NCSHA Washington Report | October 15, 2021

The biggest challenge for state and local agencies operating the Emergency Rental Assistance program has been creating what the administration calls “a new national infrastructure” largely from scratch and building it to reach constituencies — small landlords and their renters — outside the housing assistance system and with few, if any, other options for help.

The biggest challenge for the agencies — all at the state level — that will operate the Homeowner Assistance Fund may be optimizing the funds to work within an established system that’s generally well-connected to its intended beneficiaries already, many with additional options available.

In other words, if emergency rental assistance administration has demanded building a plane already at altitude and flying it to new destinations, homeowner assistance may entail ensuring the smoothest landing for as many as possible with familiar, if new, instruments amidst some turbulence.

What turbulence? Mortgage delinquency rates are falling rapidly, in tandem as usual with declining unemployment, according to the Mortgage Bankers Association, whose newest numbers show the largest quarterly declines in FHA and VA loan delinquency in their survey’s history and the lowest foreclosure inventory rate in 40 years.

Still, foreclosures jumped more than 30 percent from the last quarter and are up 67 percent year over year, albeit from a historically low base, according to the MBA. And, according to CoreLogic, “roughly one million Americans have been unable to make payments for at least half a year and still lean on options such as forbearance and loan modifications to keep from entering foreclosure.”

The tiresome refrain that the homeowner hurt from the pandemic will not come close to the overall pain from the Great Recession will be no comfort to those who are affected, who in many cases still bear scars from the last crisis. “An unchecked wave of foreclosures would drain billions of dollars in wealth from the Black and Hispanic communities hardest hit by the pandemic and still recovering from the impact of the Great Recession just over a decade ago,” former CFPB Acting Director Dave Uejio recently said.

Aiming to stem the tide, the Biden – Harris Administration in July rolled out a “Streamlined COVID-19 Recovery Waterfall” for FHA-insured loans, essentially “a set of deeper payment reductions with less paperwork than current loss mitigation options,” as the Urban Institute described.

The administration has said it wants HAF assistance to be “integrated into” the waterfall and related relief through FHA, VA, USDA, and Fannie and Freddie, “providing additional payment reduction to borrowers who need it and to borrowers whose mortgages are not backed by federal agencies.” A key issue in states’ current discussions with Treasury about their HAF plans is specifically what “integration” means in practice.

Optimal integration — and return on taxpayer investment in the $10 billion program — will require an arguably unprecedented level of communication and collaboration among state HAF administrators, servicers, and counselors. And continued give-and-take between the state agencies and Treasury Department, the public sector co-pilots of the HAF.

Stockton Williams | Executive Director 

State HFA Emergency Housing Assistance

In This Issue

• • NCSHA Welcomes New Members
  • HUD Holds Affirmatively Furthering Fair Housing Policy Listening Sessions
  • Waters, Democrats Fight for Reconciliation Housing Funds
  • FHFA Announces 2022 Multifamily Loan Purchase Caps for Fannie Mae and Freddie Mac
  • HUD Proposes Climate Action Plan
  • HUD Report Shows Small Increase in Worst-Case Housing Needs and Persistent Supply Shortage
  • Looking Ahead

NCSHA Welcomes New Members
These organizations have joined NCSHA as affiliate members since September: Dwelling Technologies Inc.; Fay Financial; Gere Tactical, Inc.; HORNE LLP; MHT Housing, Inc.; National Creditors Connection, Inc.; OSaaS LLC; Overbrook Square Group; Public Partnerships (PPL); Speridian Technologies LLC; Tetra Tech, Inc.; Viriya Consulting; West Virginia Human Rights Commission; Witt O’Brien’s; and X-Caliber Capital. If you work with a partner interested in joining NCSHA, please contact Phaedra Stoger.

HUD Holds Affirmatively Furthering Fair Housing Policy Listening Sessions
On October 13, HUD held the first of three virtual listening sessions to gather stakeholder perspectives as it begins a new rulemaking process to build upon and improve the 2015 Affirmatively Furthering Fair Housing (AFFH) regulations. The 2015 AFFH final rule was repealed and replaced under the Trump Administration, but the Biden Administration, in an interim final rule published in July, repealed the Trump Administration rule, reinstated certain definitions and certifications of the 2015 AFFH rule, and indicated it would undertake a separate process to reinstate and adjust the 2015 AFFH rule. The listening sessions are the first step in the process. 

This first listening session focused on the nexus between fair housing planning and the Consolidated and Public Housing Authority plans and on stakeholder engagement in fair housing planning. During the session, NCSHA provided feedback on the importance of HUD designing a fair housing planning process specific to state-level grantees, rather than requiring state grantees to attempt to fit into a process designed with local-level grantees in mind. In particular, NCSHA presented the specific challenges state grantees face in the stakeholder engagement process and the importance of allowing state and local grantees to collaborate on stakeholder engagement even if they are not collaborating on other aspects of fair housing planning. NCSHA also will participate in listening sessions on October 15 focused on data analysis, regional cooperation, and linkages between AFFH and non-HUD programs, and on October 18 focused on HUD review of fair housing plans and ongoing compliance with the AFFH process.

