In 1977, Congress passed the Community Reinvestment Act (CRA) that requires banks and thrifts to offer credit throughout their entire market area. The purpose of the CRA is to provide credit, including home ownership opportunities to underserved populations and commercial loans to small businesses. The implementing regulations of the CRA has been revised several times by the Federal Deposit Insurance Corporation (FDIC) at the behest of Democrat and Republican administrations. Some people have blamed the CRA for the subprime debacle although I think the blame can be spread to many parties.
The Federal Reserve does not directly set mortgage interest rates although Fed policies can influence the rates. In the short run, mortgage interest rates do not seem related to Fed policies.