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Weekly update from the National Housing Conference |
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In this issue
October 10, 2021
Issue 90-38
• FHFA disbands CSS advisory group exploring services for private MBS issuers
• Senate Banking Committee considers McCargo for Ginnie Mae presidency
• Freddie Mac to offer $3 billion in affordable housing bonds
• HUD announces new protections for subsidized housing tenants
• HUD releases climate plan
• FDIC and OCC release CRA ratings
• HUD announces disaster assistance for southwestern New Hampshire
• Chart of the week: Black and Hispanic families experience far worse returns from distressed sales
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Find the information you need at NHC's COVID-19 Housing Resource Center |
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The next few weeks decide if we win or lose
By David M. Dworkin, NHC president and CEO
If you are reading this note, chances are that you have dedicated most of your adult life to housing. Some of us are builders and others advocates. Some are developers and others researchers. We are Democrats, Independents, and Republicans, conservatives, centrists, and progressives. To us, the importance of housing to our nation, our economy, our neighborhoods, and our families is obvious.
But that is not the case with most policymakers in Washington. They too have dedicated their lives a wide range of issues, about which they equally passionate, like climate change, national defense, health care, and deficit reduction. So, if we want housing to be represented in the largest spending bill in American history, we will have to fight for it. Because as I write this note, housing may already have been cut entirely from the bill.
Slashing or eliminating spending on housing would contribute to escalating housing prices and be a devastating loss for racial equity. President Biden’s Build Back Better plan calls for the construction or preservation of 2 million affordable homes. A recent analysis published by Moody’s Analytics estimates there is an annual shortage of 100,000 affordable housing below demand. According to research by Freddie Mac, as of the fourth quarter of 2020, the U.S. had a housing supply deficit of 3.8 million units. The Neighborhood Homes Investment Act (NHIA) would build and rehabilitate approximately 500,000 homes. Literally building our neighborhoods back better. The Affordable Housing Credit Improvement Act (AHCIA) would create an additional 1,380,500 affordable rental homes over the next ten years.
Democrats from the White House to the Hill are quick to stress their support for racial equity. But where is it in this legislation? It’s in housing. As Lisa Rice, president and CEO of the National Fair Housing Alliance, said in Politico last week, “You cannot address issues of racial inequity if you do not address housing inequity — it is an impossibility. They’re so inextricably linked.” I couldn’t agree more. I said, “I don’t understand how you could possibly focus a bill on your highest priorities and not include racial equity. How do we tell people ‘Sorry, it’s not your more...
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News from Washington | By Luke Villalobos
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FHFA disbands CSS advisory group exploring services for private MBS issuers
FHFA announced Tuesday that it would disband a group of advisors to the Common Securitization Solutions (CSS) board, which oversees Fannie Mae and Freddie Mac's mortgage securitization platform. The advisors were brought on to explore the possibility of offering CSS services to private issuers of mortgage-backed securities (MBS). FHFA said it decided to ensure that CSS would "stay focused on the safety and soundness of the housing finance market and reduce unnecessary expenses as the Enterprises rebuild capital." The decision comes after a nearly two-year review of the feasibility of offering CSS services to firms other than Fannie and Freddie.
Matthew Feldman, former president and CEO of the Federal Home Loan Bank of Chicago, will join the CSS board as interim chair as the entity transitions to a singular focus on serving the Enterprises. CSS CEO Anthony Renzi will retain his position at the head of the company and his board membership.
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Senate Banking Committee considers McCargo for Ginnie Mae preside
The Senate Banking Committee held a hearing on the nomination of Alanna McCargo to head Ginnie Mae on Thursday. McCargo currently serves as a senior advisor at HUD and formerly held a senior role at the Urban Institute's Housing Finance Policy Center. She told Senators that she would work to expand access to government-backed financing as the country experiences an unprecedented shortage of affordable homes. She also said that though her ability to slow home price appreciation would be limited as Ginnie Mae president, she would work to ensure that government-backed homebuyers continue to receive favorable interest rates.
NHC endorsed McCargo's nomination last month. NHC's David Dworkin called her a "thought leader in the full range of home mortgage lending policymaking. He said she had the experience to meet the needs of both government-backed borrowers and investors in Ginnie Mae securities. NHC joined several other stakeholders in a letter to Senate leadership supporting her nomination, noting the need for capable leadership at an agency that has lacked a permanent president for nearly five years.
