NCSHA Washington Report | August 11, 2023
The latest data on homeowner distress is heartening overall: As of June, the national number of seriously delinquent mortgages stood at a 15-year low, and foreclosures were 38 percent below their pre-Covid level, according to Black Knight.
The monthly snapshot accords with the latest two-year picture of the remarkably successful effort by policymakers, mortgage servicers, state HFAs, and housing counselors to support economically vulnerable owners during the pandemic and a period of high inflation.
The Philadelphia Federal Reserve Bank in March reported that more than 95 percent of the 8.5 million borrowers who entered special Covid mortgage forbearance programs had exited them as of the end of last year. “Forbearances have dwindled to levels consistent with pre-pandemic levels for portfolio lenders and the government-sponsored enterprises, Fannie Mae and Freddie Mac,” wrote bank analysts. They credit the private sector’s participation in the CARES Act Mortgage Forbearance program and “subsequent servicer workout programs providing longer-term help” for much of the success.
The state-administered Homeowner Assistance Fund has helped as well, assisting more than 318,000 homeowners with mortgage, utility, and other payments, totaling more than $3.7 billion through the end of March, including $1.2 billion in the first quarter of the year alone, the Treasury Department announced last month. Treasury reported that 49 percent of fund assistance had reached very low-income households, and 58 percent of recipients identified as either Black or Hispanic/Latino. The agency highlighted efforts by agencies in Indiana, Louisiana, Minnesota, New York, and Puerto Rico.
The Federal Housing Administration has also played a key role, helping upwards of two million at-risk borrowers avoid foreclosure. Earlier this year, the agency extended several of its Covid-relief options as FHA Commissioner Julia Gordon committed to “capitalize on what we have learned through the pandemic to continue helping borrowers avoid foreclosure, regardless of the nature of their hardship.”
Then, in May, FHA proposed a new loss mitigation option: the Payment Supplement Partial Claim. The approach aims to lower borrowers’ monthly payments by meaningful amounts in a higher-rate environment while avoiding the requirement that would otherwise fall on servicers to buy modified loans out of Ginnie Mae securitized pools at the full value of their unpaid principal balances.
The Urban Institute’s Laurie Goodman and Ted Tozer commended FHA for its “ingenious solution” but warned of “a prohibitive administrative burden” on servicers, which they made several recommendations to relieve. Major bank and servicing trade associations made similar points, recommending a simpler, more standardized process with more time for servicers to implement it. NCSHA commented on similar lines and emphasized the importance of engaging housing counselors during the new loss mitigation process.
Optimizing the design of FHA’s creative new resource is an important opportunity. There will always be borrowers who need additional assistance, and the current overall positive picture doesn’t change that reality.
Stockton Williams | Executive Director
State HFA Emergency Housing Assistance
In This Issue
- Zucker Named to Bond Buyer Hall of Fame
- GAO Releases Report on Housing Trust Fund
- Labor Department Announces Final Rule Amending Davis-Bacon Act Regulations
- EPA Proposes Lead-Based Paint Rule for Federally Assisted Housing
- DOT Announces $13.4 Million for TOD Planning
- HUD Publishes 2021 Tenant Data for Housing Credit Residents
- NCSHA in the News
- Looking Ahead
Zucker Named to Bond Buyer Hall of Fame
Howard Zucker, managing partner of NCSHA affiliate member firm Hawkins Delafield & Wood LLP, has been named to The Bond Buyer’s Hall of Fame of municipal finance, which “recognizes and celebrates groundbreaking individuals who have left an indelible legacy on the muni community and the people and places it represents.” With 46 years as a public finance attorney specializing in housing, Zucker is in charge of his firm’s representation of several state HFAs, and he is a frequent speaker at NCSHA events. Among the many leadership roles in his career, Zucker was the first chair of the Bond Finance Practice Division of the American Bar Association’s Forum of Affordable Housing and Community Development Law, and he is the co-author of the ABCs of Housing Bonds, first published in 1985 and now in its fifth edition. Zucker and his fellow honorees will be recognized on September 13 during The Bond Buyer’s INFRASTRUCTURE event in Chicago. Congratulations, Howard!
GAO Releases Report on Housing Trust Fund
On August 8, the U.S. Government Accountability Office (GAO) released a report on “Affordable Housing: Improvements Needed in HUD’s Oversight of the Housing Trust Fund Program.” Among other issues, GAO found the U.S. Department of Housing and Urban Development had not adequately monitored grantee compliance with requirements for reporting project completion dates and had not properly communicated to grantees the requirement they submit cost certifications for completed HTF projects. You can read more about the GAO report in NCSHA’s blog post.
