Fannie Mae and Freddie Mac lending patterns along the Texas-Mexico border

Mathew S McElroy, University of Texas at El Paso


Home ownership is among the most important ways for any family to build wealth, but unfortunately differences between ethnic and income groups persist. The Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac, have made significant progress in closing the gap. The 50 percent lending goal for low and moderate income applicants alone is proof of the GSEs commitment to the importance of homeownership. Despite these activities, and despite rapid growth in homeownership for these very groups, research is still needed into how well targeted groups are being served by the GSEs. Previous research suggests that low income and minority borrowers are being underserved by the GSEs. The present analysis supports this conclusion. Both in percentage terms and in the odds of having a loan purchased by a GSE, low income and minority borrowers and borrowers from low income census tracts trail white and non-low income reference groups. Overall, however, the GSEs appear to be doing a better job than they were in 1997. In no instance, however, do the odds for any targeted group having a GSE purchase the loan rise above 1, meaning that whites, high income buyers, and buyers not in targeted areas always have a higher probability of having a loan purchased and will thus have continued access to mortgage capital. ^

Subject Area

Economics, Finance

Recommended Citation

McElroy, Mathew S, "Fannie Mae and Freddie Mac lending patterns along the Texas-Mexico border" (2008). ETD Collection for University of Texas, El Paso. AAI1455876.