NCSHA Washington Report | April 7, 2023
Even those of us who don’t object in principle to the tax system serving as both an instrument of social policy and a mechanism for revenue collection can be amazed by just how much of the former is embedded in our beloved federal internal revenue code.
And many of us who wholeheartedly support the practice of targeted tax policy to increase affordable home purchase and apartment rental opportunities for lower-income households may be surprised by how relatively little the code generates for it, compared to many other activities and in light of demonstrable need.
The annual tax-filing season report from the Peter G. Peterson Foundation helps illustrate both points. While the tax code contains more than 215 “exemptions, deductions, credits, and preferential rates,” representing an annual amount of forgone revenue exceeding $1.7 trillion — more than the government spends on Social Security, defense, or Medicare — just eight of those “tax expenditures” account for two-thirds of that federal cost, the foundation reports.
Of those, only two — the Earned Income Tax Credit and Child Tax Credit — deliver significant tax relief to lower-income Americans. The rest overwhelmingly benefit the highest income households.
The Treasury Department’s annual accounting of tax code incentives identifies 12 for housing, of which only three are low-income focused: the Housing Credit and single-family and multifamily Housing Bonds. Their combined cost is less than one percent of total annual federal tax expenditures.
The tax break that used to dominate housing policy discussions is the home mortgage interest deduction. For decades, the deduction was widely considered the “most sacred tax break in the code,” the “third rail of tax reform,” a member of the “Holy Trinity of U.S. social programs,” and “an American birthright” so “sacrosanct” that the “mere thought of tampering with it was unpatriotic,” according to a 2009 review by legal scholar Dennis Ventry.
Times have changed. As a result of the 2017 tax cuts, only about 27 percent of homeowners with a mortgage claim the deduction and only a quarter of them earned less than $100,000 in 2018, according to the National Association of Home Builders. The builders have proposed replacing the deduction with a more income-targeted tax credit to offset mortgage interest.
The National Association of Realtors’ 2023 Legislative Priorities don’t mention the deduction, but call on Congress to increase the amount of capital gains homeowners can exclude on the sale of their home, which would “remove the disincentive for current homeowners to sell, unlocking a segment of inventory previously unavailable to prospective buyers.” The Realtors also support the proposed Neighborhood Homes Investment Act, as does NCSHA.
We are also working with senior Democratic and Republican members of the Finance Committee to develop legislation that would expand the reach of Mortgage Revenue Bonds and Mortgage Credit Certificates. This bill, the Neighborhood Homes credit bill, and the forthcoming Affordable Housing Credit Improvement Act — which would expand the Housing Credit — are NCSHA’s tax policy priorities.
Stockton Williams | Executive Director
Stockton Williams | Executive Director
State HFA Emergency Housing Assistance
In This Issue
- Dewey Recognized as National Housing Visionary
- Kornegay Among AHF’s Inspiring Women in Affordable Housing
- NCSHA Welcomes New Members
- IRS Issues 2023 Population Figures for Housing Credit, Private Activity Bond Volume Caps
- HUD Awards $2.8 Billion for FY22 Continuum of Care Programs
- FHFA Announces Enhanced Payment Deferral Policies for Borrowers Facing Financial Hardship
- HUD Extends AFFH Comment Deadline
- Fannie and Freddie Update Equitable Housing Plans
- HUD Requests Comments on NSPIRE Scoring and Ranking Methodology
- DOE Issues RFI Seeking Input on IRA Funding Opportunity
- NCSHA in the News
- Looking Ahead
Dewey Recognized as National Housing Visionary
Longtime Virgina Housing CEO Susan Dewey has been announced as an honoree of the National Housing Conference’s Housing Visionary Awards, which will be presented during a June 20 gala in Washington, DC. The NHC announcement cites Susan as “a key leader in efforts to reach first-time home buyers in communities not well served by conventional mortgage marketing efforts.” Susan previously served as Virginia State Treasurer and is a past president of NCSHA.
Kornegay Among AHF’s Inspiring Women in Affordable Housing
Affordable Housing Finance featured MassHousing Executive Director and NCSHA Board Director Chrystal Kornegay as one of 10 leaders “making big waves” in the affordable housing industry this year. Chrystal shares the spotlight with affordable housing champions including HUD Secretary Marcia L. Fudge, Congresswoman Suzan DelBene, Amazon Housing Equity Fund’s Catherine Buell, and National Multifamily Housing Council President Sharon Wilson Géno. Read the article.
