NCSHA Washington Report | October 22, 2021

Planning edicts from federal regulators tend to get bureaucratic and interest group wheels spinning without necessarily leading to any actual movement. The Federal Housing Finance Agency’s directive to Fannie and Freddie to produce “equitable housing finance plans” may be an exception.

We hope so.

We were among the earliest to observe that FHFA Acting Director Sandra Thompson was wasting no time in refocusing the GSEs on their affordable housing responsibilities. From the jump, Thompson linked that objective to a larger goal.

“In her first statement as acting director,” Housing Wire reported in August, “Thompson drew attention to the ‘widespread lack of affordable housing and access to credit, especially in communities of color.’” FHFA’s actions in Thompson’s young tenure to expand Fannie and Freddie’s “housing goals,” collaborate with HUD on fair housing and lending enforcement, and broaden eligibility for refinances of GSE-backed mortgages are as much about equity as they are about affordability.

In this context, FHFA’s requirement that Fannie and Freddie by the end of the year lay out “objectives, measurable goals, and planned meaningful actions for … reducing the racial or ethnic homeownership gap and [r]educing underinvestment or undervaluation in formerly redlined areas that remain racially or ethnically concentrated areas of poverty or otherwise underserved or undervalued,” could be transformative.

The recommendations NCSHA will submit Monday for what Fannie and Freddie should do will describe what they readily can do in partnership with HFAs to help realize a transformation.

Our recommendations will say the Center for Responsible Lending has already shown loan level price adjustments on GSE mortgages “disproportionately impact potential homebuyers of color and low-to-moderate income families, whose ability to save for down payments and credit profiles have been negatively impacted by discrimination and lack of opportunity in the mortgage market.”

And they will point out the GSEs already have existing offerings that waive LLPAs for qualified borrowers participating in HFA programs, which could immediately be expanded as part of a deeper commitment to racial equity.

NCSHA’s recommendations will say the Urban Institute has already demonstrated that “[i]ncreasing the visibility of and access to down payment assistance will especially benefit young black homebuyers, who are less likely to receive parental support when purchasing a home than white young adults.”

And they will point out that, in state HFAs, the GSEs have a nationwide infrastructure to scale-up down payment assistance and get more of it where it is most needed.

NCSHA’s recommendations also will detail ways HFAs can help Fannie and Freddie address the racial and ethnic inequities at the heart of the student loan debt crisis, affordable housing supply shortage, and devaluation of neighborhoods of color.

It’s long past time for more reports, task forces, and conferences. And for plans that are empty promises.

It’s time for action.

Stockton Williams | Executive Director 

State HFA Emergency Housing Assistance

In This Issue

• • Build Back Better Agenda at Crucial Point — NCSHA Calls on All Housing Stakeholders to Push for Housing Credit, HOME
  • NCSHA Joins New Coalition to Improve Fannie Mae, Freddie Mac Duty to Serve System
  • NCSHA Participates in HUD Fair Housing Listening Sessions
  • IRS Allocates $7.8 Million in Housing Credit National Pool Credits
  • Senate Appropriations Committee Releases Draft FY 2022 HUD Appropriations Bill
  • House Financial Services Committee Holds Hearing Highlighting Housing’s Impact on Personal Well-Being
  • NCSHA in the News
  • Looking Ahead

Build Back Better Agenda at Crucial Point — NCSHA Calls on All Housing Stakeholders to Push for Housing Credit, HOME
Congress and the administration are making key decisions now on the size and scope of the reconciliation legislation that will be the basis for the social policy portions of the president’s Build Back Better agenda. NCSHA and HFAs have been engaging consistently with Congressional leaders and key players in the administration in support of our priorities, especially the Housing Credit on the tax side and the HOME program on the spending side. But these programs and all affordable housing are at risk as Congress works to reduce the bill’s size and scope to something that is passable given the Democrats’ slim majorities in both chambers. If you haven’t made a call to your Democratic members of Congress, do it now. If you have called, but that call wasn’t made in the last 48 hours, call again. Urge your Democratic House and Senate members to reach out personally to their leadership in Congress and — most importantly — to the White House to make sure the Housing Credit and HOME are in this bill. Remind them that, if the Housing Credit is not expanded, it faces a 12.5 percent cut, as the temporary cap increase we won in 2018 expires this year. 

