Freddie Mac will launch targeted lending programs this year, following guidelines from regulators giving lenders the go-ahead.

The special purpose credit programs will appeal to black, Latino and Native American borrowers, according to Pamela Perry, manager of Freddie Mac’s single-family fair housing team. The programs will be announced in the third quarter of this year, Perry said during a fair housing webinar hosted by the National Housing Conferencea mortgage trade association.

Perry said that despite statements from banking regulators, the Federal Housing Finance Agencythe Department of Housing and Urban Development and the Consumer Financial Protection Bureau To reassure lenders that targeted lending programs do not violate fair lending laws, mortgage lenders remain hesitant.

“Notwithstanding all the guidelines, we still hear concerns about legality from lenders,” Perry said. “So I’m saying keep the advice coming, because we’re building it and we’re hoping the lending community will come.”

Freddie Mac did not respond to a request for comment asking for more details on upcoming programs.

It is also not clear when Fannie Mae, Freddie Mac’s largest GSE counterpart, plans to roll out special-purpose credit programs. In Fannie Mae’s latest annual financial report, the GSE said it plans to “establish and support special purpose credit programs,” as part of its Fair Housing Finance plan.

Fannie Mae did not respond to a request for comment.

Both GSEs submitted their fair housing finance plans to the FHFA before the end of the year, but they have yet to be approved and implemented. An FHFA spokesperson said this week that the agency could not provide an update on when the plans would be in place.

In December 2021, HUD Sec. Marcia Fudge wrote that Custom Loan programs “are legal under the ECOA and generally not prohibited by the Fair Housing Act.”

Demetria McCain, Principal Assistant Undersecretary for Fair Housing and Equal Opportunity, also wrote a legal memorandum to encourage lenders to develop tailored loan programs “to help…economically disadvantaged classes and home buyers”.

In February, all the banking regulatory agencies, the CFPB, the justice departmentHUD and the FHFA released a rare interagency statement encouraging lenders to “explore opportunities to develop” special purpose credit programs.

McCain, during the roundtable, said lenders “just need to do it” and the barriers to creating bespoke lending programs are more “perceived than real.”

Lenders have raised concerns about the legality of special-purpose credit programs and expressed reluctance to provide the documentation needed to develop the programs, which some consider an admission of wrongdoing. Lenders have pointed out that special purpose credit programs have been used to punish wrongdoing.

In 2018, to settle the redlining charges, the DOJ ordered Minnesota KleinBank to invest at least $300,000 in a three-year special purpose credit program to provide residents of majority minority census tracts with mortgage and home improvement loans on a “more affordable basis than otherwise available from KleinBank “.