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Freddie Mac to offer $3 billion in affordable housing bonds
Freddie Mac announced Thursday that it planned to offer more than $3 billion in single-family affordable housing bonds through a new program intended to increase housing affordability and serve historically marginalized markets. The company will inaugurate the effort with a $285 million MBS issuance backed by loans purchased through its Home Possible 3% program, which offers 3% down payment mortgages to low- and moderate-income families.
Freddie Mac linked the planned bond issuance to past mission-driven work, including that of the company's Impact Bonds program. The program has issued more than $8.5 billion in green, sustainability, and social multifamily bonds, and its issuance of more than $425 million in single-family green bonds since April.
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HUD announces new protections for subsidized housing tenants
HUD announced Thursday that it would forbid landlords of HUD-subsidized properties from evicting tenants without providing a 30-day notice that includes information about federal emergency rental assistance resources.
HUD implemented the requirement by promulgating an interim rule that allows the HUD Secretary to increase the eviction notice period from 14 to 30 days and require landlords to provide information on emergency rental assistance during national emergencies such as the COVID-19 pandemic. HUD Secretary Marcia Fudge then issued a separate notice invoking her authority to increase tenant protections under the interim rule.
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HUD releases climate plan
HUD's plan calls for the agency to incorporate climate risks into underwriting standards, better incentivize green mortgage origination and strengthen disaster infrastructure and increase research into how climate change will affect HUD operations and the populations the agency serves. A new HUD Climate and Environmental Justice Council, led by a new Senior Advisor for Climate Change, will oversee the plan's implementation.
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NHC welcomes new members!
The Rocky Mountain Institute decarbonizes energy systems through rapid, market-based change in the world’s most critical geographies to align with a 1.5°C future and address the climate crisis.
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FDIC and OCC release CRA ratings
FDIC released ratings for institutions evaluated in July. Most of the 71 institutions FDIC reviewed earned "satisfactory" ratings, though nine institutions earned "outstanding" scores and 2 earned "needs to improve" scores. OCC's release includes ratings for the 14 institutions it evaluated in September. Of these institutions, 10 earned "satisfactory" ratings, and 4 earned "outstanding" ratings.
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HUD announces disaster assistance for southwestern New Hampshire
HUD announced that it would offer disaster assistance to New Hampshire residents affected by flooding in late July after President Biden declared a federal disaster in the state's southwestern portion.
The assistance includes providing mortgage relief to Federal Housing Administration-backed homeowners, offering mortgage and rehabilitation insurance to all homeowners, and ramping up housing counseling services in the region. HUD will also offer administrative flexibility to local agencies whose operations were affected by the storm.
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Chart of the week: Black and Hispanic families experience far worse returns from distressed sales
A working paper from the National Bureau of Economic Research finds racial disparities in household returns from housing that is "an order of magnitude larger than disparities arising from housing costs alone, and is driven almost entirely by differences in distressed home sales (i.e., foreclosures and short sales)." Though the authors find that homes owned by Black and Hispanic families do not appreciate in value any slower than homes owned by White families absent financial distress, they find that Black and Hispanic families experience far worse returns from distressed sales than do White families.
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Scotsman Guide profiles the Black Homeownership Collaborative, which is bringing a new playbook to increase Black homeownership. The profile notes that the Collaborative's motivation is as much about maintaining the health of mortgage markets as it is about racial justice. National Association of REALTORS® Vice President of Policy Advocacy Brian Greene said, "It's hard to know how much higher [the White homeownership rate] can go. If we're going to see growth in the market, it's largely going to be from other demographic groups."
A policy brief from the National Housing Resource Center (NHRC) argues that owner-occupants, especially first-time homebuyers, should be prioritized over investors in the homeownership market. The brief notes that nearly one in three home purchases in early 2021 were cash buyers, often looking to turn owner-occupied homes into rental properties. NHRC discusses several policy fixes to make owner-occupants more competitive with investors, including increasing incentives for Fannie Mae and Freddie Mac to originate small-dollar loans and creating a new federal down payment assistance program.
CityLab covers efforts to use technology to hold property owners accountable for blight in disinvested neighborhoods, including a Baltimore program that publicizes information about owners of vacant and dilapidated homes on a website accessible by QR code. Some advocates worry that increasing access to property ownership records could fuel displacement by making it easier for speculators to buy vacant property in low-income neighborhoods.
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Monday, October 11
Tuesday, October 12
Wednesday, October 13
Thursday, October 14
Friday, October 15
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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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