NCSHA Joins New Coalition to Improve Fannie Mae, Freddie Mac Duty to Serve System
Twenty leading affordable housing organizations, including NCSHA, announced October 21 they have created the Underserved Mortgage Markets Coalition (UMMC) to encourage the Federal Housing Finance Agency, Fannie Mae, and Freddie Mac to establish strong and effective Duty to Serve plans. The Duty to Serve regulation requires Fannie Mae and Freddie Mac to facilitate housing opportunities in manufactured housing, affordable housing preservation, and rural housing. As its first public act, the UMMC sent FHFA Acting Director Sandra Thompson a letter urging FHFA to improve the Duty to Serve regulations and supporting FHFA’s new initiative requiring Fannie Mae and Freddie Mac to create plans to reduce racial or ethnic homeownership gaps. Other members of the UMMC include the Lincoln Institute of Land Policy, which convened the coalition; Enterprise Community Partners; Local Initiatives Support Corporation; National Housing Conference; National Housing Trust; and NeighborWorks America.

NCSHA Participates in HUD Fair Housing Listening Sessions
As reported in last week’s Washington Report, HUD held three listening sessions this week and last to hear from stakeholders on issues related to Affirmatively Furthering Fair Housing (AFFH) and the rulemaking process on it HUD is poised to restart. In addition to providing brief comments during the first listening session, focused on the nexus between fair housing planning and other HUD planning processes and on stakeholder engagement, NCSHA made more detailed comments at the second listening session, which focused on data analysis, regional cooperation, and linkages between AFFH and non-HUD programs.

NCSHA urged HUD to again develop a separate assessment tool for state-level entities, rather than requiring states to follow a framework designed with local program administrators in mind; raised concerns about the statistical accuracy of some national data sets for rural areas; asked HUD to provide clarity on how overlapping jurisdictions should comply with AFFH planning processes; and noted that the administration should not issue a separate AFFH plan requirement for the Housing Credit but rather should require state grantees to point to how furthering fair housing is integrated into their Qualified Allocation Plans as part of their HUD fair housing planning efforts. NCSHA participated in, but did not speak at, the third listening session, focused on HUD review of fair housing plans.

IRS Allocates $7.8 Million in Housing Credit National Pool Credits
This week, the Internal Revenue Service published Revenue Procedure 2021-44, allocating the national pool of unused Housing Credit authority for calendar year 2021. Twenty-nine states qualified for the national pool this year and share $7.8 million in additional Credit authority. 

Senate Appropriations Committee Releases Draft FY 2022 HUD Appropriations Bill 
The Senate Appropriations Committee released nine fiscal year (FY) 2022 appropriations bills on October 18, including the Transportation, Housing and Urban Development, and Related Agencies (THUD) appropriations bill. The bill increases funding over FY 2021 enacted levels for many HUD programs, including the HOME Investment Partnerships program and Section 8 rental assistance. For most programs, however, funding levels are lower than those included in the House-passed omnibus appropriations bill, H.R. 4502.

A continuing resolution (CR) funding federal agencies is in effect until December 3. Congress must either approve the FY 2022 appropriations bills or pass another CR by then to avoid a government shutdown. Republican committee members objected to the proposed FY 2022 bills because the percentage increase in non-defense discretionary spending is higher than the percentage increase in defense discretionary spending, whereas they are seeking parity between the two. For more information on the Senate committee-proposed bills, see NCSHA’s blog.

House Financial Services Committee Holds Hearing Highlighting Housing’s Impact on Personal Well-Being
The House Financial Services Committee Thursday held a hearing to discuss how access to affordable housing is critical to helping people succeed economically and live healthy lives. Committee Chair Maxine Waters (D-CA) made it clear that one of the hearing’s purposes was to underscore how important it is that substantial funding for housing programs be included in the final version of the Build Back Better Act, which currently is being considered by congressional leaders. In her opening statement, Waters touted the committee-passed funding for numerous housing programs including HOME, Section 8, and a new federal down payment assistance fund. Ranking Member Patrick McHenry (R-NC) and other committee Republicans questioned the need for the hearing, arguing that committee Democrats would be better off talking with congressional leadership and the White House about what they would like to see included in the Build Back Better Act, and contended it was detracting from the committee’s oversight obligations.

NCSHA in the News
WIS News, 10.21.21, New Coalition of Leading Affordable Housing Advocates Appeals for Meaningful GSE Duty to Serve Plans
Housing Wire, 10.15.21, Which of the competing housing bills will make the cut?

Looking Ahead…

Legislative and Regulatory Activities

• 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 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 1 – 5 | Council of Development Finance Agencies 2021 Virtual Summit
  Greg Zagorski will speak at this event.
• November 4 | 8th National Housing Mobility Conference | Virtual
• 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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