NCSHA Washington Report | May 30, 2025
President Trump surprised many this week when he posted about Fannie Mae and Freddie Mac, “I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President.”
Among the surprised may have been Federal Housing Finance Agency Director Bill Pulte, who serves as conservator, regulator, and board chair of Fannie and Freddie and who said the day after the president’s comment, “They’re already public in a certain way, but I think what President Trump is maybe talking about is — you know, I’ll leave it to him — is in a bigger way and potentially figuring out how these businesses can continue to be worth more and more money over time.”
Not that President Trump’s views have been a secret. In November 2021, he wrote Senator Rand Paul (R-KY) that, “had I controlled FHFA from the start of my administration” (by being able to appoint his own director before the end of President Obama’s appointee’s five-year term), he “would have ordered FHFA to release these companies from conservatorship” and “sold the government’s common stock in these companies at a huge profit and fully privatized” them.
In fact, the first Trump Administration issued a Treasury Department-developed menu of more than 50 recommended legislative and administrative moves to address “this last unfinished business of the financial crisis in a way that preserves what works in the current system, protects taxpayers, and reduces the influence of the Federal Government in the housing finance system.” Congress didn’t come close to passing GSE legislation during Trump 1.0, but Treasury and FHFA “quickly pivoted to administrative reform” once the president’s appointee to lead the latter, Mark Calabria, was in place in the spring of 2019.
While FHFA’s efforts to institute “market-changing reforms” had begun in 2012, under then-director Ed DeMarco, and “the concept of GSE reform through administrative means” had emerged by 2016, it was during Calabria’s tenure that work — within the federal government and at Fannie and Freddie — to establish an actual pathway for the companies to exit conservatorship through administrative actions gained some real momentum.
That’s the track the Trump Administration would need to stay on to accomplish the president’s stated intention this week; even with Republican control of Congress, a legislative overhaul of the GSEs remains highly unlikely. The to-do list is lengthy, complicated, and controversial, suggesting to many observers a multi-year timetable.
But maybe not. This administration is moving fast in many areas, and some speculate the White House has a heightened sense of urgency because monetizing Fannie and Freddie in some form (perhaps in a new sovereign wealth fund, as Treasury Secretary Bessent hinted at) could generate “several hundred billion in cash quickly,” which could come in handy to help offset the cost of big, beautiful tax cuts. By the way, Calabria, the former FHFA director, is now a senior White House official.
However the process unfolds, state housing finance agencies, which have worked closely with Fannie and Freddie for decades and are acknowledged by both as central to their ability to meet their statutory responsibilities to serve lower-income households, will be deeply engaged in the next phase of GSE reform.
Stockton Williams | Executive Director
In This Issue
- Pearson Named IHCDA Executive Director
- NDHFA’s Flohr to Retire
- NCSHA Submits Recommendations for IRS/Treasury 2025 – 26 Priority Guidance Plan
- House Passes Reconciliation Bill Providing Largest Housing Credit Expansion in Quarter Century
- Trump Posts Increase Interest in Ending Fannie Mae, Freddie Mac Conservatorship
- House Passes Bill Authorizing VA Partial Claims Program
- HUD Announces Further Extension of HOTMA Compliance Date
- Ivory Prize for Housing Affordability Awards Announced
- Housing Credit Champion Rangel Dies
- NCSHA in the News
- Looking Ahead
Pearson Named IHCDA Executive Director
Tom Pearson has been appointed executive director of the Indiana Housing and Community Development Authority (IHCDA). Pearson came to IHCDA in December 2011 as a staff underwriter and went on to serve as homeownership operations manager and director of homeownership. He is a graduate of the Indiana University Kelley School of Business and holds an M.B.A. from Anderson University Falls School of Business.
NDHFA’s Flohr to Retire
After 41 years of service, Executive Director Dave Flohr will retire from the North Dakota Housing Finance Agency (NDHFA) on June 13. Flohr was appointed executive director in May 2020 by the Industrial Commission of North Dakota, chaired by Governor Doug Burgum. Flohr made his career with NDHFA, starting in 1984 in the Jamestown field office of the agency’s Housing Assistance Program division. He served as NDHFA’s homeownership division director for 14 years prior to being named executive director. NCSHA wishes Dave all the best in his next chapter!
NCSHA Submits Recommendations for IRS/Treasury 2025 – 26 Priority Guidance Plan
This week, NCSHA sent the U.S. Department of the Treasury and Internal Revenue Service (IRS) a letter asking them to include guidance on issues related to the Housing Credit and Housing Bonds in their 2025 – 26 Priority Guidance Plan. The plan is an annual document that identifies the guidance projects Treasury and IRS will work on during the 12-month period beginning July 1 and ending June 30. NCSHA’s letter urges IRS and Treasury to ensure the Housing Credit and U.S. Department of Housing and Urban Development (HUD) programs are aligned in regard to HUD’s implementation of the Housing Opportunities Through Modernization Act and National Standards for the Physical Inspection of Real Estate; provide clarification related to nonprofit right of first refusal; issue guidance on application of the Violence Against Women Act to the Housing Credit; finalize pending guidance related to compliance monitoring, the Average Income Test, and Audit Technique Guide for Completing Form 8823; and take other actions to improve the ongoing administration of the Housing Credit program. The letter also asks IRS to update its guidance for verifying first-time home buyer status, allow more flexible use of carryforward private activity bond authority for affordable housing, adjust record retention requirements for bonds, amend existing regulations to change how mortgage fees are considered when calculating an MRB mortgage’s effective interest rate, and amend the Yield and Valuation of Purpose Investment regulations to address covered investments.
