Obama plan to shrink the government’s role in housing fuels debate

Members of Minnesota’s congressional delegation and housing advocates are reacting to proposals by the Obama administration to scale back the government’s role in the housing market. The Obama administration is calling for major reforms to Fannie Mae and Freddie Mac, which together own or guarantee about half of all mortgages in the U.S. The reforms aim to shift more of the risk of losses- like those we’ve seen during the housing crisis – to the private sector.

Minneapolis Democratic Congressman Keith Ellison says he supports making changes to Fannie and Freddie. But he says it’s important that homeownership remains an option for well-qualified buyers.

“The right thing to do is to put some things in place to make sure that Fannie and Freddie have to only accept well-underwritten loans where there is evidence and proof that the people can repay those mortgages.”

Some House Republicans – including Congresswoman Michele Bachmann – would like to see the government get out of the housing business.

The list of ideas for how to reform the government’s role in housing includes requirements for bigger down payments on home loans, and more support for affordable single family and rental housing.

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