Find Homeowner Assistance Fund Programs by State: Read More

NCSHA Washington Report | February 17, 2023

Published on February 17, 2023

Washington Report NCSHA

The Treasury Department reported this week that state and local governments had committed, through the third quarter of last year, more than $14 billion to “nearly 1,800 housing affordability-related projects — including efforts to both provide short-term assistance and develop new, permanent supply” using fiscal recovery funds provided by the 2021 American Rescue Plan.

If this investment, which is likely continuing to grow, had happened under a specified statutory authority, it would represent the largest one-time federal block grant for affordable housing in history.

In fact, it reflects commitments most states, and many cities and counties, in all parts of the country, are making to solve housing challenges closest to their geographic and market roots. As of last December, 31 states had allocated recovery funds to housing programs and projects, according to NCSHA’s latest survey.

More than half of the states are using recovery funds to shore up Housing Credit developments contending with higher construction costs, 40 percent are similarly supporting other affordable apartment projects, and one-third are financing permanent supportive housing. Thirty percent of states are funding construction of new for-sale homes, and nearly one in four are putting recovery funds into down payment assistance for low-income buyers.

State HFAs are also using recovery funds to innovate. One example: Last month, the Delaware State Housing Authority announced a pilot program to help low-income renters improve their credit scores by reporting their reliable rental payment history. (The potential for rent reporting to improve financial stability and homeownership prospects for renters of color in particular is a featured topic at NCSHA’s virtual symposium on racial equity in the housing system happening later this month.)

When the Treasury Department last summer revised the rules for recovery funds after hearing from state HFAs about the opportunity, we predicted states and cities would quickly make more housing investments as a result. Treasury confirmed that this week, saying its latest numbers reflect “an increase of 15% in the number of projects since the previous reporting period in July, which captured budgeting before Treasury’s updated guidance.”

This sort of successful state-federal collaboration rarely gets the attention it deserves, but there’s no reason it can’t continue. Over the past several weeks, governors from both parties have used their annual state-of-the-state speeches and budget addresses to lay out a number of ideas that could inspire similar federal action.

A rural workforce housing fund in Georgia from Governor Kemp. Infrastructure investments to spur affordable development in New York from Governor Hochul. Tax credits for construction and down payment assistance in Ohio from Governor DeWine.

In New Hampshire, Governor Sununu wants funding for development and zoning reform. Utah Governor Cox’s agenda envisions “smart density, in the right places, paired with improved infrastructure from wise investments, and a renewed emphasis on single-family starter homes.” 

These are just a few examples of how states are stepping up in new ways on affordable housing. Future columns will highlight more.

Stockton-Williams-Washington-Report

Stockton Williams | Executive Director

State HFA Emergency Housing Assistance

In This Issue

Treasury Data Shows States Delivering More HAF Assistance
More than 162,000 struggling homeowners received assistance under the Homeowner Assistance Fund (HAF) through last September according to a brief released by the Treasury Department late last week. The brief aggregates the data from each HAF program administrator’s third quarter 2022 report to Treasury. The number of homeowners assisted through this quarter was up 138 percent from the second quarter of 2022, and Treasury says it expects substantially more homeowners received assistance in the fourth quarter, which goes through the end of 2022.

In total, state, territory, and tribal HAF programs disbursed nearly $2 billion in financial assistance through the third quarter, more than double the amount disbursed through quarter 2. Treasury credits the program with effectively delivering assistance to low-income and traditionally underserved communities, noting 57 percent of homeowners assisted were very low income (at or below 50 percent of area median income). In addition, 35 percent of HAF recipients were African American and 20 percent were Latino. Treasury also released a spreadsheet with more detail.

FHA Seeks Input Regarding 203(k) Rehabilitation Mortgage Insurance Program
On Tuesday, the U.S. Department of Housing and Urban Development (HUD) published a request for information (RFI) in the Federal Register seeking comments on the Federal Housing Administration’s 203(k) Rehabilitation Mortgage Insurance Program. Through the RFI, FHA seeks to improve the program and provide greater support for affordable homeownership opportunities. The RFI includes a question about how the 203(k) program or other energy efficiency programs (Weatherization, Solar and Wind Technologies, and FHA’s Energy Efficient Mortgage) can better align with existing federal, state, and local energy efficiency programs (see Question 7). Comments are due April 17. By April 7, please email to Rosemarie Sabatino any input you would like NCSHA to consider as we develop comments on the proposed rule.

