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Weekly update from the National Housing Conference |
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In this issue
July 11, 2021
Issue 90-27
• Biden commits to including housing measures in reconciliation
• Ginnie Mae MBS volume above $70 billion for 12th month in a row
• FEMA announces grant sub-application selections
• FHFA issues Policy Statement on Fair Lending
• Lumber costs impacting affordable homebuilding
• Chart of the week: Long wait times and high appraisal costs pushing FHA borrowers out of the market
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Find the information you need at NHC's COVID-19 Housing Resource Center |
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How advisory firms can assist with COVID-19 emergency rental assistance
By Frank Banda, Managing Partner Public Sector, CohnReznick LLP
The U.S. Treasury’s Emergency Rental Assistance (ERA) program provides $25 billion to state and local governments to assist households unable to pay rent and/or utilities due to the ongoing COVID-19 pandemic. With various funding sources, eligibility criteria, and changing federal guidance, states and local governments are overwhelmed with quickly administering this program while remaining compliant with regulations. As a result, many jurisdictions are turning to advisory firms such as CohnReznick LLP to administer and monitor their ERA program.
Technology and compliance are key to administering ERA funds
In order to expedite rent relief to individuals and families in need, state and local agencies are using technology solutions to accept and process applications and pay claims. However, speed and technology are not all that is needed to facilitate a successful ERA program. Protecting stakeholder interests and ensuring compliance with changing regulations are also crucial to success.
According to Amanda Campen, sr. manager of CohnReznick Government Advisory, “Government entities that are distributing ERA funds have very unique needs and require an end-to-end program management solution that addresses all aspects of a citizen-centric program from verifying applicant eligibility to maintaining compliance with changing regulations. At CohnReznick, we’re utilizing technology solutions to optimize ERA performance while protecting the public trust through our compliance, monitoring and oversight capabilities. Additionally, CohnReznick has both world-class affordable housing insight and an extensive track record of providing large-scale program management and emergency management services for federal, state, and local governments to ensure successful deployment of ERA funding.”
ERA grantees must avoid pitfalls
Even the best-constructed ERA programs can run into obstacles more...
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News from Washington | By Luke Villalobos
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Biden commits to including housing measures in reconciliation
In a statement released Wednesday, Chairwoman Maxine Waters (D-Calif.) said that she had secured President Biden’s commitment to include housing provisions in a reconciliation package. “As I have followed all of the discussions on the bipartisan infrastructure deal, housing has not been part of the discussions. So, I spoke directly with President Biden on the need to include housing in reconciliation,” Waters said. In that conversation, “the President assured me that housing would be included in reconciliation.”
Waters said that Biden’s reference to housing in a speech on infrastructure he gave in Illinois on Wednesday was a reference to his promise to her. “We need to deal with the shortage of affordable housing in America,” Biden said. “So, we’re going to make a historic investment in affordable housing, increasing and improving the housing supply by building and rehabilitating more than 2 million homes, especially in places that need more housing.”
It was not immediately clear what Biden’s apparent commitment means for the bipartisan infrastructure bill that is currently working its way through Congress. Republicans succeeded in striking housing provisions from the package after digging in their heels on the position that housing is not infrastructure. Waters’ reference to reconciliation could indicate that Democrats may attempt to push through the housing provisions that were excluded from the bipartisan package on a party-line basis after its passage.
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FEMA announces grant sub-application selections
Last Friday, the Federal Emergency Management Agency (FEMA) updated the application status for its Hazard Mitigation Assistance grant programs, including the Flood Mitigation Assistance (FMA) program and the Building Resilient Infrastructure and Communities (BRIC) program. The FMA grant program is designed to assist state, tribal, and local governments to reduce their claims for the National Flood Insurance Program by addressing repetitive loss properties and other high-risk areas. The BRIC program supports state, tribal, and local projects for hazard mitigation of natural disasters and hazards.
The selected set of sub-applications are competing for $700 million available in FY 2020 funds. In total, FEMA received 1,227 sub-applications and 91 applications were selected for further review. Final awards are expected to be selected in September 2021 in the FEMA Grants Outcomes system.
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Ginnie Mae MBS volume above $70 billion for 12th month in a row
Ginnie Mae reported that its mortgage-backed security (MBS) issuance volume for June was $72.45 billion, marking the 12th consecutive month the corporation’s volume has exceeded $70 billion. Ginnie Mae reported that its June MBS issuance secured more than 272,000 homes and apartment units.
