Weekly update from the National Housing Conference |
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In this issue
May 22, 2022
Issue 91-20
• HUD expands access to FSS program
• Fannie Mae launches Sustainable Communities Innovation Challenge
• FHA to offer lower premiums for green Section 232 mortgages
• Commercial real estate leaders establish Multifamily Impact Council
• FDIC bans deceptive use of its brand
• Senate committee meets on housing resilience
• Chart of the week: Delinquent exits from COVID-19 forbearance move in different directions for federally-backed and private mortgages
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NHC Annual Member Meeting Info
Annual Meeting (online)
June 14, 2022
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What will happen with house prices?
This week’s Member Note is the first in a series of guest commentary by Bill McBride, whose Calculated Risk Blog is one of the most prolific and educational sources of housing data and analysis online. Once a month, we will publish one of Calculated Risk’s blogs or co-write one with him. We hope that you find this new addition as useful as we do.
It is clear that over the next year house price growth will slow from the torrid 20% year-over-year (YoY) pace in February (and likely also in the March report that will be released later this month). I think there are three likely scenarios going forward for house prices that I’ll call “slow”, “stall” and “bust”.
“First, we guess … Then we compute the consequences of the guess … to see what it would imply and then we compare the computation results to nature or we say compare to experiment or experience, compare it directly with observations to see if it works.
“If it disagrees with experiment, it’s wrong. In that simple statement is the key to science. It doesn’t make any difference how beautiful your guess is, it doesn’t matter how smart you are who made the guess, or what his name is … If it disagrees with experiment, it’s wrong. That’s all there is to it.”
I take the same approach to making housing predictions. First, I make some guesses as to what will happen (I tell myself some stories), and then I see if it fits the data. If the data doesn’t fit the story, the guess is wrong.
So, these are just guesses - and the data will tell us which (if any) are correct.
Slow, Stall or Bust
My definition of “slow” house price growth will be annualized growth in the mid-single digits. For the “stall” scenario, this will be close to no change (seasonally adjusted, annualized) in house prices. And for the “bust” scenario, this would be house more...
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News from Washington | By Luke Villalobos
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HUD expands access to FSS program
On Monday, the Department of Housing and Urban Development announced changes to the Family Self Sufficiency (FSS) Program that permanently expand the definition of an eligible family to include tenants of privately owned multifamily properties with Project Based Rental Assistance (PBRA). The new rule updates several parts of the program and reduces administrative burdens for enrollment.
The changes also expand eligibility for program enrollment to include any adult member of the household. Previously, only heads of households were eligible. The change makes the program more able to accommodate families whose head of household cannot work due to disability, poor health, or caretaking responsibilities. The new rule also expands on the definition of "good cause" to include participants pursuing a long-term goal that will ultimately help them get ahead, such as a college degree, rather than only counting reasons outside the family's control.
These changes are a direct result of meetings that HUD Secretary Marcia Fudge had with former public housing and voucher residents covering barriers to financial growth and experiences within HUD programs.
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Fannie Mae launches Sustainable Communities Innovation Challenge
Fannie Mae announced on Monday the launch of its 2022 Sustainable Communities Innovation Challenge with a focus on advancing racial equity in housing. Proposals should address supply, funding, and credit barriers from different sectors seeking to advance equity initiatives. Fannie Mae will award contracts to entities implementing and scaling innovative ideas for equitable housing. The call for ideas is open through June 17.
"Fannie Mae is proud to launch the next iteration of the Innovation Challenge and support innovative projects that promote racial equity in housing in the United States," said Maria Evans, Vice President of Community Impact at Fannie Mae. "The housing journey varies depending on who you are, with some people experiencing multiple obstacles as they try to access housing. The Innovation Challenge aims to address those barriers. [...] We are excited to collaborate with new partners to source innovative ideas that help underrepresented populations find quality, affordable, stable places to call home."
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FHA to offer lower premiums for green Section 232 mortgages
FHA announced Wednesday that it would significantly reduce mortgage insurance premiums for residential care properties financed through the Section 232 program that meet green building standards. The new green mortgage insurance premium will be available to new Section 232 mortgages for properties that achieve significant energy or water efficiency levels, or existing green properties that use the savings by refinancing with a lower premium to achieve even better energy and water efficiency.
“Part of HUD’s mission is creating and supporting resilient communities. This action today brings together two forms of resilience: long-term care and energy efficiency,” said Deputy HUD Secretary Adrianne Todman. “With today’s action, we are lowering costs for achieving modern, energy-efficient facilities that will combat climate change while enhancing the safety and well-being of Americans requiring ongoing care.”
