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Credit unions support the same social program impacts identified in the Federal Housing Finance Agency’s Enterprise single-family social bond policy request for input, CUNA wrote to FHFA Wednesday. FHFA is considering establishing such a program for issuance by Government-sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac to investors.
The GSEs currently issue labeled multifamily social bonds and single-family affordable bonds comprised of loans originated under the GSE’s own affordable loan products. Social bonds include loans originated with specific social attributes and features, and the proceeds from those bonds can be used to promote positive social outcomes.
“Our credit union members have expressed the desire to explore how their lending activity can advance the borrower and social impacts that will be central to any single-family social bond program,” CUNA’s letter reads. “A key factor in assessing credit unions’ potential partnership depends on which loans are eligible to be part of the social bond program.”
CUNA adds that any credit unions loans that can be sold to the GSEs should be eligible for any single-family social bond program.
“To the extent a loan originated by a credit union is eligible for sale as a single-family loan to the Enterprises and has characteristics that can be used to place it in a single-family social bond pool, classifying that loan as one that is eligible for a single-family social bond program potentially increases the positive impacts of a single-family social bond program,” the letter reads. “For example, credit unions have noted that they may be able to enhance liquidity if loans that they originate to advance relevant social impacts and objectives can be included in the social bond program.”