Weekly update from the National Housing Conference
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In this issue
February 21, 2021
Issue 90-7

• Housing, banking stakeholders submit comments on Federal Reserve's CRA ANPR
• Study finds significant barriers to Black homeownership
• White House extends protections for homeowners
• HUD announces loan guarantee for affordable housing in District of Columbia
• 2021 GSE Scorecard lays groundwork for living will and capital rule requirements
• HUD continues to fill out leadership team
• Chart of the week: Black homeowners receive higher interest rates compared to White homeowners
Find the information you need at NHC's COVID-19 Housing Resource Center
The importance of partnerships that center resident outcomes

by Olivia Barrow, Low Income Investment Fund

In October 2019, I was fortunate to attend Urban Institute’s Foundations for the Future of Housing Conference in Chicago, thanks to a generous scholarship provided by NHC’s Emerging Leaders in Affordable Housing (ELAH) program. At that time, the challenges and devastation of the COVID-19 pandemic were still unimaginable. Now, with millions of households behind on rent and struggling to continue making ends meet, themes from that conference resonate with greater urgency—particularly the importance of innovative partnerships that center resident outcomes.

The Low Income Investment Fund (LIIF) is a national Community Development Financial Institution and proud member of NHC. As LIIF’s policy manager, I work closely with NHC on a range of federal policy issues, from Community Reinvestment Act (CRA) regulations to policies to address the racial homeownership gap. These policies were important long before the current public health and economic crises laid siege to our communities and have only become more urgent as communities of color and other historically underserved populations experience disproportionate harm from the pandemic.

Fortunately, there are opportunities to be bold in our nation’s response to these inequities. At LIIF, we recently refined our mission to put racial equity at the center of our investments in communities. As part of our new strategic plan, LIIF, Stewards of Affordable Housing for the Future and the National Affordable Housing Trust, a national nonprofit Low Income Housing Tax Credit syndicator – entered into a joint venture aligned around a shared commitment to housing equity. Our partnership focuses on building quality, safe affordable housing with an approach that centers resident voice and community choice to achieve our vision for more equitable, opportunity-rich communities. Together our work will provide more streamlined access to financing for the entire lifespan of a development, advance the creation of new products that are responsive to community needs and support developers of color.
News from Washington
Housing, banking stakeholders submit comments on Federal Reserve's CRA ANPR

This week, housing, banking and community development stakeholders including NHC, the Affordable Housing Tax Credit Coalition, American Bankers Association, Center for Responsible Lending, Enterprise Community Partners, and National Community Reinvestment Coalition submitted comment letters in response to the Federal Reserve’s Advance Notice of Proposed Rulemaking (ANPR) to modernize the Community Reinvestment Act (CRA). The Federal Reserve’s ANPR follows the Office of the Comptroller of the Currency’s (OCC) separate rulemaking, which was finalized in June and broke from what has been an historically aligned regulatory regime across the OCC, Federal Reserve and Federal Deposit Insurance Corporation (FDIC).

The Federal Reserve’s second ANPR question, on the potential to bring CRA regulations more in line with the law’s historical purpose, attracted substantial attention. In response to this question, many organizations noted CRA’s original purpose as an anti-redlining law and argued that CRA’s focus on proxies for race like geography and income are not adequate to address the race-specific effects of redlining and related discriminatory practices. NHC’s comments encouraged the Federal Reserve to begin to remedy this by requiring explicit tracking and reporting of a bank’s performance on lending to people of color.

Many stakeholders also emphasized the importance of the Federal Reserve, FDIC and OCC returning to a joint regulatory framework. They warned that maintaining an inconsistent framework would create both legal and practical difficulties for CRA lenders and risk a diminution of CRA activity in general.

The path forward for CRA regulation is unclear. Under the new administration, there may be an opportunity to reconcile the rulemaking across the three regulators, an outcome the Federal Reserve has signaled would be welcome. In a December speech to the Consumer Bankers Association, Federal Reserve Governor Lael Brainerd said of the Federal Reserve’s ANPR, “Our hope is that [it] provides a foundation for the agencies to converge on a consistent approach to CRA modernization that also has strong stakeholder support.” 
Study finds significant barriers to Black homeownership

Black households are more than twice as likely as White ones to be rejected for mortgage loans and to have student loan debt, the National Association of REALTORS® (NAR) finds in a new report on race and homebuying. The report comes at a time when racial equity concerns are increasingly at the forefront of the national conversation, and highlights the systemic barriers minority households face when purchasing a home.

