NCSHA Washington Report | January 24, 2025

President Trump’s trip to the natural disaster zones in western North Carolina and Los Angeles today and the follow-ups from it should have a heavy housing focus.

In North Carolina, the flooding and landslides from Hurricane Helene inflicted at least $12.7 billion in damage to more than 73,000 homes, and roughly 275,000 households are expected to need some kind of housing assistance, based on the latest estimates from the state’s budget office.

More than 40 percent of the 4.6 million people who live in the 39 Helene-impacted counties earn less than 80 percent of their area’s median income, according to the office, meaning they are considered “low income” for the purposes of federal housing aid.

While the full extent of the recent round of largely contained fires in the Los Angeles area — mass evacuations were ordered after a new fire erupted Wednesday — is not known, the title insurance firm First American projects that 17,000 – 24,000 residential units have been destroyed. (The “more than 12,000 structures” widely reported to have been lost include a significant number of multifamily apartment buildings.)

The scale of housing loss and displacement from the mostly affluent and middle-class areas will surely exacerbate L.A.’s already severe housing shortage, with punishing knock-on effects for lower-income renters and workers throughout the region.

North Carolina Governor Josh Stein and California Governor Gavin Newsom have each announced executive actions to accelerate the timetable and lower the costs to rebuild in their states’ disaster areas.

One of Stein’s actions provides an “unlimited waiver on state procurement regulations so that we can quickly increase the supply of temporary housing units on people’s property so that we can keep them safe through the winter so that they can begin the process of rebuilding or repairing.” Among Newsom’s directives is a suspension of state environmental permitting reviews many have blamed for “worsening the state’s housing crisis.”

These and other state and local moves to remove regulatory and bureaucratic barriers to housing construction reflect a sense of urgency that need not be limited to disaster recovery — and could be applied in other states as well. In fact, legislation to reform permitting rules to spur residential development was introduced in 22 state legislatures and passed in 10 of them last year, according George Mason University’s Mercatus Center.

The president’s trip sets the stage to complement state efforts with streamlined federal permitting and other regulatory relief, as the Trump Administration explored during his first term. Western North Carolina and Los Angeles also can be where cost-saving waivers of Davis-Bacon Act wage rules and Build America, Buy America domestic sourcing requirements are piloted for properties serving low-income residents — paving the way for adoption as nationwide policies.

There may be tough politics in the discussions between the White House and the states on additional federal funding for their recovery. Regulatory reform to make it more efficient is an area of obvious common ground — and an immediate opportunity for federal agencies to meet the president’s day-one executive order to “lower the cost of housing and expand housing supply.”

Stockton Williams | Executive Director

In This Issue

• Farmer Named to FHLBank Atlanta Affordable Housing Advisory Council
• Senate Banking Committee Advances Nomination of Turner for HUD Secretary
• Trump Issues Executive Orders on Emergency Housing Cost Relief, Regulatory and Hiring Freezes, Office Work
• House Budget Committee Options Released
• Municipal Bond Advocates Publish New Resources
• Pulte Nominated for FHFA Director
• Scott Outlines Priorities for Senate Banking Committee
• HUD Awards $100 Million to States, Local Governments for PRO Housing Supply Efforts
• HFAs, Nonprofits, State and Local Governments Receive HUD Continuum of Care Grants
• $72 Million Available from HUD to Address Youth Homelessness
• FHA Posts Guidance on Loss Mitigation, Other Servicing Policies
• NCSHA in the News
• Looking Ahead

Farmer Named to FHLBank Atlanta Affordable Housing Advisory Council
Scott Farmer, executive director of the North Carolina Housing Finance Agency and a director on the NCSHA Board, is among four new members appointed to the Affordable Housing Advisory Council of the Federal Home Loan Bank of Atlanta, the bank announced January 13. The council works closely with the FHLBank Atlanta board of directors and management team to ensure the bank meets the community lending and housing finance needs of communities within its district.

Senate Banking Committee Advances Nomination of Turner for HUD Secretary
Following a hearing last week to consider his nomination, the Senate Banking Committee yesterday morning voted to favorably report Scott Turner’s nomination to serve as Secretary of the U.S. Department of Housing and Urban Development (HUD). The nomination advanced on a party-line vote, with all Republicans voting in favor and Democrats against.