House Passes Reconciliation Bill Providing Largest Housing Credit Expansion in Quarter Century
On May 22, the House of Representatives passed the 2025 reconciliation legislation — the One Big Beautiful Bill Act — by a 215 – 214 vote, sending the bill to the Senate which will officially begin its consideration of the legislation next week. The bill provides the largest increase in Housing Credit resources since Congress raised the caps on Housing Credits and private activity bonds 25 years ago. The bill includes three provisions directly related to the Housing Credit: increasing the Housing Credit volume cap by 12.5 percent, lowering the bond financing threshold to 25 percent, and allowing states to provide basis boosts of up to 30 percent for properties in rural and Native American areas. All three provisions are temporary, covering calendar years 2026, 2027, 2028, and 2029. The bill also would reform the Opportunity Zones tax incentive, provide 100 percent bonus depreciation for qualifying properties, and terminate or move up the phase-out period for various clean energy tax credits. The bill does not make changes to the tax exemption for private activity bonds. For more information, see NCSHA’s blog.
Trump Posts Increase Interest in Ending Fannie Mae, Freddie Mac Conservatorship
As mentioned above, President Trump jumpstarted a conversation in Washington last week about the future of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. In a post on May 21 on his Truth Social platform, Trump said “the time would seem to be right” for releasing Fannie Mae and Freddie Mac from conservatorship and further announced he would be speaking with Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Federal Housing Finance Agency Director Bill Pulte and making a decision about the GSEs in the near future. In a follow-up post on Wednesday, Trump said that, while he intends to take the GSEs’ public, the federal government will maintain an implicit guarantee on the firms’ business and they will remain under federal oversight. Congressional Republicans largely have expressed openness to ending the GSEs’ conservatorship but have suggested any such actions advance through legislation.
House Passes Bill Authorizing VA Partial Claims Program
The House of Representatives on May 19 unanimously passed the VA Home Loan Program Reform Act (H.R. 1815). The bill, introduced by Rep. Derrick Van Orden (R-WI), authorizes the Department of Veterans Affairs (VA) to offer partial claims to borrowers who are delinquent on their mortgage loans. Under the legislation, a partial claim may not exceed 25 percent of the unpaid principal balance of the loan on the date on which the partial claim is made, except in the case of a borrower who failed to make a payment on a loan during the period from March 1, 2020, through May 1, 2025, in which case the amount of a partial claim may not exceed 30 percent. Through partial claims, which currently are available to Federal Housing Administration and U.S. Department of Agriculture borrowers, a delinquent homeowner can receive a no-interest loan from the agency insuring their loan for the amount due on their mortgage, allowing them to become current on their payments. The homeowner then pays off the partial claim loan when they sell the home. H.R. 1815 will now be referred to the Senate Banking Committee, where its future is uncertain.
HUD Announces Further Extension of HOTMA Compliance Date
Yesterday, HUD’s Office of Housing announced the final compliance date for Sections 102 and 104 of the Housing Opportunity Through Modernization Act (HOTMA) would be extended until January 1, 2026, for owners of multifamily properties covered by a number of HUD programs, including the Housing Choice Voucher, Section 8 Project-Based Rental Assistance, and Section 811 Project Rental Assistance programs, among others. This announcement follows previous deadline extensions for HOTMA compliance, most recently through July 1, 2025.
Ivory Prize for Housing Affordability Awards Announced
Ivory Innovations, a nonprofit academic center based at the University of Utah David Eccles School of Business, announced May 20 the winners of its seventh annual Ivory Prize for Housing Affordability awards. The winners are Grounded Solutions Network’s Homes for the Future Fund, for acquiring and preserving affordable single-family rental homes for eventual sale to buyers from underserved communities; Florida’s Live Local Act, the state’s first major housing legislation in a decade, combining land use reforms, tax incentives, and funding to expand workforce and affordable housing for essential workers; and Reframe Systems, which produces housing through modular micro-factories. These winners were selected for innovation, equity, transparency, and efficiency and driving solutions for housing affordability.
The Ivory Prize recognizes and funds novel solutions to the housing crisis in construction and design, finance, and policy and regulatory reform. In addition to national recognition and ongoing support from Ivory Innovations, each winner receives $100,000. Finalists and winners are selected by Ivory Innovations’ Advisory Board, composed of housing industry veterans from across the country.
Housing Credit Champion Rangel Dies
NCSHA salutes and recognizes the passing of the co-creator and one of Congress’ greatest champions of the Housing Credit program: Rep. Charles Rangel (D-NY). As member and chairman of the House Ways and Means Committee, Rangel was a fierce and fearsome advocate for the Housing Credit, sponsoring and supporting legislation to extend, make permanent, and expand it numerous times.
NCSHA in the News
Affordable Housing Finance, 5.22.25, House Passes Reconciliation Bill with LIHTC Provisions
Legislative and Regulatory Activities
- June 12 | House Housing and Insurance Subcommittee Hearing on Housing in the Heartland: Addressing Our Rural Housing Needs
- July 14 | House Transportation, HUD Appropriations Subcommittee Markup of FY 2026 Transportation, HUD Funding Bill
- July 17 | House Appropriations Committee Markup of FY 2026 Transportation, HUD Funding Bill
NCSHA, State HFA, and Industry Events
- June 4 – 5 | 2025 AHTCC and HAG Affordable Housing Symposium | Washington, DC
Jennifer Schwartz will speak at this event. - June 24 – 27 | NCSHA’s Housing Credit Connect & Marketplace | Chicago