Labor Department Announces Final Rule Amending Davis-Bacon Act Regulations
The U.S. Department of Labor (DOL) announced Tuesday it would issue a final rule updating regulations implementing the Davis-Bacon Act, which requires companies receiving federal funds for construction of some buildings to pay locally prevailing wages and benefits as determined by DOL. NCSHA submitted comments on the proposed rule, published in March 2022, urging DOL to reduce the complexity, time, and cost of compliance with the regulations. The first comprehensive rewrite of the regulations in 40 years, the final rule gives DOL authority to adopt prevailing wages determined by state and local governments, issue wage determinations for labor classifications where insufficient data was received through the wage survey process, and update outdated wage rates. The rule also adds anti-retaliation provisions and strengthens DOL’s ability to withhold money from federal contractors to pay employees lost wages. The final rule will be effective 60 days after publication in the Federal Register, which we expect soon.
EPA Proposes Lead-Based Paint Rule for Federally Assisted Housing
On August 1, the Environmental Protection Agency (EPA) published a proposed rule to significantly lower acceptable levels of lead-based paint (LBP) and make abatement protocols much more stringent for federally assisted properties built before 1978 that undergo renovation. Responding to a 2021 decision by the U.S. Court of Appeals for the Ninth Circuit, which held that EPA must exclusively consider health factors in establishing dust-lead hazard standards (DLHS) in residential dwellings, the proposed rule would lower the DLHS essentially to zero, which would potentially categorize many more properties as containing unsafe levels of lead. While the change in the DLHS standard in and of itself would not necessarily require property owners to take any action, in the event of rehabilitation of a covered property, the proposed rule would hold property owners, contractors, and others involved in the rehabilitation process to a much higher standard to satisfy EPA’s requirements for full abatement of LBP hazards. The rule as proposed would apply to most HUD-assisted housing units built before 1978, including properties with project-based or tenant-based rental assistance or FHA multifamily mortgage insurance. The proposed rule is open for public comment through October 2. Please send any feedback on the proposed rule to Robert Henson by September 22 to inform NCSHA’s comments.
DOT Announces $13.4 Million for TOD Planning
On Monday, the Department of Transportation announced the availability of $13.4 million in grant funding for transit-oriented development (TOD) through the Federal Transit Administration (FTA). TOD is designed to link public transportation, land use, and housing to create communities that are walkable and connected to transit, reduce carbon footprints, and improve access to services and job opportunities. FTA’s TOD program has provided $104 million in grants since 2015. This round of funding will give priority to applicants developing mixed-use projects near transit stations that promote affordable housing. FTA is accepting applications through October 10 and hosting an August 17 webinar on the funding opportunity. To apply, an applicant must be an existing FTA grant recipient – either a project sponsor of an eligible transit project or an entity with land use planning authority in the project corridor. To ensure work meets the needs of the local community, transit project sponsors and land use planning authorities must partner to conduct the planning work.
HUD Publishes 2021 Tenant Data for Housing Credit Residents
This week, HUD’s Office of Policy Development and Research published demographic data on tenants living in Housing Credit properties in 2021. This data, collected annually from state Housing Credit allocating agencies as required by the Housing and Economic Recovery Act of 2008, includes details on tenant race, ethnicity, family composition, age, income, use of rental assistance, disability status, and monthly rent burden. For more information, see our blog.
NCSHA in the News
Reno Gazette Journal, 8.8.23, Cortez Masto’s affordable housing bill will help Nevadans realize American Dream
Legislative and Regulatory Activities
- August 14 | Comments Due | HUD Request for Comment on Improving Access to Public Benefit Programs
- September 29 | Comments Due | Council on Environmental Quality Proposed Rule on National Environmental Policy Act Implementing Regulations Revisions Phase 2
- September 29 | Comments Due | HUD Proposed Rule on Modernization of Engagement with Mortgagors in Default
NCSHA, State HFA, and Industry Events
- August 21 – 23 | U.S. Bank 2023 HFA Symposium | St. Louis, MO
Rosemarie Sabatino and Greg Zagorski will participate in this event. - September 6 – 8 | Housing Iowa Conference | Cedar Rapids, IA
Stockton Williams is speaking at this event. - September 18 | Discounted Early Registration Deadline | NCSHA’s 2023 Annual Conference & Showplace | Boston
- September 24 – 26 | Louisiana Housing Conference | Baton Rouge, LA
Stockton Williams is speaking at this event.
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