The American dream is at stake if low-income earners can't own a home
Even as multiple people rightfully express concerns over the federal tax bill, we should not lose sight of one of the major pillars of homeownership; Fannie Mae and Freddie Mac. The government-sponsored enterprises (GSEs) exist to make the promise of homeownership attainable for individuals of low- and moderate means.
For many people, the dream of homeownership is only attainable through federal guarantees, or loans insured by the federal government. The federal backing provided by the GSEs ensures banks will be paid if the borrower defaults on their loan. This guarantee is critical for the borrower and the lender, as it protects them both.
Without this critical guarantee, many banks would be unwilling to finance home loans, making the promise of the American dream elusive for hardworking families.
As successful as this program has been, it is now in trouble. However, to understand the present, one must consider the past.
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