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Weekly update from the National Housing Conference
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In this issue
November 22, 2020
Issue 89-42
- FHFA issues final capital rule
- FHA's Annual Report to Congress reveals record high share of first-time homebuyers
- HUD to provide $86 million in COVID-19 funding through Mainstream Vouchers
- State HFAs share COVID-19 lessons learned and priorities for the first 100 days
- FDIC preparing to launch Mission-Driven Bank Fund
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Chart of the week: Businesses and households becoming more adaptable in the face of COVID-19 resurgence
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Find the information you need at NHC's COVID-19 Housing Resource Center
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Solutions for 2021’s impactful year in housing
by David M. Dworkin, NHC President & CEO
Dear Friend,
As we head into the holidays, many of us are ready to put this year behind us. 2020 was marked by challenges we could have never anticipated going into the year. The National Housing Conference hopes to provide the antidote to this chaotic landscape with our Solutions for Affordable Housing online convening on Tuesday, December 1.
We are delighted to bring together an incredible group of leaders from across the housing space to discuss strategies that are going to allow us to make 2021 a great year for affordable housing. #Solutions2020 will take place just in time to reenergize you after the Thanksgiving break for a busy December as housers make their last push of the year to try to get Congress to pass another stimulus package and finally get federal rental assistance over the line.
We’ve assembled a diverse lineup of speakers who will discuss bipartisan policy and legislative solutions that lie ahead as we plan to tackle big issues in 2021. From veteran policy leaders like Maurice Jones, president and CEO of Local Initiatives Support Corporation, Lisa Rice, president and CEO of the National Fair Housing Alliance, and Buzz Roberts, president and CEO of the National Association of Affordable Housing Lenders, to state practitioners representing the Colorado Coalition for the Homeless and the Tennessee Housing Development Agency, and leaders in the lender community from Bank of America, JPMorgan Chase, and Wells Fargo, we’re excited to showcase the full spectrum of views and stakeholders that advocate for, fund and deliver housing solutions to 330 million Americans day-in and day-out.
I invite you to take a look at the agenda NHC has prepared to focus on solutions to the Black homeownership gap, affordable rental and housing supply crises, and a fresh agenda to make a real impact in reducing homelessness in America. We’re also addressing the policy and legislative issues that will be top-of-mind in January 2021, like what’s on the legislative agenda for the 117th Congress and the prospects for a unified Community Reinvestment Act rulemaking. #Solutions2020 will also include a discussion of housing policy priorities under the incoming Biden administration, and we are excited to be joined by veteran housing leader, NHC Board of Governors Chair and Housing Partnership Equity Trust President and CEO Anne McCulloch.
During every panel, attendees will have an opportunity to not only take down the insights of our speakers but also ask their own questions. And while I share in the 2020 collective Zoom fatigue, our team at NHC and our incredible speakers have worked very hard this year to organize lively and engaging discussions you won’t hear anywhere else.
If you haven’t already, I encourage you to register today. Whether you’re a lender, an advocate, a nonprofit, a government official, a researcher or a student, you’ll finish the day with actionable tools and ideas for a much better year ahead.
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FHFA issues final capital rule
After publishing the proposed rule in June, the Federal Housing Finance Agency (FHFA) published its final rule establishing a new regulatory capital framework for the GSEs going forward. The final rule is largely similar to the proposed rule, with the exception of the following changes: an increased amount of capital relief for credit risk transfers; reduced credit risk capital requirements for single-family mortgage exposures for borrowers financially impacted by COVID-19; and an increased exposure level risk-weight floor for single-family and multifamily mortgages.
NHC joined 14 housing and civil rights groups urging FHFA to revise its approach in the proposed rule. The group recommended several changes, including refraining from adopting bank capital rules, counting a portion of guarantee fee revenue as capital for risk-based capital requirements, eliminating the punitive stability capital buffer and the countercyclical capital buffer, and lowering the leverage ratio to the alternative proposal from the 2018 proposed rule of 1.5% for trust assets and 4% for retained portfolio.
“The levels of capital and the leverage ratio recommended by FHFA would disrupt housing markets and significantly raise the cost of homeownership. In the middle of an unprecedented pandemic and the worst recession since the Great Depression, now is not the time to restrict credit or alter the fundamental infrastructure of the housing economy,” said NHC’s David Dworkin.
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NHC welcomes new members!
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New American Funding is a family-owned business, dedicated to helping other families and individuals improve their quality of living, and is a Fannie Mae, Freddie Mac, and Ginnie Mae direct lender, seller and servicer.
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FHA's Annual Report to Congress reveals record high share of first-time homebuyers
The Federal Housing Administration (FHA) released its Fiscal Year 2020 Annual Report to Congress, which details the status of FHA’s Mutual Mortgage Insurance Fund (MMIF), as well as the breakdown of the borrowers served by FHA programs throughout the year. “In addition to assisting homeowners struggling financially, during this past fiscal year FHA continued to play a leading role in supporting homeownership for first-time, minority, and low- and moderate-income homebuyers,” said HUD Secretary Carson.
