NCSHA Washington Report | November 22, 2024
Congress began work in earnest this week on legislation to provide federal relief to states that have experienced major disasters over the past few years.
On Monday, President Biden sent House Speaker Johnson (R-LA) the administration’s $99 billion request for funding through several federal agencies to help areas impacted recently by Hurricanes Helene and Milton “and every other disaster since the Congress last passed a comprehensive disaster package in 2022.” The administration’s request includes $40 billion for FEMA, $12 billion for the HUD-administered CDBG – Disaster Recovery Program, and $2 billion in lending capacity for the Small Business Administration to support housing and business repairs.
At a Senate Appropriations Committee hearing Wednesday, Senators in both parties indicated their support for the White House’s request, with committee chair Murray (D-WA) suggesting the Senate may increase the overall amount. House hearings have not happened yet, but some Republican members have suggested the administration’s ask is too large for their liking.
We’re encouraging members of the congressional tax writing committees to play a role as well, through targeted expansions of Housing Credits and Housing Bonds. Affordable housing tax relief has become something of a staple of federal disaster response.
In 2020, Congress approved $1.25 billion of additional Housing Credit authority for 11 states and Puerto Rico after various non-Covid disasters. In 2019, $1 billion in authority was provided to aid California’s recovery from wildfires during the two years prior.
In 2008, Congress authorized wide-ranging tax incentives to help 10 states rebuild in areas affected by disasters that year. The relief included $2 billion in additional Housing Credits and $1.3 billion in supplemental “private activity” tax-exempt bond authority for acquisition, construction, and renovation of affordable apartments, commercial property, and public utility improvements. The 2008 bill also provided additional disaster credit and bond authority to Texas and Louisiana in response to Hurricane Ike.
NCSHA estimates the states that have suffered recent disasters could receive as much as $4.5 billion in supplemental Housing Credit authority, if Congress were to use a similar methodology for determining an additional amount as it has in the past.
A 2022 MIT study underscored the importance of the Housing Credit in this context, concluding, “With the existing statutory framework for temporary disaster housing assistance failing to meet renters’ long-term needs, states have turned to the LIHTC program to supplement funding for the construction of multi-family rental housing after disaster and to catalyze disaster recovery.”
The latest round of disasters also hammered low-income homeowners. For instance, in North Carolina, the $12 billion in estimated damage to 126,000 homes from Helene mostly affects single-family homes, manufactured housing, and duplexes, according to a comprehensive assessment from the state budget office. In addition to authorizing more Mortgage Revenue Bond authority, Congress should increase the limit on MRB-financed low-cost home improvement loans, as Senators Cortez Masto (D-NV) and Cassidy (R-LA) have proposed.
Republicans and Democrats typically come together in disaster recovery efforts. Programs with bipartisan support, like Housing Credits and Housing Bonds, make sense to include.
Stockton Williams | Executive Director
Washington Report will return December 6.
In This Issue
- NCSHA Welcomes New Members
- Biden – Harris Administration Submits Disaster Relief Proposal to Congress
- IRS Announces National Pool Allocations
- FHA Annual Report Highlights Lending to Underserved Borrowers, Low Delinquency, Capital Adequacy
- FHFA Increases Multifamily Loan Purchase Caps for Fannie Mae, Freddie Mac
- HUD Announces Final Round of GRRP Funding
- Banking Regulators to Pause Bank Capital Standards, Other Regulations Until New Administration Takes Office
- Climate United Launches $30 Million Program for Clean Energy Projects in Underserved and Low-Income Communities
- HUD Offers Webinars on New Energy Standards Applicable to HUD Housing Programs
- Looking Ahead
NCSHA Welcomes New Members
NCSHA has welcomed these organizations as Affiliate members in November: Halliday, Watkins & Mann, P.C., and ROC USA, LLC. If you work with a partner interested in becoming a member, please contact Phaedra Stoger.
