Independent mortgage banks (IMBs) now originate 84% of all single-family mortgage loans, according to an annual report released this week by the Community Home Lenders of America (CHLA).

The report from the CHLA, a nonprofit association representing small and midsized IMBs, highlights a year of significant market consolidation and outlines a targeted policy agenda for 2026, focusing heavily on protecting small lenders during the potential exit of Fannie Mae and Freddie Mac from federal conservatorship.

The CHLA reports that nonbanks now account for 90% of Federal Housing Administration (FHA) loans and 95% of the Department of Veteran Affairs (VA) lending, critical sectors for first-time and underserved borrowers. Additionally, the IMB share of Ginnie Mae issuance has surged to 95% market share, according to the report.

This dominance comes amid a “worsening affordability crisis,” the report noted. The CHLA cited National Association of Realtors data that found the typical age of a first-time homebuyer has climbed to an all-time high of 40, while the first-time homebuyer market share dropped to a record low of 21% as of June 2025. With home prices up 60% since 2019, the association argues that IMBs are the primary engine keeping entry-level homeownership possible.

“Washington should prioritize entry level homeownership,” the report urges, calling for specific focus on FHA, VA, and Rural Housing Service programs. The CHLA is advocating for updated policies on condominiums and manufactured homes to address supply shortages, specifically calling for the FHA to insure loans in condo projects already approved by Fannie and Freddie.

The report lauds several legislative and regulatory victories from 2025. Notable wins include the enactment of the Homebuyers Privacy Protection Act to rein in abusive trigger leads and a tax bill that raised the IRS’s State and Local Tax (SALT) deduction cap to $40,000. The CHLA also pointed to the Trump administration’s efforts to streamline FHA regulations and reduce “regulation by enforcement” at the Consumer Financial Protection Bureau as positive developments for the industry.

Looking ahead, the CHLA’s primary focus for 2026 is ensuring that any exit from conservatorship for Fannie Mae and Freddie Mac includes protections for small lenders. The group is advocating for “G-fee parity,” which is the narrowing of preferential pricing based on lender size for Fannie and Freddie guarantee fees. The CHLA also seeks to preserve the competitive cash window, which is the period when loans can be sold to Fannie and Freddie for cash instead of mortgage-backed security swaps.

The report also pushes back against narratives that IMBs are risky, emphasizing that unlike big banks, IMBs have no taxpayer backstop. The CHLA maintains that IMB owners have “skin in the game,” often bearing personal liability for underwriting errors, and that smaller IMBs pose “little or no systemic risk.”