A new blog and paper by Don Layton with the Joint Center for Housing Studies of Harvard University explore whether the Federal Housing Finance Agency’s (FHFA) plans and actions are consistent with making the Fannie Mae and Freddie Mac (collectively, the Government Sponsored Enterprises or GSEs) attractive enough to equity investors, and – given the need to raise such unprecedentedly large amounts of equity – to do so globally and broadly.

The paper begins by explaining what the companies today represent as an investment opportunity, which is fundamentally different from what existed prior to conservatorship. Then the paper examines four issues where the government – in the form of FHFA, Treasury, or Congress – is already acting or has a real risk of acting contrary to this need for the GSEs to be strongly attractive to equity investors.