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NCSHA Washington Report | December 1, 2023

Published on December 1, 2023

Web Washington Report Graphics - December 1, 2023

For years, states across the political spectrum have tapped their Medicaid programs to address “social determinants of health,” especially access to affordable housing and healthy food, reflecting what Axios reporter Caitlin Owens characterized as “a growing recognition that improving overall population health — and health equity — will have to include interventions beyond the traditional health care system.”

The Biden – Harris Administration, which has quietly facilitated such efforts through important if technical regulatory moves, is now making a more public push to create greater housing and health synergies in the states.

Last month, the Department of Health and Human Services announced a partnership with HUD to “support states in developing or expanding innovative housing-related supports and services for Medicaid-eligible people with disabilities and older adults who are experiencing or at risk of homelessness.”

HHS Secretary Xavier Becerra, who was recently elected chair of the U.S. Interagency Council on Homelessness, met this week with the council’s executive director, Jeff Olivet, and discussed how the federal government can “foster collaboration among state and community systems that provide housing, homelessness, health, disability and aging, and other supportive services that help people live successfully and stably in the community,” according to a White House summary of the meeting.

The main opportunity for state housing innovation with Medicaid funds is through Section 1115 of the program’s 1965 statute, which authorizes HHS to waive certain federal guidelines “to allow states to pilot and evaluate innovative approaches to serving beneficiaries.” Seventeen states have received or are requesting federal approval to use Medicaid funds for housing supports, according to KFF. State HFAs are involved in a number of them.

An early innovator was the Louisiana Housing Authority (part of the Louisiana Housing Corporation), which worked with the state health department to combine Housing Credits and Medicaid funding to provide permanent supportive housing for families displaced by Hurricanes Katrina and Rita. The results included significant reductions in hospitalizations, emergency department utilization, and Medicaid acute care costs and, for more than half the households, an increase in income following entry into the program.

While Medicaid can’t cover housing construction, it can pay for a wider range of housing services than is widely known. Guidance issued a year ago by the federal Centers for Medicare & Medicaid Services (part of HHS) gave states “increased flexibility to use Medicaid dollars to directly support housing expenses, including rent and temporary housing, and invest in community capacity building (for example, in providers and partnerships) to support housing services at a scale that is unprecedented in the program’s history,” according to health industry strategist Dori Glanz Reyneri.

The most ambitious commitment so far may be Oregon’s: The state’s $1 billion plan to invest Medicaid in solutions to social determinants of health will start with housing services for highly at-risk groups. For Oregon Housing and Community Services Executive Director Andrea Bell, an architect of the initiative, in which her agency will play a key role, “Housing and health barriers are connected. The solutions should be reflective of that reality.”
Stockton-Williams-Washington-Report

Stockton Williams | Executive Director

State HFA Emergency Housing Assistance

In This Issue

FHFA Publishes Final Capital Rule
The Federal Housing Finance Agency (FHFA) last week published a final rule amending the Enterprise Regulatory Capital Framework for Fannie Mae and Freddie Mac (the Enterprises). The framework governs how much capital Fannie Mae and Freddie Mac must hold for various assets they hold, including mortgage loans and securities. The final rule could make it easier for the Enterprises to support affordable housing by lowering by 40 percent the risk multiplier assigned to multifamily mortgages backed by properties receiving government subsidies, including the Housing Credit, Section 8 project-based rental assistance, Section 515 Rural Rental Housing Loans, and other state and local programs. NCSHA expressed strong support for this change in its comments on the proposed rule.

The rule also reduces the risk weighting for commingled mortgage-backed securities that contain loans guaranteed by both Fannie Mae and Freddie Mac and increases the default credit score the Enterprises must use when determining the risk weighting for home purchase loans in which the borrower does not have a credit score. NCSHA supported both changes. FHFA removed from the final rule a proposal to change how the firms determine a home buyer’s representative credit score for the purposes of the framework, citing its recent decision to delay implementation of its bi-merge credit reporting requirement.