In his written and spoken testimony during last week’s hearing, Turner told the committee HUD is currently “failing at its most basic mission,” citing increasing homelessness and a shortage of affordable housing options. He pledged to work with Senators from both parties to address the affordable housing crisis if confirmed. Several committee Democrats pressed Turner on whether he would push back on substantial funding cuts for HUD programs, such as the HOME Investment Partnerships program and Section 8 Housing Choice Vouchers, which President Trump proposed in his first term. Turner declined to take a position on funding for specific programs but said he wants to increase efficiency so HUD makes a bigger impact with the funding it receives and to review each program to ensure it is meeting its mission.

During Thursday’s session to consider Turner’s nomination, Committee Chair Tim Scott (R-SC) argued Turner’s professional and personal experience make him the ideal candidate to make needed reforms to HUD. Ranking Member Elizabeth Warren (D-MA) said that, despite her policy disagreements with Turner, she had been prepared to potentially back his nomination after meeting with him. However, she said the committee should not vote on Turner’s nomination before receiving his Federal Bureau of Investigation background check. Committee Democrats shared Warren’s concerns, while Republicans contended that the Banking Committee has never required such background checks before advancing nominees and the committee should move quickly to confirm a new HUD Secretary given the affordable housing crisis facing the nation.

Trump Issues Executive Orders on Emergency Housing Cost Relief, Regulatory and Hiring Freezes, Office Work
The Trump Administration on Monday issued a series of executive orders (EOs) including several pertaining to housing, federal programs, and the administration of such programs. One executive order directs all federal agencies to find ways to lower prices for Americans, with specific direction for the agencies to seek to lower the cost of housing and expand housing supply. The EO references a study by the National Association of Home Builders which estimates regulations increase the cost of building a new home by 25 percent. It is not known what specific policies the agencies are expected to pursue to lower housing or other costs.

Trump also issued EOs directing federal agencies not to propose or issue any new rules and consider postponing rules that have been published but have not yet gone into effect until they have been reviewed by an official designated by Trump, imposing a hiring freeze on federal civilian employees, and directing agencies to require employees to return to work in office full time.

House Budget Committee Options Released
Last week, news outlets and other sources disseminated copies of this House Budget Committee document outlining more than 200 options for changes to federal programs that would produce budgetary savings and costs over the next 10 years. One proposal would eliminate the exclusion of private activity bond interest from taxable income. Other proposals would reduce the mortgage interest deduction, increase (and reduce or repeal) the state and local tax deduction, reform Fannie Mae and Freddie Mac, amend Medicaid, and eliminate some green energy tax credits.

Municipal Bond Advocates Publish New Resources
The Public Finance Network (PFN), a coalition of municipal bond issuer groups and other interested associations including the Government Finance Officers Association, the National Association of State Treasurers, the National Association of Bond Lawyers, and NCSHA, recently produced two resources to describe municipal bonds and their value and importance: a primer on bonds, Understanding Financing Options Used for Public Infrastructure, and a budgetary impact analysis, Protecting Bonds to Build Infrastructure and Create Jobs.

The primer describes how the $2.7 trillion in municipal bonds issued in the last decade alone have been used to finance more than 80,000 new projects nationwide, including roads, bridges, public transit, ports, airports, parks, affordable housing, water and wastewater facilities, schools, libraries, town halls, nonprofit hospitals and clinics, colleges and universities, electric power and gas facilities, fire houses, and police stations. The budgetary impact analysis finds that eliminating the municipal bond tax exemption would raise borrowing costs $824 billion, a cost that would be passed onto American residents and amount to a $6,555 average tax and rate increase for each American household over the next decade. PFN has distributed these documents to congressional offices and urged Congress to maintain and enhance the municipal bond exemption.

Pulte Nominated for FHFA Director
President Trump announced last Thursday he was nominating Bill Pulte to serve as director of the Federal Housing Finance Agency (FHFA). Pulte is the founder and CEO of the private equity group Pulte Capital Partners LLC and former director of PulteGroup Inc., the home builder founded by his grandfather. He is also well-known for his social media-based philanthropic activities. Pulte has spoken publicly about the need to promote more home building to address the lack of affordable supply. FHFA oversees Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. Former FHFA Director Sandra Thompson resigned effective January 19.

