Performance of the GSEs at the Metropolitan Level

This article examines differences in the number and percent of government-sponsored enterprise (GSE) purchases of single-family loans made to minorities and low- and moderate-income borrowers in metropolitan statistical areas (MSAs) across the country. The objective of the research was to determine...

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Bibliographic Details
Published in:Cityscape (Washington, D.C.) D.C.), 2001-01, Vol.5 (3), p.145-217
Main Authors: Boxall, Patrick, Silver, Joshua B.
Format: Article
Language:English
Subjects:
Affordable housing
Bank loans
Collaboration
Conforming loans
Home ownership
Housing
Lenders
Loans
Metropolitan areas
Mortgage loans
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Summary:This article examines differences in the number and percent of government-sponsored enterprise (GSE) purchases of single-family loans made to minorities and low- and moderate-income borrowers in metropolitan statistical areas (MSAs) across the country. The objective of the research was to determine whether differences in the extent of institutional relationships among the GSEs, lending institutions, Government agencies, and nonprofit community-based organizations explain differences across MSAs in the GSEs' purchases of loans made to traditionally underserved populations. The article begins with a review of the national context for considering GSE performance at the metropolitan level. The authors show that, across all MSAs, the percentage of GSE loan purchases that qualify for the affordable housing goals is greatest in markets where lenders themselves make more loans to underserved populations and where median incomes are relatively high. The article includes four metropolitan-area case studies that examine the contribution of institutional relationships to GSE purchases of loans made to minority and low- and moderate-income populations in Washington, D.C.; Houston, Texas; Columbus, Ohio; and Pittsburgh, Pennsylvania. The authors find that the GSEs purchase higher percentages of loans made to underserved populations in case study areas where linkages are the strongest between the GSEs and the local affordable housing system. They conclude that institutional relationships can bolster the GSEs' efforts to serve minority and low- and moderate-income populations. The article concludes with recommendations regarding local planning processes, the national GSE affordable housing goals, and the GSE data reporting system.
ISSN:1936-007X