FHFA Announces 2024 Conforming Loan Limit Increases
On Tuesday, FHFA announced the 2024 conforming loan limits for single-family mortgages eligible for purchase by Fannie Mae and Freddie Mac. The 2024 limit for one-unit homes in most counties will be $766,550, a 5.5 percent increase from $726,200 in 2022. High-cost areas, where 115 percent of the local median home value exceeds the baseline conforming loan limit, will have higher limits. The highest-cost area loan limit will be $1,149,825, 150 percent of the $766,550 conforming loan limit. The $1,149,825 limit also applies to all mortgages for one-unit homes in Alaska, Hawaii, Guam, and the U.S. Virgin Islands. Per federal statute, FHFA is required to adjust the conforming loan limit for Fannie Mae and Freddie Mac annually to reflect changes in home prices as measured by FHFA. FHFA’s House Price Index showed that nationwide house prices increased 5.56 percent between the third quarters of 2022 and 2023. The new loan limits take effect January 1. FHFA released FAQs, a comprehensive list, and a map of the limits for each U.S. county.

FHA Increases Single-Family Mortgage Loan Limits
On Wednesday, the Federal Housing Administration (FHA) established new maximum mortgage limits for FHA-insured Title II forward mortgages via Mortgagee Letter 2023-21. The new loan limits are effective for case numbers assigned on or after January 1, 2024. The new low-cost area “floor” and high-cost “ceiling” loan limits for one-unit single-family properties will increase to $498,257 and $1,149,825, respectively, for calendar year 2024. FHA’s Maximum Mortgage Limits webpage provides additional information and a search tool for specific area limits.

White House Announces Playbook to Address Social Determinants of Health, Including Housing
The White House recently released The U.S. Playbook to Address Social Determinants of Health which finds “[h]ousing security and quality has an important impact on health and well-being, so the lack of adequate, affordable, and safe housing in communities across the country is a major challenge.” The document notes strong correlations between housing instability and specific health problems, such as mental health challenges and adverse outcomes for pregnant mothers, and argues investments to increase housing affordability and stability will help “improve health outcomes for both individuals and communities across the country.” The playbook cites the Medicaid Section 1115 demonstration program, which several states have deployed to provide supportive services to residents of federally assisted affordable housing, as one of several tools available to help mitigate poor health outcomes.

HUD to Hold Webinar on Section 811 PRA NOFO
The Department of Housing and Urban Development is sponsoring a webinar about its Section 811 Project Rental Assistance (PRA) Notice of Funding Opportunity (NOFO) on December 14 from 3:00 – 4:30 pm EST. This pre-application webinar is intended for state HFAs and housing agencies, human services agencies, local stakeholders, and anyone interested in learning more about the NOFO. The NOFO application deadline is February 12 at 11:59 p.m. (EST). Webinar Registration

Lincoln Institute Launches Second Community of Practice for Accelerating Community Investment Initiative
The Lincoln Institute of Land Policy launched the second round of the Accelerating Community Investment initiative’s Community of Practice (ACI CoP) in November. ACI creates opportunities for public development, housing, and infrastructure finance agencies to engage in skill-building and peer learning with philanthropies, mission-aligned investors, and the broader capital markets, with the goal of increasing investment and its impact on communities across the nation. The ACI CoP, first launched in 2021 with approximately 40 agencies and institutions from 14 states, has expanded to 100 participants now representing 18 states, including several state HFAs. More information about ACI and a complete list of CoP participants can be found on the Lincoln Institute’s website.

NCSHA in the News
The Philadelphia Inquirer, 11.21.23, Pennsylvania is leading the way in expanding a savings program that families with rent subsidies can use to buy a home
Off Plan Property Exchange, 11.21.23, Pennsylvania Housing Finance Agency Expands Program to Help Tenants Save for Home Ownership
The Mecklenburg Times, 11.16.23, NC Housing Finance Agency Executive Director Reelected to National Council of State Housing Agencies’ 2024 Board of Directors
DSNews, 11.14.23, Fannie Mae President David Benson to Retire

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