Fannie Mae Ends Declining Markets Policy

In March, the Oak Park Regional Housing Center led an advocacy campaign to end Fannie Mae’s declining markets policy. The Housing Center was assisted by fair housing consultant Stella Adams and staff from the Lawyers’ Committee for Civil Rights Under Law, the NAACP, and the Woodstock Institute.

The Housing Center negotiated on the behalf of over 80 organizations and government commissions across the nation. Our fundamental opposition to the policy was rooted in its use of ZIP codes as a basis for determining the amount of down payment required of a borrower. We understood this policy to be akin to redlining and negotiated with Fannie Mae, the nation’s largest underwriter of mortgages, to remove the geographic determinants of the policy.

Largely due to conversations the Housing Center and Ms. Adams held with Fannie Mae, the policy will end on June 1. Fannie will institute a national policy in its place that does not include geography as a determinant. In addition, the nation’s second largest underwriter of loans, Freddie Mac, will follow suit and abandon its declining markets policy as well.

This victory provides an example of the Housing Center’s leadership in the fair housing community. Because of our strong commitment to fair housing principles and our solid community base, we were able to take a lead role in ensuring that national underwriting policy provided the fairest terms possible. Moreover, this change will benefit the communities we serve by ensuring that Fannie Mae’s lending policies do not create disincentives for borrowers looking to call Oak Park, Berwyn, and other western suburbs home.

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