NCSHA Washington Report | February 25, 2022
Before the pandemic, federal social safety net programs typically came with significant application requirements designed to deter con artists seeking to rip off the taxpayers and deprive deserving beneficiaries of assistance.
The Supplemental Nutrition Assistance (formerly Food Stamp) program, for example, required formal applications, individual interviews, and evidence of “numerous aspects of [applicants’] eligibility, including their identity, residency, immigration status, household composition, income and resources, and deductible expenses.”
The extraordinary emergency of Covid-19 demanded a different approach to low-income assistance, one that prioritized speed of delivery and ease of access.
All the stakeholders in the federal Emergency Rental Assistance program — landlord representatives, renter advocates, state ERA administrators — pressed the federal government from the get-go to allow renters to simply “self-attest” to their eligibility for rental relief.
The Treasury Department eventually authorized it in full. Administration officials often emphasized self-attestation as not just a recommended practice but a necessary one — both to avert human suffering and to avoid having funds recaptured by the federal government.
Even the earliest agency adopters were clear-eyed about the risks it meant for them. Michigan SHDA’s Kelly Rose speaks for many: “We do expect that whenever there is a large government program like this that we are going to have some bad actors that will try to submit applications that aren’t reality. That’s where it’s potentially a fake tenant, fake landlord, or combination thereof.”
State and local leaders last year asked the federal government for a small safe harbor for bad payments made in good faith, an idea endorsed by the renter groups and the congressional architect of ERA, House Financial Services Committee Chair Maxine Waters.
A new report from Congress’ Government Accountability Office backs state and local concerns: “We and other federal and local auditors have found that self-attestation — a key flexibility encouraged by Treasury — increases risks of noncompliance, improper payments, and fraud,” the auditors wrote.
Treasury responded to GAO that it directed ERA grantees allowing self-attestation to build in protections against fraud it could engender and that Treasury “is not aware of any existing evidence indicating that these ERA measures are creating significant fraud risk.”
Neither are we. State ERA programs are employing a variety of controls, including pre-payment verification of recipients’ identities using tax records and post-payment reviews of a sample of applications. The protections are working. The agencies have thwarted numerous attempted scams, some operating online across multiple states. Risks remain though — they always will.
ERA administrators have had to strike an excruciatingly delicate balance between accountability and access. If some kept in place conventional program integrity measures that made it harder for deserving beneficiaries to access relief (potentially a tragedy), they also helped prevent the undeserving from stealing it (definitely a crime).
Will forthcoming statutorily-required audits of ERA still find indications of improper payments someplace? They might.
Any such findings must be placed in the context of the extraordinary renter needs states and cities faced, the good faith efforts they made to meet them in line with federal guidance, and the large-scale successes they have had delivering Emergency Rental Assistance.
Stockton Williams | Executive Director
State HFA Emergency Housing Assistance
In This Issue
- NCSHA Welcomes New Members
- Treasury Issues Data on Emergency Rental Assistance Program Outcomes in 2021
- Biden Signs Short-Term Continuing Resolution to Keep Government Running Until March 11
- FHA Removes Temporary Covid Multifamily Underwriting Rules
- Senators Introduce Bipartisan Legislation to Reauthorize VAWA
- NCSHA in the News
- Looking Ahead
NCSHA Welcomes New Members
These organizations have joined NCSHA as affiliate members since January: All Clear Decisioning; Beacon Communities LLC; CHR Partners, Inc.; City of Richmond; Coats | Rose; Heron Foundation; and Kairos Investment Management Company. If you work with a partner interested in joining NCSHA, please contact Phaedra Stoger.
Treasury Issues Data on Emergency Rental Assistance Program Outcomes in 2021
On February 24, Treasury released quarterly data on the use of the Emergency Rental Assistance (ERA) programs — ERA 1 and ERA 2 — in calendar year 2021. Between the two programs, state, local, and territorial grantees helped what is likely well north of three million low-income households pay their rent and/or utilities last year. Grantees obligated or spent more than $17.6 billion of ERA 1 — 73 percent of the total available to be expended by September 30, 2022 — and nearly $5.8 billion of ERA 2 — 29 percent of the total available to be expended by September 30, 2025. The data breaks down households receiving assistance by income, race, ethnicity, and gender of head of household. For more information, see NCSHA’s blog.