The report illustrates FHA’s impact on first-time and minority homeownership, the National Council of State Housing Agencies said: “FHA endorsed more than 1.3 million home mortgage loans through its forward mortgage program, including 817,847 mortgage loans to homebuyers, 83.1 percent of whom were first-time buyers.” Minority households accounted for roughly 32% of forward mortgage purchases in FY 2020 – 17.3% of which were Hispanic, 12.7% were Black, 2.2% were Asian and 0.4% were American Indian.
Despite strong purchase volume, FHA’s market share decreased from 11.6% in the prior year to 9.6% in 2020. FHA also highlighted a 1.26% gain in the overall capital ratio, putting the agency “well above” its congressionally mandated 2% capital ratio. “I think if you take all the actions that we’ve put in place, and put them all together, it’s really had a positive impact on the capitalization of the fund, which is a great thing for taxpayers that stand behind the FHA,” FHA Commissioner and Assistant Secretary Dana Wade told HousingWire in an interview this week.
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HUD to provide $86 million in COVID-19 funding through Mainstream Vouchers
“Recently, we have learned a great deal about coronavirus and the impact it has on all of our nation’s people,” said HUD Secretary Ben Carson. “Now, we must apply this knowledge to protect and save lives, especially when it comes to populations that face adversity in the form of mental, physical, and emotional challenges. Understanding the needs of these populations, Mainstream Vouchers provide targeted assistance to non-elderly populations with disabilities in the department’s ongoing effort to provide resources to combat COVID-19.”
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State HFAs share COVID-19 lessons learned and priorities for the first 100 days
Patterson discussed the programs CalHFA has deployed during the pandemic, including housing counseling, made possible by the National Mortgage Settlement Fund, as well as a mortgage assistance program, currently under development, for small landlords with one to four rental properties. She also highlighted the organization’s Mixed-Income Housing and Bond Recycling programs. Sykes discussed how MSHDA has deployed relief funds, short-term payment deferrals and flexible gap financing to support multifamily housing providers in Michigan. He also explained the evolution of the organization’s Below Market Rate Bond Program.
Both panelists expressed concern with the impact of the impending expiration of unemployment benefits and other COVID-19 relief at the end of the year on renters and property owners. As the Biden transition team prepares its agenda for the first 100 days, Sykes encouraged the administration and the new Congress to focus on additional resources for struggling renters and homeowners. Patterson said that making sure HUD was fully staffed should be a top priority.
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FDIC preparing to launch Mission-Driven Bank Fund
On Wednesday, the Federal Deposit Insurance Corporation (FDIC) published a Request for Proposal for a financial advisor to guide the development of its newly announced Mission-Driven Bank Fund. The new fund will drive private capital to FDIC-insured Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs).
The more than 250 FDIC-insured MDIs and CDFIs play a central role in serving minority, low-income, and rural communities. According to FDIC, MDIs’ mortgage and small business loan portfolios include a larger share of low- to moderate-income borrowers, while more than half of the lending and services CDFIs extend are provided to low-income communities. Once established, the Mission-Driven Bank Fund will help MDIs and CDFIs raise capital, expand their services, attract new talent, acquire new technology and build out capacity.
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Chart of the week: Businesses and households becoming more adaptable in the face of COVID-19 resurgence
Fannie Mae’s November Economic and Housing Outlook examines the impact of the latest wave of COVID-19 outbreaks on the economy, including the effects in hard-hit states like Arizona. “Regional measures of economic activity do not appear to be responding as negatively to the resurgence,” relative to the dramatic initial spikes in unemployment experienced in May. Fannie Mae attributed this increased resiliency to stronger “adaptability” amongst businesses and households as well as “distancing fatigue.”
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The Local Initiatives Support Corporation (LISC) recently announced a new partnership with Dick’s Sporting Goods. The sporting goods retailer will invest $12.5 million into LISC’s Black Economic Development Fund. LISC said it hopes to raise over $100 million by the end of the year to contribute to the fund, which is designed to support minority-owned businesses and close the racial wealth gap.
A new report from Brookings examines the effects of COVID-19 on the country’s already divided workforce. “The shock has exposed and widened rifts in our two-tiered labor market – between workers with stable jobs and the newly unemployed, between those who can work from home and those who can’t, and between high-income workers and those struggling to make ends meet.” Brookings urged policymakers to “facilitate safe reemployment as soon as possible,” while simultaneously providing more targeted support to low-wage workers.
Zest AI announced a new partnership with Freddie Mac this week. The GSE will deploy Zest’s machine learning tools to support its credit risk modeling. “Freddie Mac is always evaluating technology solutions that meet our high standards and support our continued commitment to expanding homeownership opportunities responsibly, especially among first-time homebuyers, communities of color, and those living in underserved markets,” said Michael Bradley, senior vice president of modeling, econometrics, data science and analytics, Freddie Mac.
This week, Harvard’s Joint Center for Housing Studies published its annual State of the Nation’s Housing report. The report finds that the global pandemic has exacerbated housing challenges, “particularly the lack of affordable rental housing, unequal access to good-quality homes, and the vulnerability of much of the housing stock to natural disasters.” In spite of all the turmoil and disruption to renters and homeowners alike, the report suggests that housing could play a key role in driving the country’s post-COVID economic recovery.
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Monday, November 23
Tuesday, November 24
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The National Housing Conference has been defending the American Home since 1931. We believe everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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Defending our American Home since 1931
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