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Finance and Economics Discussion Series: 2009-03 Screen Reader version

GSE Activity and Mortgage Supply in Lower-Income and Minority Neighborhoods: The Effect of the Affordable Housing Goals

Neil Bhutta



Figure 1:GSE Housing Goals and Performance
yearFannie Mae Underserved Areas ShareFreddie Mac Underserved Areas ShareUnderserved Areas Goal LevelFannie Mae Low and Moderate Income ShareFreddie Mac Low and Moderate Income ShareLow and Moderate Income Goal LevelFannie Mae Special Affordable ShareFreddie Mac Special Affordable ShareSpecial Affordable Goal Level
199323.621.8-34.229.7-9.77-
199429.525.2-44.837.4-15.211.3-
199531.926.4-42.338.9-14.112.8-
199628.1252145.641.14015.41412
199728.826.32445.742.6421715.214
19982726.12444.142.94214.315.914
199926.827.52445.946.14217.617.214
20003129.22449.549.94219.220.714
200132.631.73151.553.25021.622.620
200232.8313151.850.55021.420.420
200332.132.73152.351.25021.221.420
200433.532.33153.451.65023.622.720
200541.542.33755.1545226.324.322
200643.642.73856.955.95327.826.423
Notes: The "Underserved Areas" goal targets GSE purchases in low-income & minority neighborhoods: tracts with median family income less than or equal to 90% of the MSA median family income, or tracts with a minority population share of at least 30% and a median family income no greater than 120% of the MSA median family income. The "Low and Moderate Income" goal specifies a target share of purchases to borrowers with income below the MSA median family income. The "Special Affordable" goal targets borrowers with income below 60% of the MSA median family income and borrowers with income below 80% of the MSA median family income in a census tract that has a median family income less than or equal to 80% of the MSA median family income.
Return to Figure 1


Figure 3: Falsification Exercise: Discontinuity in GSE-Eligible Originations at GSE and non-GSE Cutoffs
CutoffCoefficient+2 Standard Errors-2 Standard Errors
0.750.00020.0370-0.0365
0.76-0.00080.0313-0.0328
0.77-0.01340.0209-0.0477
0.780.00250.0360-0.0309
0.79-0.00850.0247-0.0418
0.800.00540.0354-0.0245
0.810.02780.0581-0.0025
0.820.00480.0384-0.0287
0.83-0.01750.0091-0.0440
0.84-0.01110.0184-0.0405
0.85-0.00900.0202-0.0381
0.860.00450.0347-0.0256
0.87-0.00210.0232-0.0275
0.88-0.02490.0073-0.0572
0.89-0.00290.0238-0.0295
0.900.02740.05260.0022
0.910.02590.05080.0009
0.92-0.00020.0291-0.0295
0.93-0.02110.0051-0.0473
0.94-0.02030.0064-0.0471
0.95-0.00310.0219-0.0281
0.960.00780.0325-0.0170
0.970.01560.0400-0.0088
0.98-0.00060.0222-0.0233
0.990.00410.0291-0.0209
1.000.00280.0264-0.0208
1.010.00590.0304-0.0187
1.020.02330.0476-0.0011
1.03-0.01140.0117-0.0346
1.04-0.00570.0210-0.0323
1.05-0.00460.0204-0.0295
Notes: Each point represents the estimated discontinuity in (log) number of GSE-eligible originations in a tract between 1997 and 2002 from a seperate regression. Each regression includes tract covariates and scale variables and MSA-fixed effects, and bandwidth (h) is set to 0.02. Standard errors are clustered at MSA-level.
Return to Figure 3


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