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NCSHA Washington Report | November 4, 2022

Published on November 4, 2022

The congressional session scheduled to start with a Senate roll call vote the evening of November 14 will mark the 14th lame duck legislative period in the last 15 Congresses. Like most of them, the unfinished work to fund the federal government for the fiscal year that started October 1 is the top to-do.

But it’s far from the only major issue in a two-month post-elections grind that is expected, according to Politico, to be “the busiest and most intense since the bipartisan ‘fiscal cliff’ deal inked 10 years ago after a session that stretched through the caroling season.”

For state HFAs and their partners, it’s the highest-stakes lame duck session in memory, with very live legislative opportunities on several top priorities:

Our list doesn’t contain everything we want or the country needs to address its affordability crisis, but it’s an ambitious agenda that’s also achievable because every element has bipartisan support and broad advocacy coalitions behind them. We and others have been laying the groundwork for the moment we’re about to be in for months (and in some cases years).

It will not be easy. Each of our priorities has to compete in the lame duck for funding, floor time, and political support with a slew of other programs, as well as high-profile policies ranging from same-sex marriage and election reform legislation, to national defense policy reauthorization and military aid for Ukraine, to big energy permitting and water resources bills.

Oh yeah, then there’s the debt ceiling, which the country is on track to hit by next summer, a potential disaster which some leaders in both parties are reported to want to get ahead of by increasing this year.

To be sure, the results of next week’s election will influence the tone and substance of the lame duck session, even as some individual races, and possibly, control of Congress, won’t be determined until it’s well under way. Conventional wisdom holds that a red political ripple next Tuesday may be more conducive than a wave to a productive lame duck session.

We’ll let the pundits argue that out and concentrate on what we — and you — can do: continue to make the case for affordable housing with members of both parties.

Stockton-Williams-Washington-Report

Stockton Williams | Executive Director

State HFA Emergency Housing Assistance

In This Issue

NCSHA Welcomes New Members
These organizations joined NCSHA as affiliate members in October: Beam, Longest, and Neff; BondLink; Computershare Trust Company, N.A.; Guidehouse; Lincoln Avenue Capital; Mr. Cooper; Rackleff LLP; Rhode Island Department of Housing; and Speedchain. If you work with a partner interested in becoming a member, please contact Phaedra Stoger.

NCSHA Asks FHFA to Maintain FHLB Regional Structure, Help AHP Work Better with Other Affordable Housing Programs
On Monday, NCSHA submitted comments to the Federal Housing Finance Agency (FHFA) as part of FHFA’s recently announced comprehensive review of the Federal Home Loan Banks (FHLBs). Reflecting feedback from HFAs, including those who work closely with their FHLB, NCSHA asked FHFA to maintain the FHLB system’s regional structure, which helps to ensure the FHLBs better address the nation’s diverse housing needs. NCSHA also urged FHFA to consider ways the FHLBs can better pair their affordable housing activities with important federal, state, and local government programs, particularly those administered by HFAs. NCSHA suggested FHFA recommend to Congress that each FHLB’s contribution to their Affordable Housing Program be increased from 10 to 15 percent.

NCSHA Recommends HUD Make New Green and Resilient Retrofit Program Flexible
On October 27, NCSHA submitted comments to the Department of Housing and Urban Development (HUD) on its new Green and Resilient Retrofit Program (GRRP), urging HUD to provide as much flexibility as possible in eligible applicants and how recipients may use and structure the GRRP funds. NCSHA’s letter recommends HUD make any project funded with Housing Credits, HOME, Fiscal Recovery Funds, and other federal sources of funds presumptively eligible for GRRP funds to avoid establishing additional requirements that might complicate the combination of GRRP funds with these other programs. NCSHA’s comments also ask HUD to consider providing multi-project loans or grants to HFAs to enable them to act as intermediaries in the distribution of GRRP funds and making funds available on a regional or statewide basis to ensure geographic equity in their distribution and use.