HUD Publishes Final HOTMA Rule and Related Resources
On February 14, HUD issued a final rule implementing provisions of the Housing Opportunity Through Modernization Act (HOTMA). Click on these links to read highlights of the final rule and a questions-and-answers document. HUD has scheduled trainings and other technical assistance on various provisions of the final rule. Information about these and other resources is available on HUD’s HOTMA Resources page.

The primary implications of the rule relate to the calculation of income and asset limitations for residents of certain HUD-assisted housing units, including those supported by the Section 202 Supportive Housing for the Elderly, Section 811 Housing for Persons with Disabilities, Housing for Persons with AIDS, HOME Investment Partnerships, Housing Trust Fund, public housing, and Section 8 programs. Of particular relevance for HFAs that administer these programs, the final rule allows the use of income determinations made under other federal benefit programs for income reexaminations; codifies new income and asset exclusions; requires adult household members to sign a consent form only once, instead of annually; allows self-certification of assets up to $50,000; and permits annual adjustments for inflation of deductions and asset limitations. The rule becomes effective January 1, 2024, for most provisions.

FHFA Seeks Input on Possible GSE Single-Family Social Bond
The Federal Housing Finance Agency (FHFA) yesterday released a request for input seeking stakeholder feedback on Fannie Mae’s and Freddie Mac’s policies pertaining to social bonds designed to support affordable single-family lending. While both firms currently issue multifamily bonds designated as “social bonds” — bonds that meet certain environmental, social, and governance (ESG) standards — neither firm has issued such bonds in support of single-family lending. Through the RFI, FHFA seeks information on the opportunities and risks associated with single-family social bonds. In the RFI, FHFA states any single-family social bond program administered by Fannie Mae or Freddie Mac should provide investors with the additional information they seek and promote sustainability, affordability, and equity in homeownership. FHFA will accept public comments until April 17 and will hold a listening session on March 28. NCSHA is reviewing the RFI in more detail to determine whether to submit comments on behalf of HFAs and their partners. Please send Greg Zagorski by April 3 any input you would like NCSHA to consider.

EPA Issues Initial Guidance for Climate Funding Programs
On February 14, the Environmental Protection Agency (EPA) announced initial guidance related to the design of the Greenhouse Gas Reduction Fund (GGRF) program, established by the Inflation Reduction Act. The GGRF program will entail approximately $27 billion in federal grants for various activities intended to address climate change and reduce greenhouse gas emissions. Specific details on eligible activities remain unclear, but according to the announcement, the GGRF program will consist of a $20 billion General Assistance and Low-Income and Disadvantaged Communities Program, which will award grants to nonprofit entities to collaborate with community finance institutions, including HFAs, to “leverage public dollars with private capital to invest in projects that reduce pollution and lower energy costs for families,” and a $7 billion Zero-Emissions Technologies Program, which will award grants to states, tribes, municipalities, and certain nonprofits to “enable the deployment of residential rooftop solar, community solar and associated storage and upgrades in low-income and disadvantaged communities.”

We anticipate HFAs will be eligible for grants awarded under the second program and will be able to partner with eligible entities for grants awarded under the first program. According to the announcement, EPA plans to open grant applications in early summer, with further detail on selection criteria and award dates to be included in corresponding notices of funding opportunities.

FHA Releases Revised Loss Mitigation Mortgagee Letter
On Monday, HUD published Mortgagee Letter 2023-03, “Corrected and Republished: Expansion of the COVID-19 Recovery Loss Mitigation Options,” which restates the policies published on January 30 in ML 2023-02 and makes several technical corrections. For example, ML 2023-03 corrects the date when mortgagees may submit claims: Mortgagees remain eligible for incentive payments for Covid loss mitigation options executed on or after January 26, 2023.

NCSHA in the News
Affordable Housing Finance, 2.8.23, Pop Quiz with Tom Tomaszewski

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