NCSHA Washington Report | October 8, 2021

Don’t look now, but the Emergency Rental Assistance program may be emerging as one of the success stories in the federal response to the pandemic, for some unlikely and underreported reasons: the beginnings of intergovernmental cooperation that puts aside partisan finger-pointing, trades inflammatory rhetoric for implementable rules, and aligns assistance amounts with actual needs.

For months, the national coalition of state, local, and tribal ERA administrators NCSHA convened asked the federal government for greater clarity on federal rules that would help move assistance more quickly. Finally, in late August, the Treasury Department produced “new guidance” that responded to them. The results started showing up almost immediately in accelerated payments in states as diverse as Alabama, Colorado, and Rhode Island.

Last week, Treasury finally disclosed how it will interpret and enforce the ERA statute’s vague “reallocation” requirement, which was being widely misrepresented in the media as a hard deadline for rescinding funds from jurisdictions that hadn’t spent 65 percent of their first allocation by last Friday. Reporters hoping to fan the flames of partisan conflict have been eager to frame a commonsense, if confusingly written, statutory milestone as a basis for the federal government to punish cities and states — and by extension their at-risk renters.

It was never that.

In fact, Treasury’s overview of the reallocation process reflects the recommendations from the ERA administrators’ coalition in Treasury’s stated commitments to “provide grantees with advance notice and a fair process” for determining and making reallocation amounts, “implement reallocation gradually over a period of months,” and “strive to keep reallocated funds within the same state.”

Treasury’s rules make clear that ERA reallocation will be a collaborative process between the feds and state and local jurisdictions that aims to assess rental assistance needs on the ground and right-size funding amounts across communities as needed — goals all ERA grantees share. As LL Cool J might say: Don’t call it a clawback.

Treasury now acknowledges that “there are even some grantees that received more funding in their initial allocation than will realistically be needed in their jurisdiction in the next year.” State and local ERA programs should be measured on what matters most. As Marlena Gibson of the Delaware State Housing Authority told a reporter this week, “In Delaware we are tracking our performance against estimates of need, on rental delinquency, and the number of applications that we have in progress and processing those.” Overall, the majority of state ERA programs have already funded more than half the applications they have received.

While we have some concerns about details of the Treasury reallocation rules, states report highly constructive outreach from the Treasury ERA team on them so far. As assistance allocations are gradually right-sized, grantees continue to accelerate payments, and more and more renters and landlords get help they desperately need, a truer picture of ERA performance and performers will come into focus.

Will the media still be interested?

Stockton Williams | Executive Director 

State HFA Emergency Housing Assistance

In This Issue

• • Congress Passes Continuing Resolution to Keep Government Open
  • Democrats Work to Develop Reconciliation Bill That Can Pass
  • Treasury Details Emergency Rental Assistance Reallocation Process
  • HUD Extends Covid-Related HOME Waivers and Extensions
  • HUD Requires PHAs and PBRA Owners to Provide Notice, Assistance Information Before Evicting Tenants
  • HUD Adds Covid Forbearance Options
  • Banking Committee Senators Introduce Down Payment Assistance Bill
  • Banking Committee Approves Several HUD Nominees, Holds Hearing on Others
  • HUD Solicits New Members for Housing Counseling Federal Advisory Committee
  • NCSHA in the News
  • Looking Ahead

Congress Passes Continuing Resolution to Keep Government Open
Congress passed and President Biden signed a continuing resolution (CR) on September 30 to fund the federal government through December 3. The CR will keep the federal government running past the end of fiscal year (FY) 2021 while Congress works to approve its FY 2022 appropriations bills. The CR largely funds all agencies and programs at their FY 2021 funding levels and provides an additional $35 billion to assist disaster victims and refugees from Afghanistan. The CR does not address the nation’s debt limit, which is being considered separately.

Democrats Work to Develop Reconciliation Bill That Can Pass
Democratic leaders, working with the White House, continue negotiations over reconciliation legislation that would carry much of the social policy portion of the Build Back Better agenda. To date, there is no agreement on a topline spending amount or which provisions definitely will be included or excluded. Late last week, Senator Joe Manchin (D-WV) said he would not support spending in excess of $1.5 trillion. News sources have reported that President Biden told members of the House Progressive Caucus the final bill would be between $1.5 and $2.2 trillion. Whatever the number, it is likely to be far lower than the $3.5 trillion progressives have been pushing and the budget resolution allows. That means many programs may be cut or eliminated altogether. 

