The U.S. Department of Housing & Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) issued a joint statement Wednesday addressing an “incorrect” policy regarding Freddie Mac’s ability to purchase mortgages secured by a property owned by an individual and rented to a group home for persons with disabilities.
“The clarifications follow a HUD investigation of a mortgage lender who had refused to lend to a homeowner that was renting their property to a company that was operating a group home,” the joint statement reads. “The lender’s refusal was based on the incorrect belief that Freddie Mac would not agree to buy the mortgage. After HUD reported this misunderstanding to Freddie Mac and FHFA, Freddie Mac worked with both agencies and ultimately agreed to revise its policies and make this announcement to clarify that Freddie Mac has always been willing to buy these mortgages secured by a group home.”
Leaders of both agencies stated clearly they expect Freddie Mac to step up on similar loans in the future.
“Clarifying these policies regarding the eligibility of group homes for the secondary mortgage market is an important step to fulfilling the Fair Housing Act’s promise of providing individuals with disabilities equal access to housing opportunities,” said HUD Secretary Marcia L. Fudge. “We appreciate our colleagues at FHFA who share our goal of advancing fair housing and collaborated closely with us and Freddie Mac in helping to clarify these policies.”
“Group homes provide opportunities for persons with disabilities to live in the community among neighbors and access important opportunities for independent living,” said FHFA Director Sandra L. Thompson. “We are proud to stand with HUD to ensure that all people are afforded fair access to housing, recognizing that diverse experiences contribute to communities that thrive.”
Group homes are protected under the Fair Housing Act. They are dwellings occupied by unrelated persons with disabilities and provide opportunities for ongoing interaction and socialization in a familial setting.
Group homes must still meet other eligibility requirements applicable to other transactions to be eligible for purchase by Freddie Mac, the agencies said.