July 29, 2010

On July 27, the House Financial Services Committee held a markup on H.R. 4868, the Housing Preservation and Tenant Protection Act.  This bill was introduced by Committee Chairman Barney Frank (D-MA) to stem the loss of affordable rental housing units across the country.  The bill provides resources and incentives to help prevent the further loss of federally and state-financed affordable housing due to conversion to market-rate housing, deterioration, and foreclosure, and to prevent the displacement of low-income tenants. 

At NCSHA’s request, H.R. 4868 includes a provision eliminating the prohibition of Ginnie Mae securitization of HFA Risk-Sharing loans.  This amendment would facilitate the sale of bonds to fund HFA loans necessary for the development and preservation of affordable housing.  The bill also contains language proposed by NCSHA to offer the owners of properties with state-financed interest reduction subsidies the option of accepting a project-based Section 8 Housing Assistance Payment (HAP) contract when their mortgages mature, to help preserve the affordable properties. 
 
In addition, the legislation would:
 
  • Establish a first right of refusal that provides state housing agencies with an opportunity to purchase a property from an owner who wishes to sell their property.  Significantly, the bill does not require an owner to sell their property or prevent them from obtaining fair market value.  Chairman Frank moved this right of first refusal from HUD to state housing agencies in a manager’s amendment during the markup.
  • Provide grants and loans to for-profit and non-profit housing sponsors to help ensure the property is recapitalized and kept affordable.
  • Establish a voluntary Preservation Exchange Program to encourage owners to sell properties to purchasers who will keep the housing affordable.
  • Allow owners to request project-based assistance in lieu of enhanced vouchers, which serves to help preserve the long-term affordability of the project, assist with capital for rehabilitation, and ensure that tenants are not displaced.
  • Allow owners to receive budget-based rent increases, thus ensuring that the properties are adequately maintained and encouraging owners to renew Section 8 contracts.
     
A vote on H.R. 4868 on the House floor has not yet been scheduled.  For more information, please contact Ellen Lurie Hoffman.