Biden – Harris Administration Submits Disaster Relief Proposal to Congress
On Wednesday, the Senate Appropriations Committee held a hearing to consider a request from the Biden – Harris Administration for upwards of $100 billion in supplemental funding to help respond not only to the recent hurricanes in the Southeastern United States but also to declared disasters around the country dating back several years, since the last disaster supplemental funding legislation was enacted. Testifying at the hearing were Senators Thom Tillis (R-NC) and Jon Ossoff (D-GA), as well as high-ranking officials from several federal agencies that play a role in disaster recovery, including HUD Acting Secretary Adrianne Todman, who highlighted the role of the CDBG – Disaster Recovery Program in helping affected communities rebuild.
The hearing and disaster supplemental request come as Congress faces a deadline to extend funding for regular government operations on December 20, when the current continuing resolution (CR) for Fiscal Year 2025 (FY25) expires. As it appears unlikely Congress will have the time or political will to enact both disaster relief and full appropriations legislation between now and the end of the year, the expectation is that the current CR will be extended into the new year, perhaps until February or March, with some further speculation that FY25 ultimately could end up covered by a full year CR. This would be an unfortunate outcome for many federal housing programs, however, especially rental assistance programs, as it would effectively represent a cut in real-dollar terms, as operating costs for affordable housing continue to increase.
IRS Announces National Pool Allocations
The Internal Revenue Service has announced that $3.8 million in unused federal Low-Income Housing Tax Credits will be distributed as carryover to 29 states. Revenue Procedure 2024-41 details the allocations for 2024, which range from $9,604 for Vermont to $577,985 for California. By comparison, last year’s national pool totaled $11.4 million, distributed in two phases, October 2023 and April 2024.
FHA Annual Report Highlights Lending to Underserved Borrowers, Low Delinquency, Capital Adequacy
The Federal Housing Administration (FHA) last week released its 2024 Annual Report to Congress. The report finds 79 percent of the home purchase mortgages FHA endorsed in FY24 went to first-time home buyers, compared to 50 percent for the market as a whole. FHA served 2.5 times as many Black borrowers by share of its total forward mortgage insurance endorsements than the rest of the market and two times as many Hispanic borrowers. FHA’s seriously delinquent rate (loans 90 or more days past due) at the end of FY24 was 4.15 percent, an increase from 3.93 percent at the end of FY23 but still well below the peak of 11.9 percent during the Covid pandemic. The capital ratio for FHA’s Mutual Mortgage Insurance Fund, which covers FHA’s single-family forward and reverse mortgage programs, increased from 10.5 to 11.5 percent, nearly six times its statutory minimum. More information is available in NCSHA’s blog.
FHFA Increases Multifamily Loan Purchase Caps for Fannie Mae, Freddie Mac
The Federal Housing Finance Agency (FHFA) announced Monday it is increasing the multifamily housing loan purchase caps for the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac from $70 billion in 2024 to $73 billion in 2025. FHFA is increasing the caps based on its market projections and to allow the GSEs to better address the shortage of affordable rental housing. As it has since 2020, FHFA also will require each GSE to devote at least half of its multifamily business in 2025 to affordable housing or other mission-driven activities. This appendix lists the various activities that count as mission driven, which once again include loans on properties financed by the Housing Credit. In addition, loans that preserve affordability of workforce housing and properties subject to rent or income restrictions will not count toward the GSEs’ 2025 lending caps. FHFA released a fact sheet summarizing the new caps in more detail.
HUD Announces Final Round of GRRP Funding
On Tuesday, the U.S. Department of Housing and Urban Development (HUD) announced the final round of awards under its Green and Resilient Retrofit Program, which to date has provided more than $1.4 billion in funding for energy-efficient rehabilitation of HUD-assisted multifamily properties. The most recent and final round of funding represents approximately $30 million in awards to 45 properties in 23 states, including properties that receive assistance through project-based rental assistance, the Section 202 program for low-income seniors, and the Section 811 program for people with disabilities. Read the full announcement and list of properties receiving funding here.
