NCSHA Joins Letter to FHFA Urging GSE Policies to Mitigate Qualified Contract Losses
On July 13, 2023, NCSHA joined 14 other Housing Credit stakeholder organizations on a letter to Federal Housing Finance Agency (FHFA) Director Sandra Thompson urging FHFA to adopt policies prohibiting the government sponsored entities — Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBs) — from providing financing to Housing Credit properties for which the owner has not and will not waive its qualified contract rights. Specifically, the letter recommends that FHFA prohibit the GSEs from investing in and/or acquiring loans on properties in which the owner has not agreed to a qualified contract waiver and bar the GSEs from acquiring loans on properties originally financed with the Credit where the owner has already taken the property through the qualified contract process to prematurely terminate the development’s affordability requirements. The letter also asks FHFA to prohibit the FHLBs from providing Affordable Housing Program funds to Housing Credit properties unless the owner agrees to a qualified contract waiver. NCSHA’s annual survey of state HFAs found that, as of the end of 2021, more than 100,000 units nationwide had been lost to the affordable housing stock due to owners using the qualified contract loophole to convert their properties to market rate prior to the end of the affordability period outlined in those projects’ extended use agreements, with approximately 10,000 units lost each year.
