Sustainable Homeownership Act

The Sustainable Homeownership Act modifies the rules for Freddie Mac and Fannie Mae to limit their purchase of high-risk mortgages while introducing stricter insurance requirements for loans with high loan-to-value ratios. It mandates that private insurers guarantee specific portions of unpaid mortgage balances, with higher coverage percentages required for riskier loans, though it includes exceptions for refinancing, state programs, and low-income borrowers. The bill also establishes new financial oversight measures, such as setting a return on equity range between 9 and 13 percent and requiring enterprises to remit excess earnings to the Treasury if they exceed that range. Additionally, the legislation outlines a plan to eventually convert the government-sponsored enterprises' preferred stock into common equity and prepare for their exit from federal conservatorship.