https://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html
Read it.
Part of the problem, for sure. But there weren't enough low income and minority home buyers to cause the problem we had. The banks also dramatically eased the rules for everyone on mortgage credit, so when we went to buy our first house (2004), the banks were willing to lend us about 33% more than we thought we could pay back (we said no thanks). That's not the way it's supposed to work; the banks (who have all the actuarial tables and know the likelihood of default) should be telling us no, not the other way around. But there was a quick buck to be made to help the quarterly profits. And then they figured out they could slice and repackage these mortgages and sell them as securities, making another quick buck, but also risking huge amounts of credit in the event of a downturn in the real estate market.
So yes, the changes at Fannie were part of the problem, but a much bigger part of the problem was the conduct of the bankers/investors (PS, they became the same in the name of "deregulation" -- both parties get the blame) who focused on the quarterlies rather than the long-term prospects of these lending and investment practices.
And then, imagine that, the housing market turned, and when it did, the whole thing imploded. And people say, but "those people" shouldn't have borrowed that much! And they are right, they shouldn't have. Nor should the banks have loaned it. But when houses all around you go into foreclosure, driving down the value of your house--that you COULD afford under the traditional guidelines--and that puts you underwater, despite traditional, conservative decision making, and you are put in a massive whole.
And when investment cash dries up because of the massive market downturn, businesses start pulling way back and downsizing, leaving people with smaller salaries or just out of work--at the same time that their primary financial asset has lost its value.
LOTS of perfectly well meaning and conservative living people were hurt by this, and it wasn't just the result of Fannie's changes. Those changes contributed, yes, but they were far from the only, or even the most significant cause.
To be clear, I was largely insulated from this. My employer froze salaries for a while, but I live and work in a relatively strong economic area. My house lost value, but I sold it before it lost much, and bought another that was not in distress, but had lost significant value, allowing me to get in a place I probably otherwise wouldn't have been able to afford. My investments lost a lot of value, but I'm in the prime of my earning years and knew not to sell because I didn't have to.
People who needed that investment then, though were at much greater risk, and thus were much more likely to do desperate things.
Again, not just a case of people not planning well enough.
