Weekly update from the National Housing Conference
News from Washington | By Luke Villalobos
Over 500 Housers attend NHC's Solutions for Affordable Housing
On Tuesday, NHC hosted its annual Solutions for Affordable Housing in Washington, D.C. Over 500 housing professionals attended in person and virtually to discuss today's top issues in housing policy. The event featured a diverse set of panels exploring topics including housing opportunities in the Inflation Reduction Act, appraisal reform, supply chain disruptions, housing finance strategies, special purpose credit programs, multifamily regulations, what's on the policy docket for 2023, and fireside chat with the mayors of San Diego and Philadelphia. FHA Commissioner Julia Gordon opened the event with an overview of HUD's work to achieve its ambitious agenda.
"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.
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.
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."
Banks financially prepared for economic downturn, OCC report says
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.
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.
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.
Chart of the week
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.
What we're reading
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.
The week ahead
Monday, December 12
Tuesday, December 13
Wednesday, December 14
Thursday, December 15
Friday, December 16
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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