Year Published
2005
Abstract
This study evaluates the effects of GSE mortgage purchase activity on homeownership and housing
conditions among communities that are the focus of the 1992 GSE Act and the HUD affordable
housing goals. To identify GSE effects, the test framework exploits differences in the definition of
lower-income neighborhoods under the 1992 GSE Act, which establishes regulation for the GSEs, and
the 1977 Community Reinvestment Act, which lays out regulation for Federally-insured depository
institutions. Research findings indicate limited direct effects of GSE loan purchase activity on local
housing markets. However, results do evidence a threshold level of GSE activity below which
significantly adverse local housing market outcomes are recorded. These findings suggest the
importance of GSE home loan purchases among low-income neighborhoods in efforts to achieve the
GSE and HUD affordable housing goals.
conditions among communities that are the focus of the 1992 GSE Act and the HUD affordable
housing goals. To identify GSE effects, the test framework exploits differences in the definition of
lower-income neighborhoods under the 1992 GSE Act, which establishes regulation for the GSEs, and
the 1977 Community Reinvestment Act, which lays out regulation for Federally-insured depository
institutions. Research findings indicate limited direct effects of GSE loan purchase activity on local
housing markets. However, results do evidence a threshold level of GSE activity below which
significantly adverse local housing market outcomes are recorded. These findings suggest the
importance of GSE home loan purchases among low-income neighborhoods in efforts to achieve the
GSE and HUD affordable housing goals.
Research Category