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NCSHA Washington Report | March 3, 2023

Published on March 3, 2023

Washington Report NCSHA

Some of the most innovative ideas in affordable housing are pushing the system to provide a more level field for everybody involved and affected.

Some of the remarkable people doing the pushing pointed out this week during an NCSHA national symposium that their breakthrough efforts and others like them are ready to become mainstream, if more of their industry peers follow their example.

Take special purpose credit programs (SPCPs). The Biden – Harris Administration in 2021 provided regulatory clarity that has opened the door for more lenders to consider creating new offerings specifically for people who “under the organization’s customary standards of creditworthiness, probably would not receive such credit or would receive it on less favorable terms” than others.

Now, more of them are. Some are brand-name conventional lenders, whose trade group, the Mortgage Bankers Association, partnered with the National Fair Housing Alliance to develop nuts-and-bolts toolkits any lender can put to work. Others are community development financial institutions, like the Low Income Investment Fund, which has an active SPCP and plans to launch two more.

Since setting up such targeted direct lending programs is legally challenging for governmental entities, such as HFAs, they may be able to add value as a liquidity provider, our speakers suggested. HFAs also could accomplish similar objectives through other lending lenses, like focusing on “first-generation” home buyers, as the HFAs in Rhode Island and Vermont are doing.

Other win-wins are available through new financial tools that help low-income renters build credit and assets that also disrupt disincentives built into safety net programs that tend to take away benefits as soon as somebody starts to get their head above water.

Compass Working Capital has shown that every $276 of public investment in its self-sufficiency model generates $10,000 in benefit for renters. While the main proof of concept is in public housing, relatively modest investment by apartment owners and state HFAs could help test it in other multifamily communities. Positive rent payment reporting, which we wrote about last week, is another area of opportunity, where the HFAs in Delaware and Ohio HFA are leading.

We also wrote recently about burgeoning efforts to help developers of color build sustainable businesses. We heard this week that opportunities for HFAs can include aligning their established programs with innovative financing from others willing to take greater risk, such as the collaboration between New York State Homes and Community Renewal and the Community Preservation Corporation.

Symposium speakers also urged HFAs and other funding sources to assess minority developers’ experience and readiness more thoroughly and to be willing to provide more patient, flexible capital to emerging companies whose business models by design challenge preconceived notions. As Bree Jones of Baltimore-based Parity Homes says, “Our secret sauce is that there’s a misconception that there’s no demand or interest for housing opportunities in these neighborhoods.”

If your schedule prevented you from participating in this week’s virtual event, the program is available in its entirety on demand.

Stockton-Williams-Washington-Report

Stockton Williams | Executive Director

State HFA Emergency Housing Assistance

In This Issue

Faust Participates in FHFA Roundtable on FHLB Products and Services
The Federal Home Loan Banks (FHLBs) should be encouraged to work more closely with state HFAs to support affordable housing, Kristin Faust, the executive director of the Illinois Housing Development Authority and a member of NCSHA’s Board of Directors, told regulators during a listening session this week in Detroit. Faust spoke at a roundtable hosted by the Federal Housing Finance Agency (FHFA), the latest in a nationwide series of listening sessions the agency is holding to consider possible changes to the FHLB system as it approaches its 100th anniversary.

Wednesday’s session focused on FHLB products and services. Faust, who also serves on the Chicago FHLB’s Community Investment Advisory Council, reminded attendees that HFAs are a key component of the affordable housing finance ecosystem and natural partners for the FHLBs. She also urged FHFA to keep the regional structure of the FHLB system, which she argued ensures the FHLBs serve the diverse needs of each region. In addition, Faust told FHFA the FHLBs should consider how they align their Affordable Housing Program (AHP) standards and procedures so AHP funding can better be paired with Housing Credit financing.

Walker to Testify at Senate Finance Hearing on Affordable Housing Supply
The Senate Finance Committee will hold a hearing next Tuesday, March 7, to consider tax policy’s role in increasing affordable housing supply for working families. Washington State Housing Finance Commission Executive Director Steve Walker will testify on behalf of NCSHA. NCSHA will report on the hearing in next week’s Washington Report.

NCSHA Supports HUD Proposed Waiver of Build America, Buy America Requirements
NCSHA provided comments on the U.S. Department of Housing and Urban Development’s most recent proposed waiver and new implementation timeline for Build America, Buy America provisions for HUD-assisted housing programs, including the HOME Investment Partnerships program and Housing Trust Fund (HTF). These provisions, included in the Infrastructure Investment and Jobs Act, will eventually impose domestic sourcing requirements for certain federally funded infrastructure investments. The proposed implementation timeline provides for relief for the HOME and HTF programs until at least August 2024, and the waiver, once finalized, will be fully retroactive to the date of expiration of the previous waiver. NCSHA continues to argue that affordable housing should be exempt from the requirements as they could significantly increase development costs and make it much more difficult to address the nation’s critical shortage of affordable housing.