In addition to the hurdles posed by student loan debt, which affects 43% of Black households versus 21% of White and 24% of Hispanic ones, broader systemic barriers affect minority households. For example, 37% of White homeowners used funds from a previous home sale to finance the down payment of their current home, compared with 21% of Hispanic homeowners, 18% of Asian homeowners, and 17% of Black homeowners. Black and Hispanic homeowners were respectively three and two times more likely to tap into retirement funds to finance down payments than Asian and White homeowners.

The report’s authors noted that due to these barriers, the benefits of the COVID-19 housing boom have not been distributed evenly. “As indicative of the K-shaped economic recovery, greater numbers of potential first-time homebuyers – many of whom are minorities – are feeling discouraged by disproportionate job losses,” said NAR Chief Economist Lawrence Yun. “Essentially, they’re being priced out of owning a home because of rapidly rising home prices resulting from historically-low housing inventory.”
White House extends protections for homeowners

This week, the White House announced extensions of forbearance options and foreclosure protections for homeowners experiencing financial hardship due to the COVID-19 pandemic. The foreclosure moratorium for federally guaranteed mortgages and deadline to enroll in forbearance were both extended through June 30, 2021, while the maximum duration borrowers may remain in forbearance was extended from 12 to 18 months.

In accordance with the White House’s announcement, the Department of Agriculture, the Department of Housing and Urban Development (HUD), and the Department of Veterans Affairs released statements extending protections for borrowers and renters under their respective programs until July. Combined with the Federal Housing Finance Agency’s (FHFA) 3-month extension of forbearance for GSE borrowers, these new directives will extend protections for 70% of existing single-family mortgages.

The extensions come amid increasing concerns about the growing number of borrowers in forbearance approaching the end of the original 12-month forbearance period. A significant portion of these homeowners are at risk of foreclosure upon exiting forbearance due to permanent job loss or a reduction in income due to COVID-19.

NHC recently co-led a diverse coalition of more than 350 groups, including 64 national housing and civil rights organizations, to call on Congress to fund $25 billion in direct assistance to homeowners in the COVID-19 stimulus package.
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HUD announces loan guarantee for affordable housing in District of Columbia

HUD will issue a $38.8 million loan to the District of Columbia under its Section 108 program, the agency announced Tuesday. The district will use the loan to establish a fund for rehabilitating and preserving existing affordable housing for residents making up to 80% of area median income.

Affordable housing is a frequent use for Section 108 funds, but previous recipients have also used them to rehabilitate historic buildings, boost small businesses, and even establish urban greenhouses in formerly industrial areas. HUD Principal Deputy Assistant Secretary for Community Planning and Development James Arthur Jemison said, “Today’s funding announcement demonstrates HUD’s commitment to working collaboratively with communities to help revitalize neighborhoods and realize their priorities.”

In addition to the loan from HUD, the city has also taken advantage of funding from Treasury’s Hardest Hit Fund to relaunch the HomeSaver program, which distributed funds in 2010 to district households at risk of foreclosure. The federal funds are expected to boost the district’s recovery from the COVID-19 pandemic and its economic impact, which have disproportionately affected low-income and minority residents even as housing prices have continued to skyrocket.

“Building back better and ensuring an equitable recovery means working together across every level of government to meet the needs of those who have been hit hardest by the pandemic and the economic crisis it caused,” said Mayor Muriel Bowser. “We know that for many Washingtonians, access to safe and affordable housing is the first step to getting back on their feet."
2021 GSE Scorecard lays groundwork for living will and capital rule requirements

FHFA published the 2021 Scorecard for Fannie Mae, Freddie Mac and Common Securitization Solutions – the GSEs’ shared platform for single-family securitization. The scorecard focuses on three objectives: the GSE’s mission to foster competitive, liquid, efficient and resilient (CLEAR) national housing finance markets that support sustainable homeownership and affordable rental housing; safe and sound operations; and appropriate planning for an eventual exit from conservatorship.

The 2021 Scorecard introduces new resolution planning provisions, requiring the GSEs to develop living wills in the event of receivership. Fannie Mae and Freddie Mac must demonstrate how they would preserve business operations “with neither disruption to housing and finance markets nor utilizing extraordinary support from the Treasury Department or taxpayers.” The GSEs must also develop and implement transition plans to support their eventual compliance with the Enterprise Capital Rule.

“The 2021 Scorecard will ensure that Fannie Mae, Freddie Mac and Common Securitization Solutions properly serve borrowers and renters, protect taxpayers, and support the secondary mortgage market,” said FHFA Director Mark Calabria.

