State Financial Officers Slam Biden’s ‘Unconscionable’ Mortgage Redistribution Rule

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Thirty-seven state financial officers sent President Joe Biden and his Federal Housing Finance Agency director a letter on Monday, slamming the administration’s new policy to force homebuyers with good credit to pay higher mortgages to subsidize risky loans.

“The policy will take money away from the people who played by the rules and did things right – including millions of hardworking, middle-class Americans who built a good credit score and saved enough to make a strong down payment,” state treasurers and other top finance officials from 27 states wrote.

The letter was referring to a Biden administration rule that begins on Monday that effectively forces homebuyers with good credit to pay more for their mortgages to subsidize loans to higher-risk borrowers. The Washington Times explained:

Experts believe that borrowers with a credit score of about 680 would pay around $40 more per month on a $400,000 mortgage under rules from the Federal Housing Finance Agency that go into effect May 1, costs that will help subsidize people with lower credit ratings also looking for a mortgage.

The state financial officers explained that the “federal programs exist to address affordable housing assistance, and the new policy does nothing to address the shortage of housing inventory” because it ultimately uses the higher mortgage rates to “subsidize” higher-risk borrowers.

“The right way to solve that problem is not to use the power of the federal government to penalize hardworking, middle-class American families by confiscating their money and using it as a handout,” the group added. “The right way is to implement policies which will reduce inflation, cut energy costs and bring lower interest rates.”

The Associated Press

President Joe Biden speaks during a reception in the East Room of the White House in Washington, Monday, May 1, 2023, to celebrate Eid al-Fitr. (AP Photo/Susan Walsh)

The group’s letter explained:

It is already clear that this new policy will be a disaster. It amounts to a middle-class tax hike that will unfairly cost American families millions upon millions of dollars. And – at a time when the real estate market has already slowed considerably due to high interest rates – it will further depress home sales. The practice by FHFA of making substantive policy changes without utilizing the federal rulemaking process is inappropriate.

The 37 state financial officers include treasurers, auditors, commissioners of revenue, and other top officials from 27 states: Alabama, Alaska, Arizona, Arkansas, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, West Virginia, Wisconsin, and Wyoming.

Derek Kreifels, the CEO of the State Financial Officers Foundation, in a separate statement, said the new rule from the Federal Housing Finance Agency “punishes hard-working Americans who saved and sacrificed to build strong credit.”

Higher-risk borrowers will be subsidized by these fees imposed on the middle class, turning sound financial principles on their heads,” Kreifels added. We will do everything in our power to support states as they protect the middle class from this sort of misguided big government interference.”

Jacob Bliss is a reporter for Breitbart News. Write to him at or follow him on Twitter @JacobMBliss.


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