NCSHA Washington Report | February 16, 2024

As usual by around this time of year, most of the country’s governors have given their annual state of the state addresses, and many have submitted their budget proposals to their state legislatures for the upcoming fiscal year.

Addressing housing affordability is a priority everywhere.

For Utah Governor Cox (R), it’s the “top issue.” For Massachusetts Governor Healey (D), “It starts with housing — the biggest challenge we face.” In his “housing centric” speech, Colorado Governor Polis (D) called for “more housing that Coloradans at all income levels can rent or buy in the communities where they want to live and near job opportunities.” West Virginia Governor Justice (R) also is “looking to boost housing.”

In Tennessee, Governor Lee (R) is “proposing statewide permitting reform to accelerate building times, lower costs, and safely streamline construction.” New Mexico Governor Lujan Grisham wants “$250 million in low-interest loans to spur the private sector to build faster, and $250 million to massively expand home-buying programs like down payment assistance.” Governor Whitmer (D) has a “plan for 10,000 new homes in Michigan,” while Hawaii’s Governor Green (D) for obvious reasons “focuses on Maui, housing.”

These are just a few examples. To see them all, the National Association of State Budget Officers has a useful online tracker.

The unprecedented commitments by states across the political spectrum are a wave that shows no sign of cresting. “In 2023, legislators in 49 states, Washington, D.C., Guam, Puerto Rico and the Virgin Islands introduced more than 2,500 bills addressing housing and homelessness — nearly double the amount of the year before,” according to the National Conference of State Legislatures (NCSL).

That activity included $525 million in Wisconsin (“bold and unprecedented bipartisan investment”), $711 million in Florida (“the largest investment for housing efforts in state history”), and $1 billion in Minnesota (“the largest single investment in housing in state history”). Washington also “went big” with a $1 billion commitment, while Ohio created a new $150 million incentive program, and Maine made “historic investments.”

Again, not a complete list. And NCSL is already saying “housing and homelessness will once again be dominant topics in 2024 legislative sessions.”

Yet even with “a housing revolution brewing among state legislatures,” as analysts at the Mercatus Center at George Mason University put it, states still need reinforcements from Washington, DC. Governor Cox and Governor Polis, in their capacities as co-chairs of the National Governors Association, recently urged Congress to pass the Tax Relief for American Workers and Families Act, which expands Housing Credits and Housing Bond financing, the two most important federal tools for state housing finance.

They said: “Governors on both sides of the aisle recognize the importance of advancing American innovation and competitiveness, ensuring that residents and businesses receive the necessary resources after disasters, and providing a sustainable path to housing options that are affordable.”

Stockton Williams | Executive Director

In This Issue

• • NCSHA Comments on HUD’s Proposed Methodology Changes for Calculating Income Limits
  • Cortez Masto Introduces HOME Reauthorization Legislation
  • HUD Provides $130 Million to HFAs, Others for Family Self-Sufficiency Programs
  • Capital Magnet Fund Accepting Applications for FY24 Awards
  • HUD Asks for Input on Build America, Buy America

• FHFA Posts Revised GSE Duty-to-Serve Plan Modifications
• HUD Updates Equity Action Plan
• NCSHA in the News
• Looking Ahead

NCSHA Comments on HUD’s Proposed Methodology Changes for Calculating Income Limits
This week, NCSHA submitted comments to the U.S. Department of Housing and Urban Development (HUD) in response to proposed changes to the methodology used for calculating income limits that apply to Section 8, Housing Credit, and other affordable housing programs. In its comments, NCSHA expressed support for the proposed methodology changes and encouraged HUD to consider whether additional adjustments to income limit methodology are necessary to ensure owners of existing and future affordable housing developments do not face undue financial burden.

Cortez Masto Introduces HOME Reauthorization Legislation
Senator Catherine Cortez Masto (D-NV) recently introduced the HOME Investment Partnerships Program Reauthorization and Improvement Act (S. 3793), legislation which would reauthorize HOME for the first time in three decades as well as make a number of needed program improvements. Companion legislation (H.R. 7075) was introduced in the House by Congresswoman Joyce Beatty (D-OH). NCSHA worked closely with the bill sponsors on the development of the legislation. More information is available in NCSHA’s blog.