NCSHA Welcomes New Members
These organizations joined NCSHA as affiliate members in March: City & County of Honolulu, FPI Management, Indelible Solutions, and Poverty & Race Research Action Council. If you work with a partner interested in becoming a member, please contact Phaedra Stoger.
IRS Issues 2023 Population Figures for Housing Credit, Private Activity Bond Volume Caps
On March 20, the Internal Revenue Service (IRS) issued Notice 2023-22 providing the resident population figures needed to determine the 2023 private activity bond (PAB) volume cap and the population-based component of the Housing Credit ceiling. Last October, IRS issued Revenue Procedure 2022-38, which establishes the PAB volume cap at the greater of $120 per capita or $358,845,000 and the population component of the Housing Credit ceiling at the greater of $2.75 per capita or $3,185,000.
HUD Awards $2.8 Billion for FY22 Continuum of Care Programs
On March 28, the Department of Housing and Urban Development (HUD) announced $2.8 billion in awards for homeless services and housing programs through the Continuum of Care (CoC) program, including a number of awards made to state HFAs. The CoC program is the largest source of federal grant funding for services and housing programs serving people experiencing homelessness and provides grants to nonprofit providers, states, tribes or tribally designated housing entities, and local governments. These awards represent part of the administration’s strategic plan to prevent and end homelessness, announced in December 2022.
FHFA Announces Enhanced Payment Deferral Policies for Borrowers Facing Financial Hardship
On March 29, the Federal Housing Finance Agency (FHFA) announced Fannie Mae and Freddie Mac will enhance their payment deferral policies to allow borrowers facing eligible financial hardships to defer up to six months of mortgage payments. Servicers will be able to offer borrowers several standard solutions to resolve delinquencies, including the enhanced payment deferral, reinstatement, repayment plan, or loan modification, depending on a borrower’s situation. Mortgage servicers may voluntarily adopt the enhanced payment deferral policy as of July 1, but adoption is mandatory by October 1. Fannie Mae issued Lender Letter 2023-04 and Freddie Mac issued Bulletin 2023-8 to implement these changes.
HUD Extends AFFH Comment Deadline
HUD extended to April 24 the comment deadline for the Affirmatively Furthering Fair Housing proposed rule, originally set for April 10. NCSHA appreciates the input HFAs have provided to inform our comment letter on the proposed rule. If you have further input for NCSHA to consider, contact Jennifer Schwartz as soon as possible and no later than April 14.
Fannie and Freddie Update Equitable Housing Plans
FHFA on Wednesday announced Fannie Mae and Freddie Mac have updated their Equitable Housing Finance Plans for 2022 – 24 with new goals for 2023. The plans, which were originally published in June 2022, describe initiatives each firm will undertake to increase equitable access to affordable housing options. Fannie Mae’s updated plan includes the creation of the Latino Housing Journey, a data-based initiative to address barriers Latinos face in the housing market (it is based on Fannie Mae’s Black Housing Journey, which focuses on the experiences of African Americans in the housing market). Additionally, both firms’ modified plans include increased efforts to ensure equal access to loss mitigation options, support for financial counseling, financing locally owned modular construction facilities in communities of color, and increasing the reach of their Special Purpose Credit Programs. Fannie Mae and Freddie Mac also released performance reports Wednesday that outline their progress so far under their Equitable Housing Finance Plans. Get more information on Fannie Mae’s plan and Freddie Mac’s plan.
HUD Requests Comments on NSPIRE Scoring and Ranking Methodology
HUD has published a formal request for comments on its proposed scoring notice for use in implementing the National Standards for the Physical Inspection of Real Estate (NSPIRE) rule. The request for comments outlines the NSPIRE inspection standards and scoring methodology HUD is proposing in connection with the NSPIRE proposed rule HUD published last June. HUD expects to publish the NSPIRE final rule early this year and will publish the final scoring notice after the NSPIRE final rule but before its Real Estate Assessment Center (REAC) will commence inspections for scores of record for multifamily programs, or scores to be included in a Public Housing Assessment System score for public housing. HUD also will publish an NSPIRE administrative notice after the final rule’s publication to provide additional implementation guidance.
