NCSHA Washington Report | August 20, 2021

Published on August 20, 2021

Web Washington Report Graphics - August 20, 2021

Just two months in as acting director of the Federal Housing Finance Agency, Sandra Thompson is exerting leadership that represents real change at the powerful regulator.

Thompson’s predecessor, Mark Calabria, couched a relentless assault on Fannie and Freddie’s affordable lending activities as a matter of “prudential supervision.” Thompson — who has decades of experience in mortgage market risk management — seems to reject the false premise that safety and soundness are inherently incompatible with a full realization of Fannie and Freddie’s mission responsibilities.

In her first few weeks in charge, she “lowered barriers for COVID-19-impacted borrowers to reduce their interest rates on refis” and canceled “the much-loathed 50-basis-point adverse market refi fee,” as Housing Wire reported. A month ago, FHFA announced Fannie and Freddie would extend their moratorium on single-family real estate-owned evictions until the end of September.

A couple weeks later, the agency announced a memorandum of understanding with HUD to align fair lending oversight and enforcement activities, a move former FHA commissioner and Mortgage Bankers Association CEO David Stevens called “a rare instance where HUD and the regulator of the GSEs have publicly agreed to attempt to synchronize efforts on such a major policy.”

This week, FHFA proposed a significant expansion of Fannie and Freddie’s “affordable housing goals” for 2022 – 2024, which would set targets for the companies’ purchases of mortgages for borrowers in minority census tracts. The rule would also raise the annual benchmarks for Fannie- and Freddie-backed loans to low- and very low-income families.

Thompson and FHFA may just be getting started. In recent remarks on a call with stakeholders, Thompson said:

“FHFA expects the Enterprises to live up to their mission obligations and help ensure that investment capital reaches underserved markets. Fannie and Freddie have a responsibility to identify the obstacles these communities face in accessing mortgage credit and affordable housing, as well as a duty to develop strategies for overcoming them safely and soundly.”

Importantly, it looks like Thompson’s agenda as an independent regulator is in synch with the housing program of the Biden-Harris Administration. Shortly after Thompson’s appointment, Erika Poethig, the top White House official on housing policy, said, “In the coming months and years ahead, we look forward to working with FHFA leadership to use the levers of housing finance to address the racial wealth gap, expand housing supply, and ensure housing affordability.”

NCSHA’s Garth Rieman and I had a chance recently to meet virtually with Thompson and some of her superb senior team. We laid out a set of specific opportunities for FHFA to make immediate progress on its priorities by building on longstanding state HFA partnerships with Fannie, Freddie, and the Federal Home Loan Banks.

We’ll have more to say soon about NCSHA’s vision for the housing GSEs under Thompson’s leadership of FHFA. In the meantime, we are honored she will be keynoting NCSHA’s 50th Annual Conference next month.

Stockton-Williams-Washington-Report

Stockton Williams | Executive Director

State HFA Emergency Housing Assistance

In This Issue

Wyden Introduces Sweeping Affordable Housing Bill
Senate Finance Committee Chair Ron Wyden (D-OR) released on Wednesday the Decent, Affordable, Safe Housing for All Act (DASH Act), which would make substantial investments in affordable housing, addressing both supply and demand needs, with the goal of ending homelessness. This comprehensive bill — which includes both tax and spending measures — seeks to ensure all families with children experiencing homelessness are able to receive a voucher within the next five years; expands health, child care, financial, and nutrition services for families and individuals; increases the production of affordable housing; and invests in homeownership in underserved communities. NCSHA worked closely with the senator’s office on many aspects of the bill, which includes many of NCSHA’s top priorities. Read more in NCSHA’s blog.

FHFA Establishes New, Higher Affordable Housing Goals for Fannie Mae, Freddie Mac
On Wednesday the Federal Housing Finance Agency (FHFA) issued a proposed rule with revised and expanded affordable housing goals for Fannie Mae and Freddie Mac (the Enterprises) for 2022 through 2024. FHFA’s proposal would establish higher benchmark levels for the housing goals and subgoals, as well as two new single-family goals to replace the existing low-income-areas subgoal. One new subgoal continues to target low-income neighborhoods; the other targets minority communities. Under the new minority-census-tract subgoal, a mortgage qualifies if the borrower has an income at or below area median income (AMI) and the property is in a census tract where the median income is below AMI and minorities make up at least 30 percent of the population. Comments will be due 60 days from date of publication in the Federal Register, which has not yet occurred.

HUD Makes $2.7 Billion Available for Homeless Assistance Programs
HUD announced this week it is accepting applications for almost $2.7 billion in fiscal year 2021 funding for its Continuum of Care Program (CoC). Organizations that provide or coordinate housing and supportive services for families and individuals experiencing homelessness may apply to renew existing grants or receive grants for new projects. HUD says it seeks projects focused on using a Housing First approach, partnering with housing and health agencies, advancing racial equity and addressing racial disparities in homelessness, and reducing unsheltered homelessness. Applications are due November 16.

NCSHA in the News
CBS News, 8.13.21, States race to hand out billions in rent aid before federal deadline to use it or lose it

Looking Ahead…

Legislative and Regulatory Activities