NCSHA, HPC Urge FHA to Allow HAF Recipients to Receive Covid-19 Recovery Home Retention Option
In an October 20 letter, NCSHA and the Housing Policy Council (HPC) urged the Federal Housing Administration (FHA) to make homeowners who have pre-qualified for or received Homeowner Assistance Fund (HAF) assistance that has brought their mortgage loans current eligible to receive a Covid-19 Recovery Home Retention Option if they verbally attest they cannot afford their pre-hardship monthly mortgage payment. The letter also asks FHA to increase the amount of partial claim cap a homeowner has available from 25 percent to the maximum statutory amount of 30 percent and to allow HAF recipients to use the Covid-19 Recovery Home Retention Options until state HAF funding is fully allocated or through September 30, 2026 (when HAF programs expire).

States Receive Additional Credit Authority Through 2022 National Pool Reallocation
Last week, the IRS issued Revenue Procedure 2022-37 providing additional Housing Credit authority for calendar year 2022 to qualified states through the National Pool. Twenty-seven states received more than $5.4 million in unused Credit authority. The National Pool is the mechanism by which unused Housing Credit carryovers are redistributed to qualified states. 

HUD Releases 2023 Housing Credit Difficult Development Areas, Qualified Census Tracts
HUD has issued the 2023 list of Difficult Development Areas (DDAs) and Qualified Census Tracts (QCTs) for purposes of Housing Credit basis boost allowances. DDAs are areas with high construction, land, and utility costs relative to area median income (AMI), and QCTs are areas where either 50 percent or more of households residing there have incomes of less than 60 percent of AMI or the area has a poverty rate of at least 25 percent. The number of areas that can be designated as DDAs or QCTs is capped. The cumulative population of metropolitan DDAs cannot exceed 20 percent of the cumulative population of all metropolitan areas, and the cumulative population of nonmetropolitan DDAs cannot exceed 20 percent of the cumulative population of all nonmetropolitan areas. The population of all QCTs in a given area may not exceed 20 percent of the total population in that area.

HUD Sets Final Submission Deadline for HOME-ARP Allocation Plans
HUD recently issued Notice CPD-22-13 revising HOME-ARP Implementing Notice CPD-21-10 to set a final deadline of March 31, 2023, by which participating jurisdictions (PJs) must submit their HOME-ARP allocation plans to HUD. The notice also sets forth a process for reallocation of HOME-ARP dollars if a PJ fails to submit its plan by the submission deadline. An appendix (which can be found at the link for Notice CPD-22-13 above) describes waivers and alternative requirements for revisions to HOME-ARP allocation plan requirements. 

HUD Announces $148 Million Available for Covid-19 Expenses in Assisted Multifamily Properties
HUD announced November 1 it is opening a new application period for Covid-19 Supplemental Payment (CSP) funding. Assisted multifamily property owners may use these funds for operating expenses associated with protecting residents and staff from Covid-19. Eligible properties include those financed with Section 202 Housing for the Elderly, Section 811 Housing for Persons with Disabilities, and Section 8 Project-Based Rental Assistance programs. Applications are due February 21, 2023. HUD does not anticipate making future CSP funding available following this round.

FHFA Approves New Credit Score Models for GSE Loans
The Federal Housing Finance Agency announced last week it had officially approved the use of two new credit scoring models by government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac: the FICO 10T model and the VantageScore 4.0 model. The approval of the new models is the culmination of FHFA’s years-long effort to modernize the credit scoring models used by the GSEs, who have used the Classic FICO model for the past 20 years. In a fact sheet accompanying the announcement, FHFA says the new credit score models will provide the GSEs more accurate information on a borrower’s credit and expand access to mortgage credit to more borrowers, as both scores include payment information not often included in older credit score models, including payment history for rent, utilities, and phone/internet services. FHFA expects transitioning to the new scores will be a multiyear process.

