James Kleimann on FHFA’s elimination of SPCPs and the recision of UDAP
Mar 27, 2025
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In this discussion, James Kleimann, Managing Editor at HousingWire, dives into critical housing orders from the FHFA's Bill Pulte, focusing on the elimination of Special Purpose Credit Programs and the recision of UDAP. He analyzes the limited impact of these changes on affordable housing initiatives and the pressing need for clearer regulatory guidelines on climate risks in mortgage lending. The conversation also touches on current conforming loan limits and their implications for the housing market amidst evolving lending practices.
The termination of Special Purpose Credit Programs by the FHFA marks a notable shift in affordable housing initiatives affecting access for certain borrowers.
The rescinding of the UDAP bulletin aims to reduce compliance burdens for lenders while potentially impacting consumer protections against discriminatory practices.
Deep dives
Changes to Special Purpose Credit Programs
The recently announced termination of Special Purpose Credit Programs (SPCP) by the FHFA director Bill Pulte signifies a significant shift in affordable housing initiatives offered by Fannie Mae and Freddie Mac. These programs were designed to assist borrowers who met most qualification criteria but faced challenges like meeting down payment requirements. While the SPCP provided financial grants to help bridge affordability gaps, its impact in 2023 was limited, accounting for only 0.8% of mortgage loans originated that year. Loan officers who relied on these programs must now pivot towards alternative options such as FHA loans or state-level housing finance agencies, though the available resources may not fully replicate the accessibility the SPCP offered to certain communities.
Rescission of Unfair Practices Regulations
The rescinding of the UDAP (Unfair or Deceptive Acts or Practices) regulatory bulletin has been welcomed by many industry professionals who viewed it as unnecessary red tape that increased overall costs for consumers in the mortgage market. Bill Pulte suggested that the FTC should retain authority over UDAP enforcement, which many believe will alleviate compliance burdens previously faced by servicers and lenders. Although some advocates had previously championed UDAP as a means to address potential discrimination, its practical enforcement and impact on the market had been minimal. By removing these provisions, Pulte aims to streamline operations within the FHFA, thereby potentially reducing costs for consumers across the board.
Withdrawal of Climate Risk Management Framework
The decision to halt the development of a climate risk management framework by the FHFA is poised to have far-reaching implications, especially in the context of increasing climate-related events affecting the housing market. Previously, under the Biden administration, efforts were made to create a quantitative assessment of climate risks pertinent to Fannie Mae and Freddie Mac's mortgage portfolios. The current administration's shift signals a lack of prioritization toward the identification and management of climate-related financial risks, despite the mounting frequency of natural disasters. This withdrawal of regulatory focus raises concerns about the future management of properties susceptible to climate impacts, as lenders lose insight into the potential liabilities associated with such risks.
On today’s podcast, Editor in Chief Sarah Wheeler talks with Managing Editor James Kleimann about a series of housing orders from FHFA Director Bill Pulte on climate risk, UDAP and special purpose credit programs.
The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate stories. Hosted and produced by the HousingWire Content Studio.
