This week the Wall Street Journal Editorial Board took aim at the Biden Administration and housing giants Fannie Mae and Freddie Mac, criticizing their new race-based mortgage lending program.
The new program expressly favors black borrowers by subsidizing their down payments, covering closing costs, and even paying for home repairs after the sale. All of this, of course, will be paid for by the taxpayer.
These subsidies appear to apply exclusively to black borrowers and do not extend to other racial minorities such as Hispanics or Asians.
As the Editorial Board points out, such policies are probably unconstitutional and will be challenged in federal court. Moreover, the politically motivated lending policies of the early 2000s, led by former Massachusetts Rep. Barney Frank, led to disastrous financial consequences for Fannie Mae and Freddie Mac. Both entities were bailed out at by taxpayers at a total cost of $190 billion.
The WSJ opinion piece concludes
Making home ownership affordable is a worthy goal, but more subsidies that endanger taxpayers aren’t the answer. Housing costs are high because of inflationary monetary policy and regulatory and zoning limits on supply. No economic good, and much social harm, will come from turning Fannie and Freddie into agents of progressive racial division.
Law Office of Justin R. McCarthy 