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Finance and Economics Discussion Series: GSE Activity and Mortgage Supply in Lower-Income and Minority Neighborhoods: The Effect of the Affordable Hou

Finance and Economics Discussion Series: GSE Activity and Mortgage Supply in Lower-Income and Minority Neighborhoods: The Effect of the Affordable Hou

Paperback

Investing & FinanceReal EstateGeneral Political Science

ISBN10: 1297050320
ISBN13: 9781297050329
Publisher: Scholar's Choice
Published: Feb 16 2015
Pages: 40
Weight: 0.16
Height: 0.08 Width: 6.14 Depth: 9.21
Language: English

I estimate the credit supply effect of the Underserved Areas Goal(UAG), which establishes GSE purchase goals for mortgages to lower-income and minority neighborhoods. Taking advantage of discontinuous census tract eligibility rules and abrupt changes in tract eligibility in 2005, I find evidence of a small UAG effect on GSE activity, and this increase does not appear to crowd-out FHA and subprime lending. The results also indicate that the GSEs exploit the law's lack of precision targeting, yielding effects that might diverge from the law's intent.

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General Political Science