Biden Signs Short-Term Continuing Resolution to Keep Government Running Until March 11
On February 18, President Biden signed a continuing resolution (CR) funding the federal government through March 11. The CR continues funding all agencies at their fiscal year 2021 funding levels while Congress continues to work on FY 2022 appropriations bills. Senate Appropriations Committee leaders reached an agreement on topline funding levels for FY 2022 appropriations, which allows House and Senate Appropriations Subcommittee leaders and others to negotiate details and enact an omnibus appropriations bill by March 11. See NCSHA’s recent blog for more details.
FHA Removes Temporary Covid Multifamily Underwriting Rules
FHA announced on February 14 it is removing temporary special Covid-19 underwriting rules for multifamily mortgages insured under its Section 223(f) program, effective immediately for all transactions not yet endorsed. Established in April 2020, the temporary rules required nine months of debt service reserves, 250 percent repair escrows, and limits on cash-out refinance transactions. HUD said strong portfolio performance demonstrates resilience to significant Covid impacts and enables it to allow lenders to return to using standard Multifamily Accelerated Processing (MAP) Guide policies going forward. These policies require fewer capital reserves to be held for debt service, a lower percentage of capital to be held in repair escrows, and more flexible requirements for the treatment of cash-out refinance transactions.
Senators Introduce Bipartisan Legislation to Reauthorize VAWA
On February 9, Senators Dianne Feinstein (D-CA), Lisa Murkowski (R-AK), Joni Ernst (R-IA), Richard Durbin (D-IL), and 18 other Senators introduced the Violence Against Women (VAWA) Reauthorization Act of 2022 (S. 3623). The bill would reauthorize VAWA federal grant programs through 2026 and modernize the law. VAWA protects both child and adult victims of domestic violence, dating violence, sexual assault, and stalking. Title VI – Safe Homes for Victims would expand VAWA’s applicability to the Housing Trust Fund, the Rural Housing Voucher Program, and housing programs for homeless veterans. Programs already covered are the Housing Credit, Section 202, Section 811, HOPWA, HOME, Section 8 rental assistance, Section 236, and a number of rural housing programs. A separate similar bill, the Violence Against Women Reauthorization Act of 2021 (H.R. 1620) passed the House of Representatives in March 2021.
NCSHA in the News
The Bond Buyer, 2.16.22, Issuer groups send letter to IRS requesting permanent remote PAB hearings
Legislative and Regulatory Activities
- February 25 | Comments Due | FHFA Proposed Rule on Fannie Mae and Freddie Mac Annual Capital Plans
- March 1, 10:00 a.m. ET | House Oversight and Reform Committee Hearing on the Impact of the American Rescue Plan’s State and Local Fiscal Recovery Funds
- March 4 | Comments Due to NCSHA | FHFA Proposed Strategic Plan for 2022–26
- March 11 | Comments Due | FHFA Proposed Strategic Plan for 2022–26
NCSHA, State HFA, and Industry Events
- March 1 – 2 | Tennessee Housing Conference | Nashville, TN
- March 9 | Institute of Real Estate Management’s Advocacy Impact Day | Virtual
Jennifer Schwartz will speak at this event. - March 9 – 11 | National Affordable Housing Management Association’s Winter Conference | Washington, DC
Jennifer Schwartz will speak at this event. - March 14 – 16 | NCSHA’s 2022 Legislative Conference | Washington, DC
- March 24 – 25 | IPED Learn the Basics: Housing Tax Credits 101 | Boston, MA
Jennifer Schwartz will speak at this event. - March 29 – 30 | Nebraska Investment Finance Authority 2022 Housing Innovation Marketplace | La Vista, NE
Jim Tassos will speak at this event. - March 30 | National Housing Conference: Solutions for Affordable Housing Communications Convening | Washington, DC
Jennifer Schwartz will speak at this event. - June 8 – 9 | CAHEC Partners Conference | Greensboro, NC
Stockton Williams will speak at this event.
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