fannie Mae and Freddie Mac. Under the NAHB scheme, the role of the federal government would be reduced to "insurer of last resort in order to reduce the risk to taxpayers,” according to the organization's chairman Barry Rutenberg.

In much the same way that the government guarantees bank deposits insured by the Federal Deposit Insurance Corporation, the government would back privately funded mortgage securities, which investors around the world could purchase. Agencies such as the Department of Housing and Urban Development, the Federal Housing Administration and the Department of Veterans Affairs, all of which currently back mortgages, would remain under the NAHB plan.

“Our plan seeks to overhaul the housing finance system to ensure that housing credit is available and affordable in the future and is delivered through a competitive, efficient, sound, safe and stable system,” Rutenberg said.

Housing credit has been more readily available in recent weeks and months with mortgage interest rates at near record lows. For the week ending March 1, the average rate for a 30-year fixed mortgage was 3.9 percent, according to Freddie Mac.