Fannie Mae and Freddie Mac also recently reported fourth quarter earnings and full-year 2020 financial results. Fannie Mae’s net income decreased by $2.4 billion from 2019 to 2020, while Freddie Mac reported a modest increase of $0.1 billion.
NHC welcomes new ELAH members!
Ariane Pina
Ashia Gallo
Brian Scott
Brittany Darby
Catarina Merolli
Hayley Kenyon
Hope Lanphear
Katherine Gannon
Kimberly Kerrigan
Kyo Tang
Mackenzie Drosd
Michael Jun
Rose Haslehurst
Rose M. Lewis
RoseAngel Taylor
Sal Rajput
Samar Jha
Stephanie Garcia
Victoria Wilder
William McCoy
HUD continues to fill out leadership team

This week, HUD announced the appointment of several new staff members. This follows the announcement of the agency’s roughly two dozen initial leadership appointments in January.

HUD announced the following new leadership appointees: Jim Crawford, Special Assistant to the Deputy Secretary; Dan Hardcastle, Special Assistant for Special Projects; Lopa Kolluri, Principal Deputy Assistant Secretary for Housing; Gina Metrakas, Senior Advisor for Executive Orders and Executive Actions; and Michele Perez, Assistant Deputy Secretary for Field Policy and Management.

“These talented public servants will be valuable additions to HUD as we work to expand equitable access to housing and help our nation build back better by confronting COVID-19, equitably serving all Americans, creating economic opportunity, and addressing the climate crisis,” said HUD Chief of Staff Jenn Jones.

President Biden’s nomination for HUD Secretary, Rep. Marcia Fudge (D-Ohio), was advanced by the Senate Banking Committee earlier this month and is awaiting confirmation in the full Senate. Rep. Fudge “is a lifelong advocate in the fight against poverty and inequality,” NHC President and CEO David Dworkin said in a letter to Senate leaders. She “would bring a fresh perspective to housing and community development as Secretary,” Dworkin said.
Chart of the week
Chart of the week: Black homeowners receive higher interest rates compared to White homeowners

The Harvard Joint Center for Housing Studies’ Housing Perspectives blog highlighted the fact that Black homeowners routinely receive higher interest rates than White homeowners across every income bracket. The blog further noted that Black homeowners who refinance have interest rates less than one basis point lower than the rates received by White homeowners who did not refinance.
What we're reading
In a New York Times op-ed, prominent housing voucher researcher Dr. Eva Rosen argues that expanding access to federal Housing Choice Vouchers should be a top priority for the Biden administration. Rosen notes, however, that the income and social mobility promise of such programs will not be fulfilled until Congress passes a law “preventing landlords from rejecting tenants simply because of their voucher, something that is all too common” for voucher recipients.

An article from FairWarning cautions that poor ventilation in older multifamily buildings may allow for transmission of COVID-19, even when residents socially distance from each other. Though this method of transmission is considered rare, it is more likely to occur in older buildings with units that share central heating and HVAC systems. According to an expert quoted in the article, “authorities should recommend, if not require, inspect[ion] of air filters and other components of HVAC systems to assure that individual apartments or rooms are property ventilated.”

A new case study from UC Berkeley’s Terner Center for Housing Innovation examines the construction of a permanent supportive housing development in San Francisco whose cost and timeline were significantly below what is typical for the area to draw lessons for quicker and cheaper affordable housing development. Off-site construction of units – which allowed for site work and unit construction to occur simultaneously – and stakeholders’ commitment at the start to firm goals for both the cost and duration of the project were particularly important to the project’s success.

An op-ed for the Cook Political Report asks whether a new bill to reintroduce earmarks in the appropriations process might encourage bipartisanship by providing “the grease needed to unlock a gridlocked system.” Though pork barrel spending might help on the margins, the author is skeptical that it will have major effects: “With so few members sitting in competitive districts (just 16 House members sit in a district carried by the presidential candidate of the other party), the need to show tangible results from working with the other side or voting for a controversial bill is […] less important.”
The week ahead
Monday, February 22

Tuesday, February 23
Enterprise: Indigenous home design, 3:00 – 4:00 p.m. ET

Wednesday, February 24
NCSHA: Toward a racially just housing system, 11:30 a.m. – 5:00 p.m. ET

Thursday, February 25
NMHC: Racial equity event, 1:00 – 3:30 p.m. ET
Novogradac: LIHTC 101; the basics, 1:00 – 4:00 p.m. ET

Friday, February 26
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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