NCSHA Washington Report | June 2, 2023
As cities around the country are reportedly considering converting vacant office space into apartments and other uses, the federal government is missing an opportunity to repurpose obsolete buildings it no longer needs into housing for those most deeply affected by America’s historic affordability crisis: people experiencing homelessness.
The McKinney-Vento Act gives nonprofit organizations and state and local governments an effective right of first refusal to acquire at no cost surplus federal properties — including office buildings — to facilitate their redevelopment as affordable apartments for families and individuals facing this plight.
Read NCSHA’s recommendations for improving the federal process and our joint op-ed with the National Homelessness Law Center, published in The Hill.
Stockton Williams | Executive Director
Stockton Williams | Executive Director
State HFA Emergency Housing Assistance
In This Issue
- NCSHA Welcomes New Members
- House, Senate Pass Debt Ceiling Increase Bill
- AHCIA Earns Wide Bipartisan Support in Three Weeks Since Introduction
- FHA Releases New Plan to Help Struggling Homeowners
- Thompson Defends LLPA Changes at House Committee Hearing
- FHFA Requests Input on Multifamily Tenant Protections
- NCSHA in the News
- Looking Ahead
NCSHA Welcomes New Members
These organizations joined NCSHA as affiliate members in April and May: Premier Compliance Consulting, Red Stone Tax Exempt Funding LLC, and Spencer Fane LLP. If you work with a partner interested in becoming a member, please contact Phaedra Stoger.
House, Senate Pass Debt Ceiling Increase Bill
The U.S. Senate and House of Representatives this week passed legislation to suspend the debt ceiling until January 1, 2025, among other items. The legislation, on track to be signed into law by President Biden before the June 5 “X date” (after which the Treasury said it could no longer guarantee its ability to make all payments when due), is the result of several weeks of intense negotiations between the White House and House Speaker Kevin McCarthy (R-CA) and his deputies. The House passed the bill Wednesday, and the Senate approved the House-passed bill Thursday.
In addition to suspending the debt ceiling, the legislation would cap overall Fiscal Year (FY) 2024 non-defense discretionary spending, which includes much of the budgets for the U.S. Departments of Housing and Urban Development (HUD) and Agriculture (USDA), at a level slightly below FY 2023, after some creative accounting adjustments, and allow for a one percent increase above that in FY 2025. The direct impact of these spending caps on HUD and USDA programs remains to be seen, however, and will depend on how appropriators in the House and Senate ultimately divvy up among the various federal agencies the pool of funding available to them.
The legislation also claws back some unobligated funding from various Covid relief programs, including approximately $52 million from the Homeowner Assistance Fund (HAF); however, the impact of the HAF rescission is likely to be limited to a handful of jurisdictions that did not submit a HAF plan.
Finally, the legislation includes modest changes to the National Environmental Policy Act, intended to improve and streamline the environmental review process, which may have an impact on future development of affordable housing.
AHCIA Earns Wide Bipartisan Support in Three Weeks Since Introduction
The Affordable Housing Credit Improvement Act (AHCIA; S. 1557 and H.R. 3238) was introduced just three weeks ago but already has 102 cosponsors in the House and 16 in the Senate, including the bills’ leads in both chambers. Those numbers are divided evenly between Republicans and Democrats, with 51 House Republicans and 51 House Democrats and 8 Republican Senators and 8 Democratic Senators on board. Support is especially high among members of the tax-writing committees, with 37 percent of the Senate Finance Committee and 72 percent of the House Ways and Means Committee cosponsoring.
If your Congressperson or Senator is already on the bill, please reach out to thank them. If they aren’t, please urge them to do so.
The ACTION Campaign, which NCSHA co-chairs with Enterprise Community Partners, has all the information you need to make your case, including bill summaries, state and district factsheets, and more. On May 31, the campaign sent a letter to congressional leadership signed by more than 2,600 organizations, businesses, and public entities from every state in the nation urging passage of the Affordable Housing Credit Improvement Act. The letter, which was forwarded to every congressional office, urges all members of Congress to support the legislation.