Scott Outlines Priorities for Senate Banking Committee
Senate Banking Committee Chair Tim Scott (R-SC) last Wednesday issued an announcement laying out the committee’s priorities for this Congress. In the release, Scott expressed a desire to work with the Trump Administration and committee members from both parties to advance legislation to “improve financial inclusion and create opportunity across the country.” One of Scott’s stated priorities is “Responsibly Advancing Affordable Housing.” To meet this goal, Scott pledges the committee will look to cut back on regulations and advance legislation, such as his ROAD to Housing Act, to reform federal housing programs. Scott also intends to promote financial literacy education to promote economic mobility. Other notable committee priorities include expanding consumers’ ability to access credit, helping to reign in insurance costs, and giving local governments more authority to quickly develop infrastructure projects.

HUD Awards $100 Million to States, Local Governments for PRO Housing Supply Efforts
On January 14, HUD announced 18 recipients — including the Maryland Department of Housing and Community Development — will receive a total of more than $100 million through its Pathways to Removing Obstacles to Housing (PRO Housing) program. PRO Housing was designed to help communities address restrictive land use policies, improve and implement housing-focused strategies, and increase community resilience with the goal of removing local barriers that prevent the construction of more homes, both for rent and for sale. Read more about the recipients’ plans for their grants here.

HFAs, Nonprofits, State and Local Governments Receive HUD Continuum of Care Grants
On January 17, HUD announced the first of two FY24 Continuum of Care program grant awards, totaling nearly $3.6 billion, to several state HFAs, nonprofits, and state and local governments. The funding will be used to support nearly 7,000 projects providing supportive services and housing assistance to those experiencing homelessness in each of the 50 states, District of Columbia, Guam, Puerto Rico, and U.S. Virgin Islands. Read more about the award recipients here.

$72 Million Available from HUD to Address Youth Homelessness
On January 13, HUD announced a notice of funding opportunity for the Youth Homeless Demonstration Program (YHDP) for FY24. Up to 25 communities will be selected to administer $72 million in grant funding to be used to prevent and end youth homelessness. The grant recipients will focus on developing and implementing community approaches through the creation of housing and supportive services focused on housing. The deadline to apply for this ninth round of YHDP funding is April 17.

FHA Posts Guidance on Loss Mitigation, Other Servicing Policies
On January 16, the Federal Housing Administration (FHA) published mortgagee letter (ML) 2025-06, Updates to Servicing, Loss Mitigation, and Claims, which finalizes a number of proposed changes to its loss mitigation waterfall and the servicing chapter of FHA’s Single-Family Housing Policy Handbook. Concurrently, FHA announced it is seeking additional feedback on the Equity Saver Sale Home Disposition Option through March 17 via its Drafting Table. Other servicing-related matters for which FHA is seeking comment via the Drafting Table include its proposed draft ML Establishment of the Optional Reimbursement Claim Alternative (comments due March 3) and its draft ML Partial Claim Document Recording and Payoff Statements (comments due March 10). Finally, HUD published its Notice of Partial Claim Electronic Delivery Alternative Demonstration in the Federal Register on December 3, with comments due February 3.

To help inform NCSHA’s comments on any of these documents and policies, please contact Rosemarie Sabatino by the dates noted below under Looking Ahead.

NCSHA in the News
Notes from Novogradac, 1.22.25, Localities’ Interaction with the LIHTC: Other Support and Motivations (Post 3 of 4)
The Bond Buyer, 1.17.25, Trump housing policy taking shape

Looking Ahead

Legislative and Regulatory Activities

• January 31 | Comments Due to NCSHA | Notice of Partial Claim Electronic Delivery Alternative Demonstration
• February 3 | Comments Due | Notice of Partial Claim Electronic Delivery Alternative Demonstration
• February 3 | Comments Due | FHFA Proposed Rule on FHLB Governance
• February 14 | Comments Due to NCSHA | HUD Request for Information on Resilience Measures and Insurance Coverage
• February 21 | Comments Due to NCSHA | Establishment of the Optional Reimbursement Claim Alternative
• February 21 | Comments Due to NCSHA | Partial Claim Document Recording and Payoff Statements
• February 28 | Comments Due | HUD Request for Information on Resilience Measures and Insurance Coverage

NCSHA, State HFA, and Industry Events

• January 29 – 30 | Affordable Housing Tax Credit Coalition’s 2025 Annual Meeting | Newport Beach, CA
  Jennifer Schwartz will speak at this event.
• February 11 | National Housing Conference: “Federal Home Loan Banks: Shaping the Future of Affordable Housing and Community Investment” | Washington, DC, and Virtual
  Stockton Williams will speak at this event.
• March 10 – 12 | NCSHA’s 2025 Legislative Conference | Washington, DC