Some of Fannie Mae’s biggest defenders on Capitol Hill are having second thoughts about the mortgage giant following its decision to back debt issued by private-equity firm Blackstone to invest in rental homes.
A group of 10 House Democrats this week complained to Fannie’s government caretaker about the news that the bailed-out government-sponsored enterprise had agreed to back $1 billion in debt from Blackstone’s Invitation Homes, the biggest owner of rental housing in the U.S.
In a letter sent Wednesday to Mel Watt, the head of the Federal Housing Finance Agency responsible for overseeing Fannie, the Democrats wrote that the decision “leaves us questioning the true mission of the agency.”
Led by Rep. Michael Capuano, D-Mass., a member of the House Financial Services Committee, the Democrats wrote that it is “troubling” if Fannie, which enjoys government guarantees of its debt, is aiding private equity rather than focused on housing opportunities for people without resources.
“Without being privy to Fannie Mae’s plans before they were exposed in the media,” the Democrats wrote, “supporters of the agency have to wonder if it is going down the same path it did prior to the housing crisis — chasing profits at the expense of its primary mission.”
Fannie Mae, along with the other government-sponsored enterprise, Freddie Mac, already faces opposition among many conservative members of Congress. In 2013, Republicans on the House Financial Services Committee advanced legislation that would have shuttered the two companies, over the objections of Democrats who said that doing so without replacing the government guarantee for mortgage securities would make 30-year, fixed-rate mortgages a thing of the past.
Fannie and Freddie have remained under the direction of the Federal Housing Finance Agency since 2008, when they were bailed out.
