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Weekly update from the National Housing Conference |
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In this issue
September 12, 2021
Issue 90-34
• House committees propose housing investments and LIHTC expansion
• HUD announces new disaster assistance and additional measures for Louisiana
• OCC announces NPR rescinding 2020 CRA rule
• HUD publishes 2022 DDA and QCT lists
• Chart of the week: Building permitting has not recovered since the Great Recession
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Find the information you need at NHC's COVID-19 Housing Resource Center |
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Expanding the role of Fannie and Freddie in affordable housing
By David M. Dworkin, NHC president and CEO
This week, FHFA released a Request for Information Enterprise Equitable Housing Finance Plan. This ten-page document represents a 180-degree change in FHFA’s attitude regarding the affordable housing mission of Fannie Mae and Freddie Mac (the Enterprises). Ultimately, the final product will determine its real significance. But the RFI itself is much more than a rhetorical exercise – it offers an opportunity to expand the role of the Enterprises in affordable housing leadership while learning the lessons of past mistakes.
The RFI goes well beyond the scope of the Duty to Serve regulation and the Affordable Housing Goals, and it responds directly to President Biden’s January 21, 2021 Executive Order on “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.” Finally, the RFI requests detailed feedback on “objectives, measurable goals, and planned meaningful actions,” including “reducing the racial or ethnic homeownership gap” and “reducing underinvestment or undervaluation in formerly redlined areas that remain racially or ethnically concentrated areas of poverty or otherwise underserved or undervalued.” It includes a list of 15 objectives and goals that it makes clear are “nonexclusive” to others, opening the door for additional concepts not covered by the RFI itself. It does include:
- Reducing racial or ethnic disparities in:
- acceptance rates for the Enterprise’s automated underwriting system (AUS);
- the share of loans acquired by the Enterprise compared to the overall mortgage market;
- servicing, loan modifications, and loss mitigation; and
- tenant screening, repayment options, and evictions;
- Increasing sustainable housing opportunities for:
- individuals in the mortgage market, such as by expanding the number of qualified borrowers of a particular racial or ethnic group, or making policy changes to promote fair lending; and
- renters living in multifamily properties financed by the Enterprise’s loan purchases, such as by prohibiting source of income discrimination, providing other tenant protections, requiring reporting of on-time payments to credit bureaus, and facilitating accessibility for persons with disabilities; and
- Conducting, and making available publicly, research and data on advancing equity and sustainable housing opportunities.
Our response to this RFI is an opportunity to shape the more...
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News from Washington | By Luke Villalobos
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House committees propose housing investments and LIHTC expansion
On Thursday, the House Financial Services Committee released proposed legislation to make various housing investments as part of the larger $3.5 trillion budget reconciliation package. Federal housing programs are allotted $330 billion in the proposal, with $80 billion for public housing preservation, $75 billion for Housing Choice Vouchers, $15 billion for Project-Based Rental Assistance, $37 billion for the Housing Trust Fund, $35 billion for the HOME Investment Partnership Program, $5 billion for Rural Housing, and $8.5 billion for the Community Development Block Grant Program, among others. The bill also includes a $10 billion proposal for down payment assistance for first-generation homebuyers, a major investment NHC has been advocating for in order to help close the racial homeownership gap.
On Friday, the House Ways and Means Committee released proposed legislation to significantly expand the Low Income Housing Tax Credit (LIHTC), also for inclusion in the proposed reconciliation package. The proposal would increase state LIHTC allocations by 60%, lower the 50% bond financing threshold test to 25% and create new incentives for LIHTC projects serving extremely low-income, rural and Native communities. The proposal also repeals the Qualified Contracts option that allows LIHTC owners to sell their properties after 15 years of ownership and modifies the right of first refusal to be more favorable to non-profits attempting to preserve affordable properties.
The Financial Services Committee has scheduled a markup for their proposal for Monday, and the Ways and Means Committee will markup their proposal on Tuesday.
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HUD announces new disaster assistance and additional measures for Louisiana
Last week, HUD announced the implementation of federal disaster assistance for several states due to severe weather events across the country, impacting New Jersey, New York, Nebraska and North Carolina. The relief measures for each state included immediate foreclosure relief, offering mortgage insurance, and extending insurance coverage to home rehabilitation. HUD offered flexibility to local governments whose administrative capacity has been impacted by the disasters.