HUD Provides $130 Million to HFAs, Others for Family Self-Sufficiency Programs
HUD announced Wednesday it has awarded more than $128 million to 835 HFAs, public housing agencies, and Project-Based Rental Assistance owners in new and renewed Family Self-Sufficiency (FSS) Program grants. FSS helps housing agencies and owners support participating families to achieve economic independence through financial literacy programs, job training, and educational opportunities that can lead to employment and asset building.

Capital Magnet Fund Accepting Applications for FY24 Awards
On Wednesday, the U.S. Treasury Department’s Community Development Financial Institutions Fund announced it is accepting applications for more than $245 million in the FY24 round of the Capital Magnet Fund (CMF). The CMF aims to attract private capital investment in economically distressed areas by awarding funds to qualified housing organizations. The housing organizations fund activities such as capitalizing affordable housing funds, economic development funds, and loan loss reserves and providing loan guarantees. Award recipients are required to leverage private and public funds that yield a minimum ratio of 10:1. The first deadline for applicants to meet is March 14. More information about the application process and a February 27 informational webinar is available here.

HUD Asks for Input on Build America, Buy America
On February 13, HUD published a request for information (RFI) regarding implementation of the Build America, Buy America (BABA) Act. A previous RFI issued in 2022 did not provide the level of detail HUD needs on product-specific purchases, particularly in relation to domestic availability of iron, steel, construction materials, and manufactured products used in housing programs. HUD hopes to garner more information from the new RFI so it may better understand the current domestic market for these products and evaluate the potential need for short-term product waivers if such products are not available domestically. Comments are due by April 15. On February 22, HUD will host a webinar to provide an overview of the notice. Learn more about the RFI and register for the webinar here.

NCSHA previously sent a letter and submitted formal comments to both HUD and the Office of Management and Budget urging a categorical exemption from BABA for affordable housing programs.

FHFA Posts Revised GSE Duty-to-Serve Plan Modifications
The Federal Housing Finance Agency (FHFA) last week published modified Duty-to-Serve plans for Fannie Mae and Freddie Mac with changes in several of their 2023 activity goals to reflect declining market activity. Specifically, Freddie Mac’s 2023 Housing Credit equity purchase goal has been reduced by 38 percent and its loan purchase targets lowered for Section 8 and Section 515 properties and resident-owned manufactured housing communities. Fannie Mae’s modified plan reduces its 2023 loan purchase targets for manufactured housing loans titled as real property, resident-owned manufactured housing communities, and single-family shared equity loans. The modified plans are nearly identical to those FHFA sought input on in November.
NCSHA submitted comments expressing concern the revised goals cut against the purpose of the Duty-to-Serve rule to encourage Fannie Mae and Freddie Mac to play leadership roles in supporting affordable housing.

HUD Updates Equity Action Plan
On Wednesday, HUD released the 2023 update to its Equity Action Plan. HUD’s Equity Action Plan efforts include removing systemic barriers to homeownership and helping about a quarter million Black households buy homes with Federal Housing Administration mortgages, developing a final rule implementing the Fair Housing Act’s Affirmatively Furthering Fair Housing requirements, and restoring the Discriminatory Effects Rule to protect fair housing and address policies that cause systemic inequality in housing. Learn more on HUD’s website.

NCSHA in the News
Impact Alpha, 2.15.24, How ‘community-benefit bonds’ can help scale mortgage assistance programs
Yield Pro, 2.15.24, INFOGRAPHIC: More LIHTC
Personal Finance, 2.13.24, Are you eligible for a $2,500 credit from Fannie Mae or Freddie Mac? Here’s what home buyers should know
National Mortgage News, 2.12.24, Homeowner Assistance Fund’s COVID aid disbursement nearly done

Looking Ahead

Legislative and Regulatory Activities

• February 22 | HUD Webinar: Build America, Buy America Request for Information
• February 27 | Webinar: Capital Magnet Fund Application Process Webinar
• March 13 | FHFA Multifamily Property Insurance Symposium | In-Person and Virtual

NCSHA, State HFA, and Industry Events

• February 22 – 23 | National Housing and Rehabilitation Association Annual Meeting and Symposium | Palm Beach, FL
  Stockton Williams will speak at this event.
• March 4 – 6 | NCSHA’s 2024 Legislative Conference | Washington, DC
• March 6 – 8 | National Affordable Housing Management Association’s Winter Conference on Top Issues in Affordable Rental Housing | Washington, DC
  Jennifer Schwartz will speak at this event.