NCSHA Washington Report | October 25, 2024

The home stretch of the presidential campaign has largely crowded out discussion of what the Congress, currently on recess, will have to do when it returns to Washington for a lame-duck session in less than three weeks, November 12 to be exact. Several of the key issues that will be in play have significant implications for housing in general and HFA priorities in particular.

First is government funding, which runs out December 20. The House and Senate are roughly $90 billion apart in their topline amounts for discretionary spending for the remainder of the federal fiscal year, and as Roll Call reported, “that was before the administration identified a $12 billion veterans health care shortfall.”

As things stand, the House would cut HUD’s overall budget by about three percent, slashing the HOME block grant, HUD’s main housing supply program, by 60 percent ($750 million) and reducing the number of households receiving rental vouchers by more than 240,000. The Senate would increase HUD’s budget by 10 percent overall, with a $175 million increase for HOME (14 percent more than last year) and fund all existing voucher contracts.

The House and Senate USDA appropriations bills are roughly comparable, with the Senate providing slightly more generous funding for single-family and multifamily direct loans, rental housing preservation, and a few other small programs. A big difference, though, is the Senate’s 5,000-unit expansion of the Rural Housing Service’s multifamily mortgage and rental assistance “decoupling” pilot program, compared to the House’s 1,000-unit increase.

Congress also will have to pass a disaster relief bill to help states impacted by hurricanes Helene and Milton, which House Speaker Johnson (R-LA) estimates could cost $100 billion. Some of whatever amount Congress provides will need to go to the Small Business Administration’s disaster loan program, which makes low-cost loans available to homeowners and renters to repair and replace damaged property, and which the White House says is out of money. (The North Carolina state budget office estimates Helene inflicted $12.2 billion in damage on 126,000 homes.)

There may also be an opportunity to include additional Housing Credit authority in a disaster relief bill, which could come in the form of special credits for the impacted states or, less likely, an increase for every state, building off the legislation that passed the House with a huge bipartisan majority earlier this year.

Looming over every decision of course will be the election results, which political and business analyst Bruce Mehlman observes could manifest in “possibly concurrent, competing Presidential transition operations … and the possibility that House & Senate outcomes hang in the balance of too-close-to-call races, putting nerves that much more on edge as we face the possibility of a Triple flip.”

Members of Congress want to conclude their lame-duck session — which in addition to the issues mentioned may include defense reauthorization, the farm bill, and other items — by December 20, when stopgap funding for the federal government expires. But don’t count on it. Five of the last six congressional sessions ended January 3, “hours before the new Congress was scheduled to convene by law.” The sixth adjourned January 2.

Stockton Williams | Executive Director

In This Issue

• Indy, San Francisco FHLBs Celebrate New HFA Partnerships
• Treasury CDFI Fund Provides Capital Magnet Fund Awards to HFAs, Others
• IRS Announces Higher 2025 Housing Credit, PAB Cap Amounts
• FHFA Proposes New Criteria for FHLB Independent Directors
• Vera Institute Offers HFAs No-Cost Technical Assistance on Re-Entry Policies
• NCSHA in the News
• Looking Ahead

Indy, San Francisco FHLBs Celebrate New HFA Partnerships
Two Federal Home Loan Banks (FHLBs) Tuesday announced new housing partnerships with state housing finance agencies. FHLB Indianapolis is partnering with the Michigan State Housing Development Authority (MSHDA) to launch the MSHDA Rate Relief Mortgage Program. The program will allow low-income home buyers purchasing a home through a MSHDA program to reduce the interest rate on their mortgage by up to one percent if the loan is financed by a FHLB Indianapolis member. FHLB Indianapolis is financing the initiative by purchasing a $50 million MSHDA bond.

That same day, FHLB San Francisco announced changes to its collateral and credit risk policies to make it easier for HFAs and community development financial institutions to access Bank financing. Specifically, FHLB San Francisco increased its borrowing limit for HFA programs from $250 million to $500 million, reduced the prepayment risk weighting for collateral posted by HFAs, and increased credit term availability from five years to up to 20 years on collateral, including Housing Credit properties.