FHFA to Eliminate GSE Upfront Fees for HFA Loans, Other Affordable Mortgages
The Federal Housing Finance Agency announced last week that Fannie Mae and Freddie Mac will soon eliminate upfront fees for single-family mortgage loans assisting low- and moderate-income home buyers, including Fannie Mae HFA Preferred and Freddie Mac HFA Advantage loans. In addition to the HFA products, the GSEs will end the upfront fees for all mortgages for first-time home buyers earning at or below 100 percent of area median income (120 percent for those living in high-cost areas), all Fannie Mae HomeReady and Freddie Mac HomePossible loans, and all single-family loans that support the GSEs’ Duty-to-Serve programs. FHFA estimates nearly 20 percent of home buyers served by the GSEs will benefit from the new policy. The fee reductions will take effect as soon as possible. The GSEs will also increase fees for most cash-out refinance loans beginning February 1, 2023.

Treasury Announces New Markets Tax Credit Awards
On October 28, the U.S. Treasury’s Community Development Financial Institutions Fund announced it had awarded $5 billion in New Markets Tax Credits (NMTC) to 107 community development entities, including multiple entities formed by or affiliated with state HFAs. The NMTC program permits individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in financial intermediaries that provide loans, investments, or financial counseling in low-income urban and rural communities. Treasury says approximately $1 billion (22 percent) of the investment proceeds from the latest round of awards likely will be used to finance and support real estate projects in low-income communities.

FHA Proposes Changes in Manufactured Home Loan Limits
On October 18, the Federal Housing Administration published a proposed rule, Indexing Methodology for Title I Manufactured Home Loan Limits (Docket No. FR-6207-P-01), in the Federal Register for public comment. Under this proposed rule, FHA would establish indexing methodologies to calculate annually the loan limits for manufactured home loans, manufactured home lot loans, and manufactured home and lot combination loans insured under the Title I Manufactured Home Loan Program. The indexing methodology would be based on property data collected by the U.S. Census Bureau and would establish loan limits based on the number of sections that make up a manufactured home. Comments are due December 19. Please send feedback for NCSHA to consider in our comments to Rosemarie Sabatino by December 9.

USDA Extends Manufactured Housing Loan Pilot
On November 2, the U.S. Department of Agriculture announced it has extended the Single-Family Section 502 Direct and Guaranteed Manufactured Housing pilot program until November 4, 2024, at which time it will be revaluated. The pilot began in 2016 as a way for Rural Development (RD) to finance existing manufactured homes through the Section 502 Direct and Guaranteed Loan programs. To be eligible for financing under the pilot, a manufactured home must have been built on or after January 1, 2006, and pass a HUD guideline-compliant unit inspection. Outside the pilot, only new manufactured homes are eligible for RD financing. States currently participating in the pilot program are Colorado, Iowa, Louisiana, Michigan, Mississippi, Montana, Nevada, New Hampshire, New York, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

NCSHA in the News
Wyoming K2 Radio, 10.26.22, WCDA Wins Award for ‘Pay it Forward Home Makeover’ Campaign
Central Oregon KTVZ, 10.25.22, Oregon housing agency honored for Permanent Supportive Housing program
Cinncinati WVXU, 10.24.22, Affordable housing developers say federal funding isn’t keeping up with costs. That’s a problem
Bloomberg Tax, 10.21.22, IRS Housing Tax Credit Final Rules to Boost Investor Interest

Looking Ahead…

Legislative and Regulatory Activities

NCSHA, State HFA, and Industry Events

  • November 9 – 10 | ProLink Technology Live 2022 | Virtual
    Jennifer Schwartz will speak at this event.
  • November 15 | New Hampshire Housing’s Housing & Economy Conference | Manchester, NH
    Jennifer Schwartz will speak at this event.
  • November 16 | 2022 Vermont Statewide Housing Conference | Burlington, VT
    Jennifer Schwartz will speak at this event.
  • December 1 – 2 | Novogradac 2022 Tax Credit Housing Finance Conference | Las Vegas, NV
    Jennifer Schwartz will speak at this event.
  • January 8 – 13 | NCSHA’s HFA Institute 2023 | Washington, DC

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