May 13, 2015 / 5:21 PM / 3 years ago

U.S. regulator looks to encourage more loans for low-cost housing

WASHINGTON, May 13 (Reuters) - The U.S. housing finance regulator is looking into ways to encourage regional government-sponsored mortgage lenders to provide more funding for low-cost housing, the regulator’s director said on Wednesday.

Mel Watt, who heads the Federal Housing Finance Agency, said “a number” of Federal Home Loan Banks were holding back on mortgage purchase activity because they were unsure how they would have to meet affordable housing goals set by the regulator.

“That is not a desirable outcome,” Watt said in prepared remarks. “Therefore, FHFA plans to consider alternatives.”

He said the measures would be aimed as “assuring that very-low, low- and moderate-income households and communities have access to credit and affordable housing.”

The Federal Home Loan Bank System is a system of 12 regional banks that help finance mortgages made to consumers by their members that include banks, credit unions and insurance companies. (Reporting by Jason Lange; Editing by David Gregorio)

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