Suspension of recent PSPA amendments restricting Fannie Mae and Freddie Mac is in line with administration’s goal to boost housing supply

The Treasury Department and FHFA announced Tuesday that they are suspending certain requirements that were added in January to the Preferred Stock Purchase Agreements (PSPAs) between Treasury and Fannie Mae and Freddie Mac.

Under those requirements, Fannie Mae had restricted its acquisition of loans secured by second homes and investment properties to 7% of its total single-family acquisitions and applied stricter underwriting to those loans.

Treasury’s statement on the suspension sought to clarify its reasoning for the change.

“The suspension of these PSPA requirements recognizes that FHFA has the authority and responsibility for the Enterprises’ safety and soundness and to foster housing finance markets that support sustainable homeownership, and is not intended to stimulate aggregate housing demand given current conditions in the housing market,” the Treasury stated in a Tuesday afternoon press release.

“Home prices have been accelerating rapidly, with the annual rate of national home price growth at multi-decade highs,” the Treasury release continued. “A principal challenge for the U.S. residential housing market today is inadequate housing supply. The Administration is focused on promoting housing stability, which includes advancing housing policies that can sustainably increase the stock of affordable housing units for rent and ownership.”