Waters, Democrats Fight for Reconciliation Housing Funds
With Democratic leaders in the House and Senate under pressure to reduce the overall size and scope of the reconciliation legislation, affordable housing champions are responding to concerns that leadership negotiators may drop some of the affordable housing investments from the final bill. House Financial Services Committee Democrats — led by Chairwoman Maxine Waters (D-CA) — are pushing to maintain housing funding in the bill. On October 6, all committee Democrats sent President Biden, House Speaker Nancy Pelosi (D-CA), and Senate Majority Leader Charles Schumer (D-NY) a letter stating investments in affordable housing cannot wait and must be included at robust levels in the budget reconciliation package. Waters also held a press conference and a call with stakeholders this week. In addition, Senators Jeff Merkley (D-OR), Alex Padilla (D-CA), and Dianne Feinstein (D-CA) joined with 33 of their Senate colleagues to send President Biden, Pelosi, and Schumer a letter in support of the almost $330 billion in funding for key affordable housing programs included in legislation the House Financial Services Committee reported last month.

FHFA Announces 2022 Multifamily Loan Purchase Caps for Fannie Mae and Freddie Mac
The Federal Housing Finance Agency (FHFA) announced Wednesday it has raised the 2022 multifamily loan purchase caps for Fannie Mae and Freddie Mac (the Enterprises) to $78 billion each from $70 billion each in 2021, based on FHFA’s projections of the overall growth of the multifamily originations market. FHFA will require the Enterprises to devote at least 50 percent of their multifamily business to mission-driven affordable housing. FHFA also will require at least 25 percent of each Enterprise’s multifamily business be affordable to residents at or below 60 percent of area median income (AMI), up from 20 percent in 2021. In addition, FHFA has changed certain definitions of mission-driven multifamily affordable housing to include loans on affordable units in cost-burdened renter markets and loans to finance energy or water efficiency improvements with units affordable at or below 60 percent of AMI.

HUD Proposes Climate Action Plan
HUD last Thursday released an agency-wide plan to identify and address its most significant climate risks and vulnerabilities. The plan was developed in response to President Biden’s Executive Order on Tackling the Climate Crisis at Home and Abroad and is part of the administration’s broader Justice40 Initiative. Under the plan, HUD will update its climate risk data and research, reduce climate-related financial risks in mortgage financing, and work to strengthen disaster recovery and resiliency responses as part of its efforts to reduce HUD’s environmental footprint. HUD’s Climate Action Plan, along with 23 other federal agency plans, is available here. All federal agency plans are open to public comment until November 6. Please send your comments on HUD’s plan to Garth Rieman by October 22.

HUD Report Shows Small Increase in Worst-Case Housing Needs and Persistent Supply Shortage
According to HUD’s recent Worst Case Housing Needs: 2021 Report to Congress, 7.8 million renters experienced worst-case housing needs in 2019, a statistically insignificant increase from 7.7 million in 2017. HUD defines ‘worst-case housing need’ as renter households making less than 50 percent of area median income who do not receive government housing assistance and spend more than half of their incomes on rent, live in severely inadequate conditions, or both. The report, released earlier this week, also estimates the private market and public rental assistance programs together made available only 62 affordable units per 100 very low-income renters in 2019 and says the COVID-19 pandemic and associated economic difficulties in 2020 and 2021 may cause worst-case housing needs to increase substantially unless policy-makers take a comprehensive approach to the longstanding and evolving challenges renter households face across the nation.

Looking Ahead…

Legislative and Regulatory Activities

• October 15 | Comments Due to NCSHA | OCC Proposed Rule on the Community Reinvestment Act
• October 15 and 18 | HUD Affirmatively Furthering Fair Housing (AFFH) Rulemaking Listening Sessions | Virtual
  NCSHA will participate in these sessions.
• October 25 | Comments Due | FHFA Request for Input on Fannie Mae’s and Freddie Mac’s Equitable Finance Plans
• October 25 | Comments Due | FHFA Proposed Affordable Housing Goals for Fannie Mae and Freddie Mac
• October 27 | Comments Due to NCSHA | HUD’s Climate Action Plan
• October 29 | Comments Due | OCC Proposed Rule on the Community Reinvestment Act
• November 6 | Comments Due | HUD’s Climate Action Plan
• November 16 | Application Deadline | FR-6500-N-25, Notice of Funding Opportunity FY 2021 Continuum of Care Competition

NCSHA, State HFA, and Industry Events

• October 19 – 22 | National Affordable Housing Management Association’s Fall Conference | Virtual
  Jennifer Schwartz is speaking at this event.
• October 20 – 21 | 2021 Maine Affordable Housing Conference | Virtual
  Stockton Williams will speak at this event.
• October 26 – 28 | Strength Matters Financial Management Conference | Virtual
  Stockton Williams will speak at this event.
• October 28 – 29 | National Leased Housing Association 2021 Fall Seminar | Virtual
  Jennifer Schwartz will speak at this event.
• November 1 | 2021 HFA/CDFI Virtual Summit Hosted by Fannie Mae
  Stockton Williams will speak at this event.
• November 9 | Manufactured Housing Institute NCC Fall Leadership Forum | Chicago
  Jennifer Schwartz will speak at this event.
• November 9 | ProLink Technology Live 2021 | Virtual 
  Jennifer Schwartz will speak at this event.
• November 10 – 12 | Virginia Governor’s Housing Conference | Norfolk
• November 17 – 18 | NCSHA’s Housing Credit 101 | Virtual
• November 18 – 19 | NAHB 2021 Mortgage Roundtable Meeting
  Stockton Williams will speak at this event.
• November 20 – 21 | National Association of Home Builders Mortgage Roundtable | New York City
  Stockton Williams will participate in this event.
• December 1 – 2 | 2021 Virtual Ohio Housing Conference
  Stockton Williams will speak at this event.

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