White House Reinstates FFB Risk-Sharing Program, Ups GSE Housing Credit Investment Cap, Announces Other Actions to Increase Affordable Housing Supply

Earlier today, the White House announced HUD, Treasury, Fannie Mae, Freddie Mac, and FHFA will take a series of actions designed to help increase the supply of affordable housing. One of the key changes the administration announced is the reinstatement of the Federal Financing Bank (FFB) initiative to support FHA-HFA multifamily Risk-Sharing Program loans. NCSHA has sought this reinstatement energetically for the last three years since the previous administration terminated the very successful initiative.

Another key policy is an increase in the limits on Fannie Mae and Freddie Mac’s Housing Credit investments, which NCSHA also has recommended. FHFA said today these limits will be increased immediately to $850 million annually from the current $500 million caps. FHFA also said, “Within this $850 million annual funding cap, any investments above $425 million in a given year are required to be in areas that have been identified by FHFA as markets that have difficulty attracting investors.”

HUD officials told NCSHA the FFB Risk-Sharing Program loan financing initiative will be reinstated on October 1 for three years with minimal changes in the program as it existed before it was terminated. There will be no dollar limit on the amount of financing FFB will be authorized to provide. HFAs will have three years to enter into commitments for FFB financing; approved deals will be able to close after the end of the three-year period. HUD will issue further guidance soon on the rollout and implementation of this program.

The three-year timeframe was established to allow the program to operate during an interim period while Congress considers the Biden Administration’s FY 2022 budget proposal to allow Ginnie Mae to securitize risk-sharing loans. During this period, HUD intends to issue requests for comments on possible changes to the risk-sharing program through official administrative rulemaking procedures.

The White House announcement also outlines forthcoming actions to focus Capital Magnet Fund awards on affordable housing production, increase financing available for manufactured home purchases, prioritize sales of foreclosed and real-estate owned properties insured by the Federal Housing Administration and guaranteed by Fannie Mae and Freddie Mac to first-time home buyers and nonprofits, and work with state and local governments to address exclusionary zoning barriers to building affordable housing.

Read NCSHA’s statement on the administration’s announcement.