Rep. Malliotakis’ legislation could make $250 billion available for middle-class housing

STATEN ISLAND, N.Y. — Bipartisan federal legislation backed by Rep. Nicole Malliotakis could make $250 billion available for middle income housing around the country.

Rep. Tom Suozzi, a Democrat representing part of Queens and Long Island, introduced the legislation June 30 with Malliotakis, a Republican representing Staten Island and part of South Brooklyn.

The legislation, known as the “Housing for US Act,” would require up to $250 billion in federal funds generated by an end to the Fannie Mae and Freddie Mac conservatorships to be used for middle income housing over 10 years.

“If Fannie and Freddie are released, the government could recoup $250 billion,” Suozzi said. “We should capitalize on this moment by using these funds to build homes for men, women, and families in the American middle class, and we should pay union workers to do it. It’s good for the economy, good for families, and good for America.”

In 2008, the federal government brought Fannie Mae and Freddie Mac under the conservatorship of the Federal Housing Finance Agency amid the financial crisis ongoing that year.

The federal government established Fannie Mae, officially known as the Federal National Mortgage Association, in the 1930s as a way to improve the stability of American homeownership through more liquidity in the mortgage market.

Fannie Mae reorganized in 1968 as a publicly traded, shareholder-owned company, according to the Federal Housing Finance Agency.

Congress chartered Freddie Mac, officially known as the Federal Home Loan Mortgage Corporation, in 1970 as a private company expanding the secondary mortgage market.

President Donald Trump has expressed interest in ending the conservatorships over both companies, returning them to a degree of privatization and generating a substantial windfall for the federal government.

The bill from Suozzi and Malliotakis would require that windfall to fund state-administered loans for homeownership and rental programs run by municipalities or non-profit organizations.

Construction financed by those programs would come with union requirements and the units generated would be for middle-income Americans based on a given area’s median income.

“The introduction of the Housing for US Act is a unique, bipartisan collaboration that can trigger affordable housing development reserved for this population while also creating countless family-sustaining union careers that will generate key economic stimulus and boost our local communities for generations to come,” Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, said. “Let’s free Fannie and Freddie and use the proceeds to build homes for American workers by American workers.”

After 10 years, any funds remaining from the loan program could be used exclusively for deficit reduction under the legislation.

Suozzi and Malliotakis estimate as many as 3.5 million units of housing could be generated by the loan program.

“I join Rep. Suozzi in introducing bipartisan legislation that, should Fannie Mae and Freddie Mac be released from conservatorship, would assign the proceeds toward a new housing revolving loan fund to expand homeownership and rental opportunities for working- and middle-class Americans including police officers, firefighters, teachers, carpenters, and tilers who often earn too much to qualify for affordable housing but not enough to afford market rates,” Malliotakis said. “This is a chance to deliver critical assistance to hard working Americans.”