NCSHA Washington Report | May 5, 2023

It was an honor to be in Harrisburg this week for the 50^th anniversary celebration of the Pennsylvania Housing Finance Agency, in no small part because Pennsylvanians invented the very idea of a state HFA.

It’s true the CalVet Home Loan Program, launched in 1922, was the first statewide housing program, and New York and several other states issued financing through their new HFAs before Pennsylvania.

But Pennsylvania state legislators were the first to see “a need for both state financing and creation of incentives for private industry to enter the low- and moderate-income housing field,” according to a University of Michigan Law School review.

In fact, the Pennsylvania law said, “The Commonwealth has …  a general and continuing responsibility to eliminate conditions which prevent private industry from supplying housing to relieve the general shortage of housing.”

The Pennsylvania legislation established the basic statutory architecture on which other states built their housing finance agencies, consisting of three main pillars: 1) a state-authorized agency empowered to create its own capital through the issuance of bonds and other means; 2) a mandate to meet both the affordable homeownership and rental needs of low- and moderate-income residents throughout state; and 3) the ability to augment agency financing with both federal and state subsidies as they may be available.

Recent months have brought reminders of the essential importance of that third leg of the stool.

Pennsylvania HFA is one of 39 state housing finance agencies that administer the Housing Trust Fund, which provides indispensable funding for building and preserving housing for people with the lowest incomes, including families experiencing homelessness.

Announcing $382 million in new funding for the program this week, HUD Secretary Fudge said, “We’re proud to invest in states to create more affordable housing.”

Last month, HUD announced $171 million in funding for homeless service and housing programs dedicated to unsheltered and rural populations, following $315 million in awards made in February.

“Our job is not done,” HUD Deputy Secretary Todman said of the funding. “It is the good work of [states] like Georgia, Kentucky and across the country, that as their work progresses makes the case for additional funds.”

States are also ramping up their housing investments through their HFAs. Florida’s “Live Local Act,” enacted in March, is “the largest investment for housing efforts in state history,” committing $711 million for a range of initiatives through the Florida Housing Finance Corporation. Iowa in December made the largest investment in the 20-year history of its state housing trust fund, channeling funding through the Iowa Finance Authority to jurisdictions throughout the state.

Arizona Governor Ducey (R) last year signed into law a $60 million investment in the state’s housing trust fund, which was 50 percent more than the previous high for the program. Governor Hobbs (D) is seeking a 2.5-fold increase this year.

In state housing finance, the best ideas can be contagious.

Stockton Williams | Executive Director

Stockton Williams | Executive Director

State HFA Emergency Housing Assistance

In This Issue

• Tobin Named CEO of NAHB
• HUD Makes 2023 Housing Trust Fund Allocations to States
• IRS, Treasury Solicit Comments on 2023–24 Priority Guidance Plan
• Senate Banking Housing Subcommittee Discusses Rural Housing Legislation
• Senate Banking Committee Hearing Debates Federal Flood Insurance Program Reauthorization
• CFPB Proposes PACE Loan Consumer Protections
• NCSHA in the News
• Looking Ahead

Tobin Named CEO of NAHB
The National Association of Home Builders this week named Jim Tobin as CEO, effective June 1, succeeding Jerry Howard, who has led the organization since 2001. Jim has been the builders’ top lobbyist for many years and has been a frequent participant in NCSHA meetings. HFAs and home builders have a deep history of collaboration on the ground around the country and in Washington, DC. NCSHA congratulates Jim and looks forward to working with him in his new role. We also express our utmost thanks to Jerry for his remarkable leadership and friendship.

HUD Makes 2023 Housing Trust Fund Allocations to States
This week, the Department of Housing and Urban Development (HUD) allocated $382 million to states from the national Housing Trust Fund (HTF), which provides a source of capital funding to increase and preserve the supply of housing for people with the lowest incomes, including those experiencing homelessness. Funding for HTF comes from a modest contribution of new business income from Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac rather than federal appropriations. Unfortunately, but as expected, the GSEs’ new business over the last year was substantially lower than it has been in the past, resulting in a cut of approximately 50 percent compared with 2022 HTF allocations. See NCSHA’s blog for the state-by-state allocation amounts.

IRS, Treasury Solicit Comments on 2023–24 Priority Guidance Plan
On Thursday, the Internal Revenue Service (IRS) and U.S. Department of the Treasury issued Notice 2023-36 inviting the public to submit recommendations for items to be included in the 2023-24 Priority Guidance Plan. The Priority Guidance Plan will identify guidance projects Treasury and IRS intend to work on during the 12 months beginning July 1, 2023, through June 30, 2024. Comments are due to Treasury/IRS by June 9. If you have input for NCSHA to consider in its comment letter, please contact Jennifer Schwartz by May 31.

Banking Housing Subcommittee Discusses Rural Housing Legislation
The Senate Banking, Housing, and Urban Affairs Subcommittee on Housing, Transportation, and Community Development held a hearing on Tuesday to discuss new legislation designed to reform certain USDA rural housing programs. The Rural Housing Service Reform Act of 2023 was introduced in the Senate on Monday by Subcommittee Chair Tina Smith (D-MN) and Senator Mike Rounds (R-SD). Smith opened the hearing by saying the legislation was informed by the subcommittee’s hearings on rural housing issues over the past year. 