Treasury CDFI Fund Provides Capital Magnet Fund Awards to HFAs, Others
On Wednesday, the U.S. Department of the Treasury’s Community Development Financial Institutions Fund announced the 48 organizations — including four state HFAs — selected to receive award funding through the FY 2024 round of the Capital Magnet Fund. Recipients will use the $246.4 million in award funding — including a total of $20 million for the Colorado Housing and Finance Authority, Connecticut Housing Finance Authority, MassHousing, and Vermont Housing Finance Agency — to create 26,400 affordable housing units, including 25,600 rental units and more than 750 homeownership units. Award recipients anticipate leveraging more than $6.8 billion in private investment to support the development of these affordable housing units as well as related economic development facilities, including day care centers, workforce development centers, and health care clinics. See the list of award recipients.

IRS Announces Higher 2025 Housing Credit, PAB Cap Amounts
The Internal Revenue Service (IRS) announced that, in 2025, the amount used to determine the Low-Income Housing Tax Credit ceiling will increase to $3 per state resident, a 10-cent rise from this year. The state minimum also will rise to $3,455,000 from $3,360,000. For private activity bonds, the state ceiling will be calculated as the greater of $130 per capita or $388,780,000, up from $125 per capita and $378,230,000. These volume caps were reported in Revenue Procedure 2024-40.

FHFA Proposes New Criteria for FHLB Independent Directors
The Federal Housing Finance Agency (FHFA) on Monday published a proposed rule updating and clarifying requirements for Federal Home Loan Bank boards of directors and executives. The rule, which FHFA is issuing as part of its comprehensive review of the FHLB system, is intended to ensure FHLB leadership has the skills and experience needed to navigate the housing finance market and represent the public interest. Among other provisions, the proposed rule would amend the areas of expertise FHLBs must consider when appointing independent directors by adding artificial intelligence, CDFI business models, climate risk, information technology and security, and modeling; clarify that public interest directors must have direct and substantial experience working directly on behalf of consumers or communities; and adopt conflict of interest policies preventing FHLB executives from holding paid positions with FHLB members.

FHFA will hold a webinar on the proposed rule on Wednesday, October 30. The deadline to comment will be 90 days after the proposed rule is published in the Federal Register, which will be soon. Please email any feedback to Greg Zagorski by December 13 to inform NCSHA’s comments.

Vera Institute Offers HFAs No-Cost Technical Assistance on Re-Entry Policies
The Vera Institute, a national nonprofit focused on reducing incarceration, is offering no-cost technical assistance through its “Opening Doors Initiative” for HFAs to help design policies and programs that expand access to housing for people with a history of involvement with the criminal legal system. Applications from interested HFAs are due December 1. Learn more about the opportunity and how to submit an application

NCSHA in the News
Bluefield Daily Telegraph, 10.21.24, Federal Home Loan Bank of Atlanta Announces 2024 Director Election Results

Looking Ahead

Legislative and Regulatory Activities

• October 28 | Comments Due | Fannie Mae and Freddie Mac Affordable Housing Goals, 2025 – 2027
• October 30 | Comments Due via HUD Drafting Table | FHA’s Revised Cyber Incident Reporting Requirements
• October 30, 2:00 pm ET | FHFA Webinar: Proposed Rule on FHLB Governance
• November 1 | Comments Due to NCSHA | HUD Multifamily Asset Management and Project Servicing Handbook
• November 18 | Comments Due | HUD Multifamily Asset Management and Project Servicing Handbook

NCSHA, State HFA, and Industry Events

• November 13 | Maine Affordable Housing Coalition: 2024 Housing Policy Conference | Portland, ME
  Jennifer Schwartz will speak at this event.
• November 14 | Vermont Statewide Housing Conference | Burlington, VT
  Stockton Williams will speak at this event.
• November 15 | Women’s Affordable Housing Network Quarterly Policy Update | Virtual
  Jennifer Schwartz will speak at this event.
• November 21 – 22 | NAHB Mortgage Roundtable | New York, NY
  Stockton Williams will participate in this event.
• December 4 | National Housing Conference’s Solutions for Affordable Housing Conference | Washington, DC, and Virtual
  Stockton Williams will speak at this event.
• January 12 – 17 | NCSHA’s HFA Institute 2025 | Washington, DC