HUD also announced an additional 27 administrative and regulatory waivers in response to Hurricane Ida’s effects on Louisiana and nearby states, one of the largest sets of waivers ever issued at one time. The waivers build on administrative relief HUD granted to Louisiana jurisdictions immediately following the storm by easing requirements for communication by local governments and speeding construction of new housing to replace that which was damaged by the storm. The waivers cover the following programs: the Community Development Block Grant, HOME Investment Partnerships, Housing Opportunities for Persons with AIDS, and Emergency Solutions Grant.
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OCC announces NPR rescinding 2020 CRA rule
On Thursday, the Office of the Comptroller of Currency (OCC) announced a notice of proposed rulemaking to rescind its 2020 Community Reinvestment Act (CRA) rule. The rulemaking has been hotly anticipated since OCC announced that it would do away with the controversial 2020 rule in July of this year.
The move drew praise from industry members who had opposed the 2020 rule, which departed from decades of precedent to create separate CRA rules for banks regulated by OCC that did not apply to banks regulated by the Federal Reserve or Federal Deposit Insurance Corporation. At the time of the announcement, NHC President and CEO David Dworkin commended the decision, noting the importance of maintaining a united regulatory front to ensure that CRA remains an effective tool to combat disinvestment.
Comments on OCC’s rulemaking are due October 29.
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HUD publishes 2022 DDA and QCT lists
HUD published its updated list of Difficult Development Areas (DDAs) and Qualified Census Tracts (QCTs) for 2022 on Thursday in the Federal Register. HUD designates DDAs and QCTs in areas where there are significant obstacles to housing development and affordability. DDAs are areas with high rents relative to incomes. QCTs are areas where more than half of residents have incomes below 60% of the median income of their metropolitan area or have a poverty rate of at least 25%.
Developers are eligible for additional LIHTC allocations when they build new housing in either set of areas. HUD has published a map displaying the 2022 DDAs and QCTs and comparing them to the 2021 set.
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Chart of the week: Building permitting has not recovered since the Great Recession
On Wednesday, HUD issued a press release announcing new research on increasing affordable housing supply. The research, published through HUD’s Office of Policy Development & Research, highlights the affordable housing crisis and potential consequences of failing to address supply demands. One indication of the issue is building permit applications, which have remained historically low despite recent increased rates of home production and show the serious need for increased development and overall reduction of development barriers.
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Urban Institute published a brief, The Race to Save Millions from Eviction, that examines the impacts of the federal eviction moratorium and the consequences of its being struck down by the Supreme Court, as well the race to distribute billions in federal assistance. The research breaks down the eviction crisis by state, and ultimately expresses optimism for streamlined distribution efforts preventing evictions.
Vox’s Jerusalem Demsas asks why gentrification has received so much press in recent years, noting that the “core rot” in American cities has more to do with segregation than racial or class mixing. “White, wealthy neighborhoods that have refused class and racial integration have successfully avoided much scrutiny as gentrification has taken center stage in urban political fights,” she writes. “On the other hand, predominantly Black and brown neighborhoods often don’t gentrify due to disinvestment and centuries of racist and classist policies.”
HousingWire reports on Maryland’s move to require mortgage lenders to consider rental and utility payment history when assessing potential homebuyers. Under the rule, which will go into effect Oct. 1, lenders are obligated to account for past housing payment data if borrowers request that they do so, a practice NHC’s David M. Dworkin explains will expand the pool of eligible homebuyers.
The Low Income Investment Fund published a blog post discussing community revitalization and equitable development, citing the Community Builders’ work to redevelop the Avondale Town Center in Cincinnati, OH. The Community Builders utilized several financing methods, including LIIF’s “Equity with a Twist” loan product, in order to bring affordable housing and other essential services and amenities to the neighborhood. LIIF writes that this successful redevelopment initiative exemplifies the potential benefits of the proposed Community Revitalization Fund currently being considered in Congress.
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Monday, September 13
Tuesday, September 14
Wednesday, September 15
Thursday, September 16
Friday, September 17
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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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