Banking Regulators to Pause Bank Capital Standards, Other Regulations Until New Administration Takes Office
Federal banking regulators, testifying during the House Financial Services Committee hearing Wednesday, said their agencies would not finalize any major rules before President-Elect Donald Trump takes office. This includes a proposed rule to increase capital standards for large banks that all three agencies — the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) — have been striving to finalize for some time. In our comments on the proposed rule, NCSHA expressed strong opposition to provisions that would increase risk-weighting for higher loan-to-value (LTV) ratio single-family mortgages. Federal Reserve Board Vice Chair for Supervision Michael Barr previously announced he would recommend the board consider modifying the proposed rule, including the suggested risk-weighting for high-LTV loans. President Trump likely will be able to appoint a new FDIC chair and a new Comptroller of the Currency soon after taking office, as current FDIC Chair Martin Gruenberg has said he will resign before Trump’s inauguration and the OCC currently is led by an acting head.
Climate United Launches $30 Million Program for Clean Energy Projects in Underserved and Low-Income Communities
Climate United, one of three funding recipients from the Environmental Protection Agency’s National Clean Investment Fund, recently announced the availability of up to $30 million for pre-development grant funding awards of up to $300,000 each for technical assistance and planning for community-led projects to increase energy efficiency, enhance resilience, and reduce greenhouse gas emissions. The first round of awards, applications for which are due January 10, 2025, will target clean energy projects in Native communities. Nonprofit organizations, state and local government entities, tribal organizations, and higher education institutions are encouraged to apply. Learn more here.
HUD Offers Webinars on New Energy Standards Applicable to HUD Housing Programs
Under new minimum energy standards from HUD and the U.S. Department of Agriculture, starting November 28, 2024, new housing units using funds from the HOME Investment Partnerships and Housing Trust Fund programs must adhere to new building standards for energy efficiency. To help grantees, developers, builders, and other stakeholders understand these new requirements, HUD has scheduled a series of webinars, including a December 3 introduction to the 2021 International Energy Conservation Code and a December 9 introduction to the 2019 American Society of Heating, Refrigerating, and Air-Conditioning Engineers standard. Learn more about these building standards and register for the webinars here.
Legislative and Regulatory Activities
- December 3, 2:00 – 3:30 pm ET | HUD Energy Code Webinar Series: An Introduction to the 2021 IECC
- December 9, 2:00 – 3:30 pm ET | HUD Energy Code Webinar Series: An Introduction to ASHRAE 90.1-2019
- December 20 | Comments Due to NCSHA | USDA Proposed Rule to Preserve Affordability of Section 538 Multifamily Properties
- January 6 | Comments Due | USDA Proposed Rule to Preserve Affordability of Section 538 Multifamily Properties
- January 22 | Comments Due to NCSHA | FHFA Proposed Rule on FHLB Governance
- February 3 | Comments Due | FHFA Proposed Rule on FHLB Governance
NCSHA, State HFA, and Industry Events
- December 2 | Women’s Affordable Housing Network Quarterly Policy Update | Virtual
Jennifer Schwartz will speak at this event. - December 4 | National Housing Conference’s Solutions for Affordable Housing Conference | Washington, DC, and Virtual
Stockton Williams will speak at this event. - December 5 – 6 | Novogradac 2024 Housing Tax Credit Finance Conference | Las Vegas, NV
Jennifer Schwartz will speak at this event. - December 5 – 6 I National Governors Association 2024 Governors’ Housing Policy Advisors Institute Convening I Chantilly, VA
Stockton Williams will speak at this event - December 6 | Early-Bird Registration Deadline | NCSHA’s HFA Institute 2025
- January 12 – 17 | NCSHA’s HFA Institute 2025 | Washington, DC