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Commercial real estate leaders establish Multifamily Impact Council
On Thursday, over 20 commercial real estate industry leaders announced a newly established Multifamily Impact Council (MIC). The MIC is a nonprofit membership organization created as a collaborative effort across the multifamily industry to develop and maintain multifamily impact investing principles and reporting guidelines to help increase the flow of global impact capital into affordable and sustainable rental housing in the United States.
The MIC has three primary objectives. First, establish and maintain impact investing principles and data metrics aligned with Environmental, Social, and Governance (ESG) standards specific to the multifamily industry. Second, build strategic partnerships with existing ESG certification and research organizations to simplify existing processes and develop industry-specific tools to calculate social return on investment. Third, serve as an industry clearinghouse for research, best practices, and collaboration.
Bob Simpson will serve as President and CEO of MIC, bringing over 25 years of housing finance and public policy expertise to the new organization.
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FDIC bans deceptive use of its brand
FDIC issued a final rule Tuesday prohibiting unauthorized parties from using its name or logo or otherwise misrepresenting FDIC's deposit insurance. The move comes after several years in which FDIC and other federal regulators have seen an increase in individuals and firms misusing information relating to FDIC for private gain, something federal regulators could undermine faith in FDIC's mission to protect consumers from bank failures.
The move was lauded by other federal agencies, with CFPB releasing an enforcement memorandum barring firms from making deceptive representations about FDIC insurance. “People know and trust the FDIC name and logo, and firms must not prey on that trust by making deceptive representations about deposit insurance,” said CFPB Director Rohit Chopra. “Companies undermine competition, erode confidence in the deposit insurance system, and threaten our hard-earned savings when they engage in false marketing or advertising.” |
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Senate committee meets on housing resilience
The Senate Committee on Banking, Housing, and Urban Affairs met on Wednesday for a hearing titled Addressing Climate Change with Energy-Efficient and Resilient Housing. The hearing focused on addressing climate change and housing affordability and creating a more resilient housing supply. Krista Egger, vice president of Building Resilient Futures at Enterprise, testified before the Committee and called for a plan to stabilize vulnerable communities through federal funding investment, noting that low- and moderate-income communities are hit hardest by natural disasters.
“Rather than spending hundreds of billions every year to respond to disasters after they occur and rebuild structures that couldn’t withstand these events, we have an opportunity to make an upfront investment in long-term resilience so that the homes built today will still be around for our children and grandchildren,” she stated.
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Delinquent exits from COVID-19 forbearance move in different directions for federally-backed and private mortgages
A CFPB report on mortgage servicing during the COVID-19 pandemic finds that delinquent exits from COVID-19 hardship forbearance fell for federally-backed loans at the end of last year, but rose for private loans. According to CFPB, “several servicers reported increases in both the number and percentage of delinquent forbearance exits in December 2021. Borrowers with loans at these servicers may face an increased risk of failing to transition to loss mitigation upon exiting forbearance.”
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A statement from the National Fair Housing Alliance encourages President Biden to prioritize fair housing in his new pledge to close the affordable housing gap. The statement notes that the White House Housing Supply Action Plan seeks to address affordable housing without calling out the deep disparities that plague housing markets, and calls for the inclusion of five specific measures to advance equity. "Affordable housing on its own does not create housing choices that are free of discrimination, nor does it even provide equitable access to housing opportunities," said Lisa Rice, President and CEO of NFHA.
An article in the Washington Post investigates HUD's charge that Texas discriminated against Black and Hispanic neighborhoods in allocating disaster funding following the historic Hurricane Harvey. Flood-prone neighborhoods in Houston received none of the $1 billion in federal funds Texas received following the hurricane, leaving residents of impacted areas on their own as they dealt with consequences like poor drainage and black mold.
An essay in Boom California covers the consequences of gentrification in rural western Marin County, north of San Francisco. “Gentrification is often thought of as an urban phenomenon, yet in Northern California, what’s happening in rural Marin County—where there is gaping income inequality and a severe housing squeeze—is an essential part of the bigger picture of gentrification in the San Francisco Bay Area as a whole,” the author writes. The essay explores gentrification’s effect on the area’s agricultural workers, who are often pushed out of their own homes and into dormitories on farms, where they are more vulnerable to abuse by employers.
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Monday, May 23
Tuesday, May 24
Wednesday, May 25
Thursday, May 26
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