The Twin Mandates Given to the GSEs: Which Works Best, Helping Low-Income Homebuyers or Helping Underserved Areas?
Issue Date
2001Author
McClure, Kirk
Publisher
Office of Policy Development and Research of the U.S. Department of Housing and Urban Development.
Type
Article
Article Version
Scholarly/refereed, publisher version
Published Version
https://www.huduser.gov/portal/periodicals/cityscpe/vol5num3/index.htmlMetadata
Show full item recordAbstract
This research examines the twin mandates of the GSE Act of 1992: to direct mortgage
credit to neighborhoods that have been underserved by mortgage lenders and
to direct mortgage credit to low-income and minority households. Using the Kansas
City metropolitan area as a test site, data from the GSEs have been compared with
non-GSE mortgage lenders to determine the performance of the GSEs in meeting
these two objectives.
This research finds that the GSEs have not performed as well as the conventional
lenders. Independent of the use of the secondary mortgage market, borrowers are
better served if credit is directed to them independent of location. The alternative
approach of directing credit to underserved areas is helpful only insofar as it helps
to direct credit to neighborhoods that are marginally less desirable than the neighborhoods
deemed to be well served.
Collections
Citation
McClure, K. (2001). The Twin Mandates Given to the GSEs: Which Works Best, Helping Low-Income Homebuyers or Helping Underserved Areas? Cityscape, 5(3), 107-143.
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