To maintain our affordable housing priorities in the bill, it is crucial that HFAs and their partners continue to press their members of Congress to prioritize housing. Only members’ topmost priorities — ones they communicate directly to their leadership — will make the cut. NCSHA is particularly focused on protecting as much as possible of the $34.77 billion provided for HOME in the House Financial Services Committee-reported reconciliation bill and investments in Housing Credit production and preservation provisions related to closing the qualified contract loophole and protecting the nonprofit right of first refusal.

Treasury Details Emergency Rental Assistance Reallocation Process
This week, the Treasury Department published the framework for reallocation of Emergency Rental Assistance (ERA) program funds authorized by the Consolidated Appropriations Act of 2021 (ERA 1). The law requires Treasury to identify “excess funds” from amounts grantees have not obligated beginning September 30, 2021, and to reallocate those funds to grantees who have obligated at least 65 percent of their initial ERA 1 allocation. Treasury will look at the percentage of its total grant that each grantee has spent (the grantee’s expenditure ratio) and compare it to a minimum expenditure ratio. To start, the minimum expenditure ratio will be 30 percent. A grantee who has spent less than 30 percent of their funds could have the difference between the grantee’s expenditure ratio and 30 percent of their grant recaptured and reallocated to other grantees. Treasury will repeat this process every two months until March 31, 2022, increasing the minimum expenditure ratio by five percent each month. For more information on the reallocation process, see NCSHA’s blog.

HUD Extends Covid-Related HOME Waivers and Extensions
On September 28, the Department of Housing and Urban Development (HUD) posted a memorandum that extends and revises several suspensions and waivers of HOME Investment Partnerships program (HOME) regulations HUD previously issued in response to the Covid-19 pandemic. HUD originally published the waivers and program rule suspensions in April 2020. A December 2020 memorandum extended the waivers and exemptions through September 2021. The September 28 memo includes an extension of the waiver of its on-site inspection requirements for HOME-assisted properties and for properties receiving HOME-funded tenant-based rental assistance through the end of 2021 and extends the time period participating jurisdictions (PJs) have to complete those inspections not conducted during the pandemic from 120 days to 180 days after the waiver concludes. Extending the inspection requirement waivers and giving PJs more time to conduct inspections missed during the pandemic were top priorities for NCSHA. For information on all Covid-related HOME waivers and suspensions, please see NCSHA’s blog.

HUD Requires PHAs and PBRA Owners to Provide Notice, Assistance Information Before Evicting Tenants
HUD released this week an interim final rule that allows it to require housing providers participating in public housing and project-based rental assistance (PBRA) programs to provide tenants facing eviction at least 30 days’ notice and information about the opportunity to secure emergency funding and additional time to secure such funding prior to eviction. The rule, which is effective November 8, is intended to apply when federal aid has been made available to assist tenants in paying rent during a national emergency such as the Covid-19 pandemic. HUD has determined that good cause exists to release this interim final rule without giving prior notice and soliciting public input. HUD’s Offices of Housing and Public and Indian Housing also published a housing notice with information about how owners and managers of multifamily properties should reference Emergency Rental Assistance funds and an example addendum that can be added to a lease termination notice.

HUD Adds Covid Forbearance Options
On September 27, HUD issued Mortgagee Letter (ML) 2021-24, which provides up to six months of Covid-19 forbearance for borrowers who request their initial Covid-19 forbearance between October 1, 2021, and the end of the Covid-19 National Emergency. The ML also provides an additional six months of forbearance if the forbearance is exhausted or expires before the end of the Covid-19 National Emergency. Per this ML, no Covid-19 forbearance period may extend beyond six months after the end of the Covid-19 National Emergency or September 30, 2022, whichever is later.

