NAMIC Welcomes Congressional Call for Action on FHFA Insurance Mandate

The National Association of Mutual Insurance Companies urged the Federal Housing Finance Agency to rescind a costly and unnecessary insurance coverage mandate following a letter from members of Congress on the issue.

“Insurers offer a wide range of coverage options to fit consumers’ insurance needs and budgets to help make the dream of homeownership attainable,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “Government mandates only serve to limit those choices and put buying a home out of reach.”

Federal government-sponsored entities Fannie Mae and Freddie Mac, which are supervised by the FHFA, unilaterally changed their selling and servicing guidance in February 2024 to require full-replacement-cost insurance, which is often the most expensive coverage. Following opposition from NAMIC, lawmakers, and other stakeholders, the agency agreed to pause enforcement of the requirement. However, mortgage lenders in marketplaces nationwide continue to reference the Biden-era guidance change while denying consumers and would-be homebuyers alternative options, such as actual cash value coverage. Rep. Addison McDowell, R-N.C., along with more than 45 of his fellow representatives, sent a letter to FHFA Director William Pulte Nov. 6 urging the agency to rescind the mandate.

Grande noted further that the FHFA has no regulatory authority over insurance but imposed this de facto mandate through its oversight of mortgage lenders and brokers.

“State regulators oversee insurance markets to preserve access to coverage for homeowners who might otherwise be left uninsured or unable to close on a home,” Grande said. “This federal coverage mandate, imposed by an agency with no regulatory authority over insurance and without any regulatory process or public comment, takes away those choices. We applaud Congressman McDowell and his colleagues for shining a light on this issue.”