NSPIRE is intended to align formally the expectations of housing quality and to consolidate the inspection standards across HUD programs, replacing Housing Quality Standards, which apply to the Housing Choice Voucher and Project-Based Voucher programs, and the Uniform Physical Condition Standards, which apply to public housing and properties managed by HUD’s Office of Multifamily Housing Programs. The scoring notice, once finalized, will apply to all HUD housing currently inspected by REAC. Comments on the scoring notice are due to HUD on April 27. If you would like NCSHA to provide comments on the scoring notice, contact Jennifer Schwartz with your input by April 18.
DOE Issues RFI Seeking Input on IRA Funding Opportunity
The Department of Energy (DOE) has issued a request for information (RFI) seeking public input on the design of a future funding opportunity to support the development, adoption, and implementation of model building energy codes for residential and commercial buildings throughout the United States, pursuant to the Inflation Reduction Act (IRA). The IRA appropriated $1 billion to support the implementation of model energy codes and zero energy building codes by state and local governments, in addition to $225 million appropriated for similar purposes through the Bipartisan Infrastructure Law. The deadline to respond to the RFI is April 26. DOE has scheduled a webinar for April 18 about the RFI and associated activities.
NCSHA in the News
Urban Land, 3.30.23, Refreshing Multifamily Benchmark Data: Fannie Mae Survey Will Update U.S. Energy Star Portfolio Manager Multifamily Energy and Water Scores
HUD Blog, 3.28.23, States Use American Rescue Plan Funds to Increase Affordable Housing Supply
National Mortgage Professional, 3.28.23, Housing Industry Groups Raise Concerns About BABA
Douglas County News Press, 3.20.23, Role of ‘taxpayer dollars’ in planned apartments near Parker is complicated
Legislative and Regulatory Activities
- April 7 | Comments Due to NCSHA | FHFA Proposed Changes to GSE Capital Requirements
- April 7 | Comments Due to NCSHA | HUD RFI on HUD’s 203(k) Rehabilitation Program
- April 14 | Comments Due to NCSHA | Affirmatively Furthering Fair Housing Proposed Rule
- April 17 | Comments Due | FHFA RFI on Enterprise Single-Family Social Bond Program
- April 17 | Comments Due | HUD RFI on HUD’s 203(k) Rehabilitation Program
- April 18 | Comments Due to NCSHA | NSPIRE Scoring Notice
- April 24 | Comments Due | Affirmatively Furthering Fair Housing Proposed Rule
- April 26 | Comments Due | Department of Energy RFI on IRA Funding Opportunity
- April 27 | Comments Due | NSPIRE Scoring Notice
- May 1 | Comments Due | Review of Mortgage Loan Origination Rules (including Loan Originator Compensation)
- May 12 | Comments Due | Proposed Changes to GSE Capital Requirements
NCSHA, State HFA, and Industry Events
- April 12 | E&A Team’s Annual Accessibility Summit | Virtual
Jim Tassos will speak at this event. - April 17 – 19 | Nebraska Investment Finance Authority’s 2023 Innovation Expo | Lincoln, NE
Jennifer Schwartz will speak at this event. - April 19 | National Association of Realtors® State and Local Issues Policy Committee Webinar | Virtual
Jennifer Schwartz will speak at this event. - April 25 – 27 | Affordable Housing Investors Council’s 2023 Spring Meeting | Baltimore, MD
Stockton Williams will speak at this event. - April 27 – 28 | Novogradac 2023 Affordable Housing Conference | San Francisco, CA
Jennifer Schwartz will speak at this event. - May 3 | Stewards of Affordable Housing for the Future Annual Retreat | Washington, DC
Jennifer Schwartz will speak at this event. - May 3 – 6 | National Association of Local Housing Finance Agencies Annual Conference | Tampa, FL
Robert Henson will speak at this event. - May 9 | Ballard Spahr National Housing Summit | Washington, DC
Jennifer Schwartz will speak at this event. - May 10, 11:59 p.m. ET | Entry Deadline | NCSHA’s 2023 Awards for Program Excellence
- May 15 | Last Day for Discounted Early Registration, Hotel Group Rate: NCSHA’s Housing Credit Connect & Marketplace | Seattle, WA
- June 7 | HCCP Board of Governors Average Income Test Webinar | Virtual
Jennifer Schwartz will speak at this event. - June 13 – 16 | NCSHA’s Housing Credit Connect & Marketplace | Seattle, WA
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