Banking Committee Senators Introduce Down Payment Assistance Bill
Senate Banking Committee member Raphael Warnock (D-GA) introduced late last week the Downpayment Toward Equity Act. The legislation, which is nearly identical to a bill introduced earlier this year by House Financial Services Chairwoman Maxine Waters (D-CA), would establish a new HUD grant program, administered through state agencies and other eligible entities, to help first-generation home buyers purchase a home through down payment and closing cost assistance and subsidies to reduce interest rates. NCSHA summarized the House version of the legislation in more detail here. The bill is cosponsored by Banking Committee Chair Sherrod Brown (D-OH) and committee members Tim Kaine (D-VA), Chris Van Hollen (D-MD), Elizabeth Warren (D-MA), and Mark Warner (D-VA). Warnock, Warner, Kaine, Van Hollen, and Jon Ossoff (D-GA) also introduced legislation last month, the Low-Income First Time Homebuyers (LIFT) Act, that would set up a new program to help Federal Housing Administration borrowers afford 20-year mortgages.

Banking Committee Approves Several HUD Nominees, Holds Hearing on Others
The Senate Banking Committee on Tuesday voted to favorably report three of President Biden’s nominees to take leadership roles at HUD: Julia Gordon for Assistant Secretary of Housing and Urban Development and Commissioner of the Federal Housing Administration, David Uejio for Assistant Secretary for Fair Housing and Equal Opportunity, and Solomon Greene as Assistant Secretary for Policy Development and Research. Each of the nominees advanced on a party-line vote of 12-12, with all Democrats voting in favor and Republicans opposed (under the rules of the current Senate, each party has an equal number of representatives on each committee, and tied votes are considered to be approvals). It is not yet known when the full Senate will consider these nominations. NCSHA has previously written letters to committee leaders expressing our support for Gordon and Greene.

On Thursday, the committee held a hearing to consider three new HUD nominees: Alanna McCargo as President of Ginnie Mae, James Arthur Jemsion as Assistant Secretary for Public and Indian Housing, and Mark Colon as Assistant Secretary for Community Planning and Development. Committee Chair Sherrod Brown (D-OH) and other committee Democrats made largely favorable comments about the nominees, while committee Republicans expressed concerns about their past job performance and social media activity.

HUD Solicits New Members for Housing Counseling Federal Advisory Committee
HUD on Tuesday published an update in the Federal Register regarding the Housing Counseling Federal Advisory Committee (HCFAC). The update includes the names of the six newest members who were appointed to three-year terms starting September 14, as well as one returning member who was appointed for another three-year term, beginning on the same date. HUD also is soliciting nominations to fill an additional four openings on HCFAC. The department is seeking individuals with experience in at least one of these four categories: the mortgage industry, the real estate industry, consumer advocacy, or HUD-approved housing counseling agencies. Nominations can be submitted by members of the public, federal agency officials, and members of Congress. Self-nominations are accepted. Applications and more information about HCFAC’s work are available here.

NCSHA in the News
New York Daily News, 10.5.21, The right way to legalize accessory dwelling units
Novogradac Journal of Tax Credits Volume 12 Issue 10, 10.1.21, Low-Income Housing Tax Credits News Briefs – October 2021

Looking Ahead…

Legislative and Regulatory Activities

• October 11 | Comments Due to NCSHA | FHFA Request for Input on Fannie Mae’s and Freddie Mac’s Equitable Finance Plans
• October 11 | Comments Due to NCSHA | FHFA Proposed Affordable Housing Goals for Fannie Mae and Freddie Mac
• October 15 | Comments Due to NCSHA | OCC Proposed Rule on the Community Reinvestment Act
• 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 29 | Comments Due | OCC Proposed Rule on the Community Reinvestment Act
• 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 13 | NAR Policy Forum Series: The Impact of Student Loan Debt: Examining the Burden and Finding Solutions | Virtual
  Stockton Williams will speak at this event.
• October 15 | Deploying the Homeowner Assistance Fund: How States Can Get Help to Those Who Need It Most | Virtual
  Stockton Williams will speak at this event.
• 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 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 Solutions Annual User Conference | Virtual
  Jennifer Schwartz will speak at this event.
• November 10 – 12 | Virginia Governor’s Housing Conference | Norfolk
• November 18 – 19 | NAHB 2021 Mortgage Roundtable Meeting
  Stockton Williams will speak at this event.

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