Federal Housing Agency Aims to Overhaul Lending Mission as Home Prices Soar

The Federal Housing Finance Agency (FHFA) says in a new report it is time to update the Federal Home Loan (FHL) Banks system to provide the public with a distinction between these banks and the Federal Reserve. The FHFA’s comprehensive review comes as the United States is entrenched in a housing affordability crisis, from higher real estate prices to ballooning mortgage costs. In its report, the FHFA explained that the purpose behind FHL is to ensure a steady flow of liquidity to member institutions and support housing and community development. However, the report’s authors argue that there needs to be a better distinction between the Federal Reserve’s emergency lending facilities for troubled banks and the FHL’s secured advances, adding that the system “does not have the functional capacity to serve as the lender of last resort for troubled members that could have significant borrowing needs over a short period of time.”...