Weekly update from the National Housing Conference
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In this issue
December 11, 2022
Issue 91-44
· Over 500 Housers attend NHC Solutions for Affordable Housing
· Fannie Mae enhances underwriting for borrowers without credit scores
· HUD Sec. Marcia Fudge: institutional Singe Family Rental investors “impossible to compete with”
· HUD awards $30 million for 135 service coordinators
· House passes Community Disaster Resilience Zones Act of 2022
· Banks financially prepared for economic downturn, OCC report says
Chart of the week: Representation of women and minorities in financial services shows marginal progress
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Guest Member Note: Learning and sharing lessons truly matters
Remarks given by Senator Catherine Cortez Masto of Nevada at NHC's 2022 Solutions for Affordable Housing Convening on Tuesday December 6,2022.
Good afternoon everyone! I’m so glad to be here to speak with you about what we’re doing in my home state of Nevada and across the country to address affordable housing.
As all of you know, over the last several years, Congress has made a remarkable investment in housing. In the past two years alone, Nevada has received more federal funds to support affordable housing than it has ever had. And my state needed it. After the 2008 financial crisis, Nevada’s families lost jobs and homes. Lenders foreclosed on the homes of more than 219,000 families. We learned important lessons from that crisis. When COVID hit, I pushed for government action to help people pay their bills and stay in their homes. And you all were a key part of implementing this successful approach. I’m proud of our work to help stop foreclosures and evictions, to provide emergency rental assistance, and to make sure we expanded help for people at risk of homelessness.
When Congress passed the American Rescue Plan, we also included funds for rural housing, housing counseling, and fair housing. And we provided record levels of housing assistance, supportive services, and other investments for Tribal communities across the U.S. Many states, including Nevada, are using their state and local relief funds from the American Rescue Plan for affordable homes—at least 6,000 of them in my state alone.I was just at a ribbon cutting for an affordable housing complex that benefited from these funds, and I expect to be busy at a lot of future groundbreakings in the Silver State over the coming years.
Housing advocates, developers, and bankers like you are key in making these new homes a reality. There are communities that have some funding to build affordable housing now, and they need new partners. So those of you who look to finance affordable housing, look to help the Tribes, rural communities, and nonprofits that are taking on bigger projects now. We know that housing development is complex, with layers of financing.
Let’s leverage these funds Congress has delivered to build as many attractive and affordable homes as we can. And we also need to consider where we build them. I’m proud that the Bipartisan Infrastructure Law included my legislation to align new transportation investments with investments that increase the supply of housing. This will make it easier for families to get from home to work to retail and recreation. You also are in a unique position to help Congress understand the impact of these historic investments in housing. Members of Congress need you to let us know what the impact of these federal dollars has been. more...
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News from Washington | By Luke Villalobos
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Over 500 Housers attend NHC's Solutions for Affordable Housing
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"The collaboration and the level of enthusiasm and conversation at the Department now is amazing," Gordon said. "The fact is this Administration is very committed not just to fairness and equity generally speaking, but particularly in the housing sector."
The event also focused on inflation. During a panel titled Housing and High Interest Rates, economists discussed the current interest rate environment's impact and what it means for housing costs.
"The Great Reset is coming," said Jason Fichtner, Bipartisan Policy Center Vice President and Chief Economist. "We need to start figuring out: how do we prepare for what the new normal will be, and what it looks like. We're not going back to pre-pandemic times. And as we think about the cash balances and people getting their savings back in line and going back to work, what does that look like? We need to think about what the reset's going to be with interest rates, with inflation, with wage growth, and how that then helps with thinking about rental prices and housing prices."
U.S. Sen. Catherine Cortez Masto (D-Nev.) closed the event with remarks about moving housing legislation forward. In addition, Cortez Masto issued a call-to-action for housing professionals to help Congress understand the impact housing investments have on communities across the country.
NHC is grateful to JPMorgan Chase, PulteGroup, Rocket Mortgage, Wells Fargo, Bank of America, Habitat for Humanity, the National Association of REALTORS, Fannie Mae, Freddie Mac, the Federal Home Loan Bank of New York, and Zillow for their generous sponsorship of this event.
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Fannie Mae enhances underwriting for borrowers without credit scores
On Tuesday, Fannie Mae announced innovative enhancements to its automated underwriting system to expand eligibility for borrowers without credit scores. The update is part of ongoing efforts to reach historically underserved populations better and equitably serve renters and homeowners. The enhancements update the eligibility criteria for loans where a borrower doesn't have a credit score to align with Fannie Mae's standard Selling Guide requirements. This will enable an evaluation of a borrower's monthly cash flow over 12 months to potentially enhance their risk assessment and simplify the mortgage process by automating the current Selling Guide policy requirement to document nontraditional sources of credit.
"Fannie Mae's preliminary research has shown that assessing a borrower's cash flow activity through bank statement data can make more predictive risk assessments, especially for consumers with no or limited credit history," the announcement said.
