The White House recently released Delivering Government Solutions in the 21st Century: Reform Plan and Reorganization Recommendation. The proposal would reorganize several aspects of the Federal Government, with affordable housing in the mix.

The U.S. Department of Agriculture’s rural housing loan guarantee program as well as its rural rental assistance program would be moved into the Department of Housing and Urban Development.

HUD’s Community Development Block Grant program would be consolidated with Economic Development Assistance Programs from the Economic Development Administration and would be reorganized under a newly created Bureau of Economic Growth within the Department of Commerce.

A permanent council on public assistance would be created, composed of Health and Human Services (which would also be renamed the Department of Health and Public Welfare after taking over USDA’s nutrition assistance programs), HUD, USDA, the Department of Education and the Workforce (another new proposition to combine labor and education), and others. The purpose of the council would be a coordinated effort for all public assistance programs, including the goal of implementing federal-wide work requirements for these programs.

The proposal would also end conservatorship for Fannie Mae and Freddie Mac (GSEs) and reduce their roles in the housing market as well as provide an explicit and limited federal backstop apart from support for low- and moderate-income homebuyers. The plan predicts other private companies competing in the space once the GSEs are taken out of conservatorship and made fully private, with a federal regulator ensuring fair access to the secondary market.  The proposal is entirely silent on the future of rental housing finance and the GSEs’ multifamily business lines, and makes a critical mistake in assuming that affordable housing objectives and traditional underwriting are mutually exclusive and therefore would shift primary responsibility for serving low- and moderate-income borrowers to HUD and FHA.

The proposal remains just that for the moment, a proposal. Congress would have to act to implement such changes.