NCSHA Washington Report | January 6, 2023
Five reasons for some optimism about affordable housing finance and development at the start of 2023:
The Homeowner Assistance Fund is working. Created by Congress to help economically vulnerable homeowners keep the roof over their heads, this state-run program had paid nearly $2 billion to more than 150,000 households through the third quarter of last year, according to data collected by NCSHA. The rate and amount of assistance almost doubled between the second and third quarters of the year, suggesting the most current numbers would show even greater impacts.
Covid recovery housing funds are still flowing for development. While most of the most urgently needed housing aid for Covid-impacted renters has been paid out (with highly successful results), a massive amount of more flexible housing assistance is still coming on line, from federal fiscal recovery funds and supplemental HOME dollars (and, in a few places, reprogrammed emergency rental assistance). Billions in urgently needed construction subsidy, preservation financing, and home repair funding should show up in projects soon as a result.
Homeownership opportunity is expanding (a little). Last fall, the Federal Housing Finance Agency directed Fannie and Freddie to cut some of the higher fees they historically have charged many lower-income borrowers, which NCSHA and others have argued disproportionately disadvantage borrowers of color. Many observers expect the Federal Housing Administration to make a similar move soon with respect to the mortgage insurance it provides. And the number of banks announcing or expanding special purpose credit programs is on the rise.
Affordable housing’s salience as a state and local campaign issue is growing. A Moody’s report on the 2022 mid-term elections found “voters in both red and blue states to overwhelmingly support ballot measures meant to address housing insecurity,” in many cases with up to 70 percent of the vote. “Even in those that failed, the results indicate many voters crossed party lines.” Of note, tucked into the year-end federal spending bill is funding for a new HUD program that will provide financial incentives to pro-housing jurisdictions.
State HFA strength is continuing. S&P Global Ratings reported last November that HFA single- and multifamily programs “exhibited rating stability through the volatility of the COVID-19 pandemic and are on track to do so in the face of the economic struggles expected through the next several years.” Post-pandemic, HFAs are also stepping up to help lead their states’ responses to natural disasters and homelessness and get housing assistance to the households and communities that need it most.
Next week, nearly 1,000 of the remarkably dedicated and effective professionals who work for the nation’s state HFAs will be in Washington, DC, for NCSHA’s HFA Institute. We can’t think of a better place to be to start the new year.
Stockton Williams | Executive Director
Washington Report will return on January 20.
Stockton Williams | Executive Director
State HFA Emergency Housing Assistance
In This Issue
- 118th Congress Convenes
- Biden Signs FY23 Omnibus Spending Bill into Law
- HUD Seeks Input on Disaster Recovery Assistance
- FHA Extends Face-to-Face Interview Waiver
- FHFA Rule Limits New Products
- USICH Releases Plan to Cut Homelessness 25 Percent
- NCSHA in the News
- Looking Ahead
118th Congress Convenes
The 118th Congress officially convened January 3. While Senators have been sworn in and are starting to organize, House members have not been able to take the crucial first step of electing a Speaker as of this writing. Without a Speaker in place, Representatives are unable to take the oath of office, committee chairs cannot be seated and committee memberships cannot be finalized, and the House cannot adopt governing rules. House Republicans elected Kevin McCarthy (R-CA) as their leader late last year. However, to pick up the Speaker’s gavel, he needs to win a majority of those voting for Speaker. With the Republicans’ slim majority and dissent from approximately 20 members of the caucus, McCarthy has not been able to achieve the majority he needs. It remains to be seen how this will be resolved. In the meantime, the House is at a standstill.
Despite the delay, NCSHA is readying our legislative agenda for the 118th Congress. The first step will be to work with congressional housing champions and other stakeholders and allies to reintroduce legislation containing our priorities, including the Affordable Housing Credit Improvement Act, Affordable Housing Bond Enhancement Act, and Neighborhood Homes Investment Act. We also will work on the first-time introduction of HOME Investment Partnerships program reauthorization legislation and press for our HUD and USDA appropriations priorities.
Biden Signs FY23 Omnibus Spending Bill into Law
On December 29, President Biden signed into law a $1.7 trillion federal spending bill to fund the federal government through the end of fiscal year 2023. The legislation, which was the culmination of months of negotiations between appropriators in the House and Senate, includes roughly $858 billion in defense spending and $772.5 billion for nondefense discretionary programs, including funding for numerous housing-related programs at the Department of Housing and Urban Development, Department of Agriculture, and other federal agencies.
