Fannie Mae and Freddie Mac could buy eligible homebuilding loans

The federal housing finance regulator would allow Fannie Mae and Freddie Mac to buy eligible construction loans and package them into investments. Lenders listed in the bill or approved by the regulator would lend to builders or developers building homes for buyers to live in. Builders would supply at least 10% of project capital, counting land value. Supplemental loans could total up to $100,000 per home and $2.4 million per project. Lenders would document project finances, ability to finish, and local government approval or support. The regulator would set rates based on family affordability, operating costs, and expected losses.

Developers would sell each financed home to a family within the income limits and require the buyer to live there. The rules would cover every home built in a project financed with an eligible loan. Developers would record a binding property restriction requiring the buyer to live in the home. The one-year minimum stay would be required in the terms of the home sale.

Fannie Mae and Freddie Mac would set aside 22% of the money covered by the amended funding rules for eligible construction loans. The percentages would apply to the money governed by the funding rules amended for each company. The 22% share would support buying eligible construction loans and packaging them into investments.