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HUD Sec. Marcia Fudge: institutional Singe Family Rental investors "impossible to compete with"
Last week, during its quarterly update meeting, the HUD Office of Policy Development & Research (PD&R) discussed the impact of institutional investors on U.S. housing markets. During the event, PD&R shared research and data highlighting what communities have done to preserve affordable housing. Activity by institutional investors has increased since the start of the pandemic, and often these investors have portfolios of more than 1,000 properties. This increased activity presents an additional strain on the existing barriers for first-time homebuyers and racial-wealth gaps.
"Institutional investors have access to resources that make them impossible to compete with. This is especially true for minority first-time homebuyers, who already face institutional barriers," said HUD Secretary Marcia Fudge. "HUD has taken steps to ensure that our defaulted assets will land in the hands of nonprofits or individual owners, but this is a much bigger problem that will take everyone coming together to figure out how to sustain housing that people can afford."
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Banks financially prepared for economic downturn, OCC report says
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The Office of the Comptroller of the Currency (OCC) released its Semiannual Risk Perspective for Fall 2022 report on key issues facing the federal banking system. The report addresses these risks and focuses on threats to banks' safety and soundness and their compliance with current laws and regulations. It includes data in several areas, including the operating environment, bank performance, special topics in emerging risks, trends in key risks, and supervisory actions.
Among the key findings are that economic growth slowed sharply in 2022 while high unemployment supported consumer spending and overall bank performance. Also, banks are currently well capitalized with ample liquidity and sound credit quality, despite macroeconomic headwinds being a concern.
Other highlights include bank investment portfolios being adversely impacted by the rising rate environment, resulting in portfolio depreciation. Another finding is that operational and compliance risks are elevated. And there is a moderate quantity of credit risk in commercial and retail loan portfolios.
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House passes Community Disaster Resilience Zones Act of 2022
On Wednesday, the House of Representatives passed the Community Disaster Resilience Zones (CDRZ) Act of 2022, clearing the path for signature by President Biden. The Senate already passed the bill earlier this year. The bipartisan bill seeks to improve equity and resilience to natural disasters within vulnerable communities. The legislation establishes a CDRZ classification for communities at risk of natural disasters that are also considered to have limited community resources. It further authorizes FEMA to provide financial, technical, and other assistance to CDRZ-designated communities that plan to perform a resilience or mitigation project to reduce natural hazards. The act also reduces the cost share for CDRZ-designated communities from 25 percent to 10 percent under FEMA's pre-disaster mitigation program. The bill will help direct public and private sector resources to communities most in need of targeted assistance to improve resilience.
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HUD awards $30 million for 135 service coordinators
HUD awarded $30 million in funds to hire and maintain service coordinators for residents of Public and Indian housing. Service coordinators assess residents' needs and help coordinate resources for residents within the community. The coordinators also help residents make progress on their economic goals. HUD will distribute the awards among 111 public housing agencies, Tribally Designated Housing Entities, resident associations, and nonprofit organizations. The awards will fund 135 service coordinator positions. The program funding also raises the maximum salary for service coordinators to provide a more consistent service and address existing provider gaps.
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Representation of women and minorities in financial services shows marginal progress
The Government Accountability Office released a new report reviewing minority's and women's representation in financial services industry management positions. The report is part of testimony for a House Committee on Financial Services hearing. The report analyzed data from the Equal Employment Opportunity Commission and found only slight increases in the representation of minorities and women in these positions from 2007 to 2020. From 2018 to 2020, Black representation in senior-level management positions remained at three percent and Hispanic representation at four percent. Asian and female representation in these roles increased by one percent.
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Ginnie Mae published a new report on the liquidity of the Department of Veterans Affairs (VA) Housing Loan Program. This is Ginnie Mae's first comprehensive look at the secondary mortgage market liquidity of VA mortgages guaranteed and pooled into Ginnie Mae mortgage-backed securities. The report's main findings include that the VA program continues to grow and has been met by strong investor demand.
The Joint Center for Housing Studies of Harvard University published a blog post on the homes and neighborhoods of older adults shaping their vulnerability to climate change. The authors try to fill gaps in research on how residential settings shape climate stressors, such as heat and smoke, for older residents. The blog post notes nuances like lower-income renters having little control over the temperature in their building, resulting in greater exposure to heat risk and serious consequences for those with chronic diseases. Ultimately, the piece calls for more research on the intersection of climate, aging, and residential settings.
Secretary of the Treasury Janet Yellen delivered opening remarks at the first meeting of the Treasury's Advisory Committee on Racial Equity (TACRE). Treasury created TACRE to provide advice and recommendations to the department on advancing racial equity and addressing economic disparities for communities of color. Yellen reflected on efforts to focus on equity during the implementation of the American Rescue Plan and called for TACRE to keep holding Treasury accountable for advancing economic fairness for all Americans.
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Monday, December 12
Tuesday, December 13
Wednesday, December 14
Thursday, December 15
Friday, December 16
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The National Housing Conference is a diverse continuum of affordable housing stakeholders that convene and collaborate through dialogue, advocacy, research, and education, to develop equitable solutions that serve our common interest.
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