FHA Releases New Plan to Help Struggling Homeowners
On May 31, the Federal Housing Administration (FHA) released a proposal to provide a new form of monthly payment assistance to homeowners facing difficulties paying their mortgages. The draft mortgagee letter, Payment Supplement Partial Claim, proposes a new loss mitigation option that would assist delinquent borrowers who are unable to obtain significant payment reduction with other available loss mitigation options. It proposes to allow mortgagees to use available partial claim funds to cure arrearages on an FHA-insured mortgage and temporarily reduce the principal amount of the borrower’s monthly mortgage payment for three to five years.
Once the three- to five-year Payment Supplement Period ends, the borrower would resume responsibility for their full monthly mortgage payments. Borrowers would be required to repay the supplemental payments made on their behalf, secured by a subordinate mortgage, upon termination or refinance of the FHA-insured first mortgage or the sale of the property. Mortgagees would be required to evaluate eligible borrowers for the Payment Supplement Partial Claim option when the Covid-19 Recovery Modification option will not meet the target payment reduction.
Feedback on the proposal can be submitted via HUD’s Single Family Policy Drafting Table by June 30. NCSHA is likely to submit comments on behalf of all HFAs. Please email Rosemarie Sabatino by June 23 with any input for NCSHA to consider.
Thompson Defends LLPA Changes at House Committee Hearing
During a House Financial Services Committee hearing last week, Federal Housing Finance Agency (FHFA) Director Sandra L. Thompson responded to committee Republicans’ criticism of FHFA’s recently implemented pricing changes for single-family mortgages guaranteed by the government-sponsored enterprises Fannie Mae and Freddie Mac (the GSEs).
In his opening statement, Vice Chair French Hill (R-AR), who presided over the hearing, said policies Thompson has implemented at FHFA — including the pricing changes and requiring the GSEs to develop Equitable Housing Finance Plans — put the GSEs’ financial health at risk in order to carry out a political agenda. Hill’s sentiments were echoed by other committee Republicans, who also argued that the new pricing framework would unfairly punish responsible home buyers who have higher credit scores and are able to pay larger down payments by charging them higher loan-level price adjustments (LLPAs).
In her oral and written testimony, Thompson said the updated pricing framework better reflects the risks to the GSEs from various loan types and also aligns better with Fannie Mae and Freddie Mac’s capital standards. Under the new framework, she argued, home buyers with higher credit scores and higher down payments still pay considerably lower LLPAs than other home buyers. She said LLPAs were reduced for some borrowers who made smaller down payments because they have private mortgage insurance which protects the GSEs against some losses. Committee Democrats largely defended Thompson and argued that Republicans were misrepresenting a complex policy to score political points.
FHFA Requests Input on Multifamily Tenant Protections
FHFA on Tuesday issued a Request for Input (RFI) on tenant protections for residents of multifamily properties financed with loans guaranteed by either Fannie Mae or Freddie Mac. In its press release, FHFA said the RFI’s purpose is to enable the agency to collect information that highlights tenants’ experiences and stakeholders’ perspectives and to solicit ideas for improved data collection to better quantify the size and scope of the issues tenants identified. The RFI includes specific questions, including what role Fannie Mae and Freddie Mac should play in enacting tenant protections, what minimum standards should be adopted, and what steps Fannie Mae and Freddie Mac can take to ensure potential tenants who receive housing assistance do not suffer discrimination. FHFA will accept public comments until July 31.
NCSHA welcomes member input and intends to submit comments. Please email Greg Zagorski by July 17 with any feedback NCSHA should consider.
NCSHA in the News
The Hill, 5.23.23, How old federal buildings can become new paths to ending homelessness
Legislative and Regulatory Activities
- 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 23 | Comments Due to NCSHA | HUD Proposed Payment Supplement Partial Claim
- June 26 | Comments Due | FHFA Proposed Rule on Fair Lending, Fair Housing, and Equitable Housing Finance Plans
- June 30 | Comments Due | HUD Proposed Payment Supplement Partial Claim
- June 30 | Comments Due to NCSHA | Notice of Preliminary Determination on Adoption of Energy Efficiency Standards for New Construction of HUD- and USDA-Financed Housing
NCSHA, State HFA, and Industry Events
- 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
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