Ginnie Mae’s issuance was down from previous months, which saw the issuance volume reach a record high of $89 billion in April. However, the corporation’s volume remains elevated relative to typical levels, which hover around $60 billion. The bulk of Ginnie Mae’s issuance continues to be dominated by single-family MBS, with 95% issuance being MBS composed of single-family mortgages and 5% securing multifamily properties.
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FHFA issues Policy Statement on Fair Lending
Last Friday, the Federal Housing Finance Agency (FHFA) published a policy statement on fair lending oversight of the regulated entities Fannie Mae, Freddie Mac and Federal Home Loan Banks. The policy statement is intended to provide a foundation for FHFA and a commitment to other federal agencies to fair lending. Namely, FHFA noted its commitment to working with HUD and the Consumer Financial Protection Bureau. The policy statement is related to monitoring and information gathering for the Equal Credit Opportunity Act, the Fair Housing Act and the Federal Housing Enterprises Financial Safety and Soundness Act. FHFA has also issued Orders on Fair Lending Reporting to Fannie Mae and Freddie Mac (the Enterprises) that require the Enterprises to submit quarterly reports to FHFA on fair lending information and relevant data. These announcements come after several other recent proclamations from federal agencies focusing on racial equity.
The policy statement outlines several tools that FHFA will use in order to address racial equity issues. This includes reviewing the regulated entities’ internal fair lending monitoring, risk assessments, procedures, and internal systems. It will also view favorably any entities that act in a manner consistent with fair lending practices and entities that self-report any violations of fair lending laws.
“FHFA's Policy Statement on Fair Lending clearly communicates the Agency's fair lending expectations for the regulated entities and outlines the Agency's fair lending oversight and enforcement to ensure compliance with the law," stated Acting Director Sandra Thompson in a release.
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Lumber costs impacting affordable homebuilding
Lumber costs have shocked the housing industry over the past year, and the impacts of rising prices are still being felt throughout affordable housing development. Habitat for Humanity, which offers mortgages through the organization in exchange for “sweat equity” of families who assist with building their own home, is beginning to see severe impacts of lumber costs on their model. A Habitat affiliate in Greater Birmingham reported that they stopped taking applications from families for the first time in two decades and that they were able to build only 11 homes last year compared to an average of 30 homes annually. Charles Moore, chief executive officer of the affiliate, explained that high prices, material delays, and lack of volunteers due to COVID-19 all contributed to this issue. Morgan Pfaff, executive director for Habitat of Wisconsin River area, reported similar issues in Wisconsin. In response, the group lowered their anticipated builds from six homes this year to just one.
Lumber costs have been a topic for several months, and though prices are starting to lower, the impact of lowered costs has not yet made its way to consumers. Further, reports of projects being canceled or postponed due to the high lumber costs are contributing to the lower prices, which continues to exacerbate the need for more affordable housing.
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Chart of the week: Long wait times and high appraisal costs pushing FHA borrowers out of the market
An analysis from the Urban Institute finds that high home prices are boxing FHA and VA borrowers out of the homeownership market as more sellers are able to act on their preference against selling to borrowers with government-backed loans. Urban finds that just 30% of sellers would be likely to accept an offer from a FHA or VA buyer, primarily due to more stringent inspection and appraisal requirements and the lengthy finalization process.
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The Washington Post examines the effect of intensifying summer heat on residents of older manufactured homes in Arizona, whose homes often cannot support air conditioning even if they can afford it. A leader at Habitat for Humanity Tucson notes that such homes are often subject to their own appraisal gap in bringing them up to date: “It could cost $30,000 to make them safe. They aren’t worth $30,000.”
Vox profiles a housing watchdog that is suing a group of New York landlords it says discriminated against prospective tenants with housing choice vouchers. In addition to suing under New York’s 2019 law banning source-of-income discrimination, the watchdog is also arguing that discrimination against those with vouchers is unconstitutional due to its disparate impact on groups protected by the Fair Housing Act.
ProPublica reports on a Hawaii law that aims to make buyers of coastal property in the state aware of the risks posed by rising seas. The law was enacted following a ProPublica and Hawaii Star-Advertiser investigation into Oahu homeowners’ practice of illegally damaging public beaches in order to protect homes at risk of being sucked into the ocean, sometimes in order to position the properties for sale to unsuspecting buyers.
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Monday, July 12
Tuesday, July 13
Wednesday, July 14
Thursday, July 15
Friday, July 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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