Fed Paper: Were Fannie, Freddie Affordable Housing Goals Effective?

Critics of government-backed Fannie Mae and Freddie Mac have long blamed the companies’ affordable housing mandates from federal housing officials for steering the mortgage-finance companies into backing poorer quality loans.

But a new Federal Reserve staff paper argues that those affordable housing goals had a limited impact on the volume and type of loans that the companies guaranteed. That conclusion calls into question the role that those mandates may have played in the companies’ extraordinary losses that hastened their downfall.