HUD Awards $5.6 Billion in Affordable Housing, Community Development, Homeless Assistance Grants
On February 27, HUD announced awards of $5.6 billion in annual formula grants for fiscal year 2023 across a variety of programs, many of which are administered by state HFAs: $3.3 billion for Community Development Block Grants; $1.5 billion for the HOME Investment Partnerships program; $499 million for Housing Opportunities for Persons With HIV/AIDS; $290 million for Emergency Solutions Grants; and $30 million for the Recovery Housing Program. HUD’s Office of Community Planning and Development published award amounts for all grantees.

FHFA Announces Housing Trust Fund, Capital Magnet Fund Allocations
On February 28, FHFA announced the Housing Trust Fund and Capital Magnet Fund (CMF) will receive $354 million and $191 million, respectively, based on the government-sponsored enterprises’ new business in 2022. The HTF, which is administered by HUD, allocates annual funding by formula to states for the production or preservation of affordable housing. The CMF, administered by the Treasury Department, makes competitive awards to community development financial institutions and other nonprofit organizations to finance affordable housing and other community economic development activities. Notably, these amounts are significantly less than last year’s allocations as the enterprises’ new business slowed markedly due to rising interest rates and other market conditions. Last year, the HTF and CMF received $740 million and $398 million, respectively.

Upcoming Webinars on DOE’s Buildings Upgrade Prize
As we announced in the February 3 Washington Report, the Department of Energy (DOE) recently began accepting applications for its Buildings Upgrade Prize (Buildings UP), which will award more than $22 million in cash prizes and technical assistance to teams with innovative ideas to accelerate energy efficiency and building electrification upgrades in residential and commercial buildings. Multi-stakeholder teams are strongly encouraged to apply and may consist of HFAs, municipalities, states, counties, tribal entities, territories, public housing authorities, and regional planning organizations as well as eligible nonprofits. Applications will be accepted through July 18. Residential Retrofits for Energy Equity is hosting a pair of introductory webinars on March 7 and March 9 for potential applicants to learn more about the program and how to develop a strong application. Recordings of these webinars, as well as past webinars, will be available, and more program information also can be found here.

Fannie Mae Partners with Multifamily Industry to Launch 2023 Multifamily Energy and Water Survey
Fannie Mae announced March 1 it has launched the 2023 Multifamily Energy and Water Survey to collect and analyze 2022 multifamily property energy and water consumption, costs, and characteristics for a wide range of multifamily properties. The U.S. Environmental Protection Agency (EPA) will use the data to update the 1-100 ENERGY STAR Score and EPA’s Water Score for Multifamily Housing, which provide transparency into how a multifamily building’s energy or water consumption compares to similar multifamily buildings in the United States. NCSHA and many other organizations including Enterprise Community Partners, Mortgage Bankers Association, National Apartment Association, National Multifamily Housing Council, NeighborWorks America, Stewards of Affordable Housing for the Future, and Urban Land Institute, are partnering with Fannie Mae to publicize and distribute the survey. The 2023 survey will conclude on June 30. More information about the survey, the survey link, other helpful resources, and contact information are available here.

Looking Ahead…

Legislative and Regulatory Activities

NCSHA, State HFA, and Industry Events

  • March 8 – 10 | National Affordable Housing Management Association’s Biannual Top Issues in Affordable Housing Conference | Washington, DC
    Stockton Williams and Jennifer Schwartz will speak at this event.
  • March 15 | National Housing Conference’s Solutions for Housing Communications | Washington, DC
    Stockton Williams will speak at this event.
  • March 27 – 29 | NCSHA’s 2023 Legislative Conference | Washington, DC
  • March 30 | National Community Reinvestment Coalition Just Economy Conference 2023 | Washington, DC
    Garth Rieman will speak at this event.
  • April 12 | E&A Team’s Annual Accessibility Summit | Virtual
    Jim Tassos will speak at this event.
  • April 17 – 19 | Nebraska Investment Finance Authority’s 2023 Annual Conference | Lincoln, NE
    Jennifer Schwartz will speak at this event.
  • April 25 – 27 | Affordable Housing Investors Council’s 2023 Spring Meeting | Baltimore, MD
    Stockton Williams will speak at this event.
  • April 27 – 28 | Novogradac 2023 Affordable Housing Conference | San Francisco, CA
    Jennifer Schwartz will speak at this event.

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