As noted earlier, the legislation includes language expressly prohibiting HUD from moving forward with a new solicitation for Performance Based Contract Administration contracts that is substantially similar to the one HUD previously proposed. On the other hand, the legislation does not include any significant revenue provisions, meaning NCSHA’s Housing Credit priorities were not included.
HUD Seeks Input on Disaster Recovery Assistance
On December 20, HUD announced two new requests for information (RFIs) seeking recommendations for how to improve the Community Development Block Grant Disaster Recovery (CDBG-DR) and Mitigation (CDBG-MIT) programs. The two requests for feedback are part of HUD’s Climate Action Plan and mark the first time HUD has sought public input on how to simplify, modernize, and more equitably distribute federal disaster recovery aid to impacted communities. HUD estimates it currently takes a year and a half from when a disaster occurs until the first CDBG-DR dollar is spent on physical housing recovery. HUD hopes these RFIs will reduce the lag time between disasters and when those in need use recovery funds. One RFI is focused on rules, waivers, and alternative requirements and the second is for comments on the formula used to determine funding amounts. The deadline to comment on either RFI is February 21. Please send feedback for NCSHA to consider in our comments to Garth Rieman by February 7.
FHA Extends Face-to-Face Interview Waiver
On December 20, the Federal Housing Administration extended its temporary regulatory and Single-Family Housing Policy Handbook waivers to allow mortgagees to use alternative methods for conducting face-to-face interviews with borrowers, in accordance with FHA’s early default intervention requirements. FHA first published the temporary partial waivers on March 13, 2020, and subsequently extended them through December 31, 2022. This most recent extension is effective through December 31, 2023.
FHFA Rule Limits New Products
On December 27, the Federal Housing Finance Agency published a final rule requiring Fannie Mae and Freddie Mac to provide advance notice to FHFA before offering a new activity and to obtain prior approval from FHFA before offering new products. The final rule, which FHFA summarized in a fact sheet, among other things, clarifies the scope of a new activity and a new product, as well as which activities are excluded from the review and approval requirements. For example, any activity that enhances, alters, or modifies the automated underwriting system is not considered to be a new activity or product.
USICH Releases Plan to Cut Homelessness 25 Percent
The United States Interagency Council on Homelessness (USICH) recently released a federal plan with the goal of reducing homelessness by 25 percent by 2025. The plan — which includes input from individuals who have experienced homelessness as well as state and local leaders, service providers, advocates, and developers — articulates three “foundational” and three “strategic” pillars:
- Lead with equity to address racial and other disparities;
- Use data and evidence to make decisions, including the perspectives of people who have experienced homelessness;
- Collaborate at all levels between federal, state, local, tribal, and territorial governments and public, private, and philanthropic sectors;
- Scale housing and supports that meet demand by increasing the supply of and access to safe, affordable, and accessible housing;
- Improve the effectiveness of homelessness response systems; and
- Prevent homelessness using strategies to reduce the risk of housing instability for households most likely to experience homelessness.
The USICH is an independent federal agency responsible for implementing strategic efforts to prevent and end homelessness and is advised by a council on which sits the heads of 20 member federal agencies, including HUD, the Department of Health and Human Services, and the Department of Veterans Affairs.
NCSHA in the News
Casper Star Tribune, 1.5.23, Lawmakers say no to housing funding for second year in a row
Route Fifty, 12.22.22, A $1.7 Trillion Spending Bill Is Moving Toward Approval. Here’s What’s in It for States and Localities
Notes from Novogradac, 12.21.22, Nation’s Housing Stock Should Reflect Needs of Increasing Number of Older Adults
Forbes, 12.19.22, Covid Mortgage Relief Is Still Available for Homeowners in These States
Notes from Novogradac, 12.16.22, Novogradac Estimates 1.93 Million Additional Affordable Rental Homes Could Be Financed If LIHTC Proposals Are Included in Year-end Tax Legislation
Legislative and Regulatory Activities
- January 11 | Application Deadline | FY22 Choice Neighborhoods Planning and Implementation Grants
- February 7 | Comments Due to NCSHA | HUD Requests for Information on Disaster Recovery
- February 21 | Comments Due | HUD Requests for Information on Disaster Recovery
NCSHA, State HFA, and Industry Events
- January 8 – 13 | NCSHA’s HFA Institute 2023 | Washington, DC
- January 31 – February 1 | Affordable Housing Tax Credit Coalition 2023 Annual Meeting | Scottsdale, AZ
Jennifer Schwartz will speak at this event. - March 27 – 29 | Legislative Conference | Washington, DC
- June 13 – 16 | Housing Credit Connect & Marketplace | Seattle, WA
- October 14 – 17 | Annual Conference & Showplace | Boston, MA
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