Housing and Economic Recovery Act of 2008

The United States Housing and Economic Recovery Act of 2008 (commonly referred to as HERA) was designed primarily to address the subprime mortgage crisis by stabilizing the housing market and reforming predatory lending practices. It emerged as a bipartisan compromise in Congress during increasing pressure to respond to the rapidly evolving crisis. It was intended to restore confidence in Fannie Mae and Freddie Mac by strengthening regulations and injecting capital into the two large U.S. suppliers of mortgage funding. States were authorized to refinance subprime loans using mortgage revenue bonds. Enactment of the Act led to the government conservatorship of Fannie Mae and Freddie Mac.