The legislation was well received during the hearing among the panel of five witnesses as well as by the Democratic and Republican Senators who attended. Two of the bill’s provisions received particular praise: a provision allowing Section 521 rental assistance to be “decoupled” from Section 515 properties, allowing properties with expiring USDA mortgages to retain their affordability provisions after the mortgage expires, and permanent authorization of the Rental Preservation Demonstration (MPR) pilot program. New Ranking Member Cynthia Lummis (R-WY) highlighted her support for the decoupling provision in her opening remarks. David Lipsetz, president and CEO of the Housing Assistance Council, testified the legislation would allow the rural housing community to preserve the affordability of many rural housing units that would otherwise be lost and permanently authorizing the MPR program would greatly aid in that effort.

Senate Banking Committee Hearing Debates Federal Flood Insurance Program Reauthorization
A long-term reauthorization of the National Flood Insurance Program (NFIP) should help communities better guard against flooding, members and witnesses argued during a Senate Banking Committee hearing held Tuesday. The hearing follows several hearings the committee held last year on reauthorizing NFIP. The program expires September 30 and has been subject to 25 short-term reauthorizations over the past seven years. In his opening statement, Committee Chair Sherrod Brown (D-OH) argued that, due to climate change, the need for Congress to invest in flood mitigation and floodplain management to make communities more resilient is more important than ever. Ranking Member Tim Scott (R-SC) said comprehensive reauthorization of NFIP is critical and he would soon introduce legislation to help flood-prone communities receive resources to prevent future flood damage. Scott also argued Congress should not focus exclusively on flood risk but look holistically at how to account for losses caused by other catastrophic weather events, such as windstorms and tornadoes.

CFPB Proposes PACE Loan Consumer Protections
On May 1, the Consumer Financial Protection Bureau (CFPB) issued an advance copy of a proposed rule that would implement a congressional mandate to establish consumer protections for residential Property Assessed Clean Energy (R-PACE) loans. These loans are secured by a property tax lien on the borrower’s home and are frequently used by homeowners to finance clean energy or energy efficiency improvements. The proposed rule would amend Regulation Z to address how the Truth in Lending Act applies to R-PACE transactions, as well as adjust disclosure requirements to better apply to R-PACE loans and help homeowners understand the impact of an R-PACE loan on their property tax payments. Comments are due to the CFPB by July 26. If you have input for NCSHA to consider in submitting its comments, please contact Rosemarie Sabatino by July 7.

NCSHA in the News
Bloomberg Tax, 5.2.23, Housing Nonprofits Push Congress to Ease Investor Tax Credit Fights

Looking Ahead…

Legislative and Regulatory Activities

• May 12 | Comments Due | EPA Implementation Framework for the Greenhouse Gas Reduction Fund
• May 12 | Comments Due | Proposed Changes to GSE Capital Requirements
• May 17 | Comments Due | FHFA RFI on Enterprise Single-Family Social Bond Program
• May 26 | Comments Due to NCSHA | FHFA Proposed Rule on Fair Lending, Fair Housing, and Equitable Housing Finance Plans
• May 31 | Comments Due to NCSHA | Treasury/IRS Priority Guidance Plan
• June 5 | Comments Due to NCSHA | IRS MRB and MCC Purchase Price Limits and Safe Harbors Revenue Procedure
• June 9 | Comments Due | Treasury/IRS Priority Guidance Plan
• June 19 | Comments Due | IRS MRB and MCC Purchase Price Limits and Safe Harbors Revenue Procedure
• June 26 | Comments Due | FHFA Proposed Rule on Fair Lending, Fair Housing, and Equitable Housing Finance Plans
• July 7 | Comments Due to NCSHA | CFPB Proposed Rule on R-PACE Loans
• July 24 | Comments Due | HUD Advance Notice of Proposed Rulemaking on Section 504
• July 26 | Comments Due | CFPB Proposed Rule on R-PACE Loans

NCSHA, State HFA, and Industry Events

• May 9 | Ballard Spahr National Housing Summit | Washington, DC
  Jennifer Schwartz will speak at this event.
• May 10, 11:59 p.m. ET | Entry Deadline | NCSHA’s 2023 Awards for Program Excellence
• May 15 | Last Day for Discounted Early Registration, Hotel Group Rate: NCSHA’s Housing Credit Connect & Marketplace | Seattle, WA
• May 31 | Early-Bird Registration Ends | Louisana Housing Conference | Baton Rouge, LA
• May 31 – June 1 I Fannie Mae Affordable Lending Summit | Washington, DC
  Stockton Williams will speak at this event.
• June 7 | HCCP Board of Governors Average Income Test Webinar | Virtual
  Jennifer Schwartz will speak at this event.
• June 13 – 16 | NCSHA’s Housing Credit Connect & Marketplace | Seattle, WA
• July 24 – 26 | Texas Affiliation of Affordable Housing Providers 2023 Texas Housing Conference | Austin, TX
  Jennifer Schwartz will speak at this event.

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