Weekly update from the National Housing Conference
News from Washington | By Luke Villalobos
Senator Mark Warner calls for "bigger vision on housing" at NHC NAC; experts explore Special Purpose Credit Programs and Homeowner Assistance Fund lessons learned

This week NHC’s National Advisory Council (NAC) met for the first of our bi-annual meetings for 2022. We were joined by Senator Mark Warner who emphasized the need for bold and broad-based thinking on housing supply.  “We need a bigger vision on housing that goes beyond the current debate. Affordable housing goes beyond metro areas. We’re seeing supply shortages in rural areas, too.” Senator Warner said. The NAC is chaired by Steve Thomas of Federal Home Loan Bank of Chicago and former Deputy Secretary of Housing and Urban Development Pamela Patenaude, principal of Granite Housing Strategies, LLC.

A panel discussion on the investor side of affordable housing discussed the potential impact of Special Purpose Credit Programs (SCPCs). Panelists included Ramon Gomez of JP Morgan Chase, Jim Egan of Morgan Stanley, and Steve Schnall of Quontic Bank. The panel explored often siloed conversations between affordable housing investors and policymakers. “We are often talking about the same things on the Street, just using different vocabulary,” Thomas said.

Last week, the three banking regulators released a Notice of Proposed Rulemaking to modernize the Community Reinvest Act (CRA). The NPR requested comments on using SPCPs to address some of the historic disparities in mortgage lending to communities of color.  JP Morgan Chase’s Ramon Gomez explained “in the development of our SPCP, we needed to construct a program that went through much research to develop a holistic range of levers to support communities.” Chase’s current program serves 6700 minority census tracks and, among other things, offers grants to assist with down payment or closing costs on conventional FHA and VA loans, Gomez said.

A panel on Homeowner Assistance Fund (HAF) programs in Virginia and Puerto Rico examined best practices on implementation, including marketing and outreach and program design. Panelists Llewelyn Anderson of Virginia Housing and Blanca Fernandez of Puerto Rico Housing Finance Authority described programs that responded to vastly different housing market conditions pre-pandemic. “Before the pandemic the island had seen a major natural disaster with hurricane Maria and several earthquakes which caused widespread physical destruction to homes, businesses, and infrastructure,” Fernandez said. Anderson spoke about the innovations in outreach in program implementation. “There’s parts of Virginia where we don’t have offices, so access becomes a challenge.” Anderson shared photographs of Virginia Housing’s Mobile Mortgage Office that goes directly to consumers. “We’re taking applications for our mortgage relief program and have seen a lot of interest and people coming through the Mobile Mortgage van.”
Senate confirms Fed Board nominees

On Thursday, the Senate confirmed Jerome Powell for a second term as chairman of the Federal Reserve. Powell had significant bipartisan support, with 80 members voting in favor of his confirmation. As inflation continues to challenge the economy, Powell has signaled that the Fed will raise interest rates several more times before the year is up in an attempt to slow price increases.
The Senate also confirmed two historic nominees to serve on the Federal Reserve Board of Governors this week. Davidson College economist Phillip Jefferson will be the fourth Black man to serve on the Board, and Michigan State economist Lisa Cook will be the first Black woman to serve on the Board. National Fair Housing Alliance President and CEO Lisa Rice applauded Cook's confirmation in particular, calling it "another barrier-breaking moment in American history."
Senate confirms Gordon as FHA commissioner

The Senate confirmed Julia Gordon as HUD Assistant Secretary for Housing and Commissioner of the Federal Housing Administration on Wednesday. Gordon's confirmation has been long overdue for many housers, with her nomination having taken place nearly a year ago. She was confirmed on a party-line vote of 50-50, with the tiebreaking vote cast by Vice President Kamala Harris. 
NHC supported Gordon’s nomination and issued a statement on Thursday applauding the final decision, calling Gordon “the right person at the right time.”  Her experience includes serving as president of the National Community Stabilization Trust (NCST), working for the Center for American Progress, the Federal Housing Finance Agency, and the Center for Responsible Lending.
Senators introduce bills to allow SLFRF use for LIHTC and clarify manufactured housing energy standards

On Wednesday, Senators Patrick Leahy (D-VT) and Susan Collins (R-ME) introduced the Senate version of the LIHTC Financing Enabling Long-term Investment in Neighborhood Excellence (LIFELINE) Act that would enable the use of State and Local Fiscal Recovery Funds for LIHTC financing. The bill is a companion to the already introduced LIFELINE Act in the House by Representatives Alma Adams (D-NC) and David Rouzer (R-NC). The legislation would allow the funds to be loaned as soft financing, removing current barriers to their use for LIHTC projects.
Last week, the Manufactured Housing Affordability and Energy Efficiency Act of 2022 was introduced into the House of Representatives by David Kustoff (R-TN) and Larry Bucshon (R-IN). The bill seeks to clarify the process and standards for rulemaking establishing standards for energy efficiency in manufactured housing. The bill would also mandate that the Department of Housing and Urban Development be more involved with discussions surrounding energy efficiency for manufactured homes. 
FHFA joins green finance group

FHFA announced Wednesday that it joined the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). The network consists of central banks and financial supervisors that share best practices on environmental and climate risk management in the financial sector to support a sustainable economy. FHFA has noted that climate change is a priority concern, and its effects should be considered in the decision-making of its regulated entities, and had previously affirmed its commitment to addressing the impact of climate change on the housing finance system.
"FHFA recognizes that climate change poses a serious threat to the U.S. housing finance system," said FHFA Acting Director Sandra Thompson. "I look forward to working with NGFS members and contributing to its efforts as we confront these challenges."
HUD says broadband assistance does not count as income

HUD announced Monday that it would not count income received through the Bipartisan Infrastructure Act’s Affordable Connectivity broadband access program as income for the purposes of determining eligibility for HUD programs. HUD said that it had notified more than four million families receiving HUD assistance of the decision, which is intended to spur increased participation in the program.
“We are deeply committed to ensuring that communities have the necessary resources to thrive, especially when it comes to accessing reliable and affordable broadband coverage,” said HUD Secretary Marcia Fudge. “With today’s action, we are making it clear that eligible HUD households can get the financial help they need to equitably access broadband without losing access to critical HUD programs.”
CFPB issues guidance on credit discrimination

On Monday, the Consumer Financial Protection Bureau issued an advisory opinion on the coverage of the Equal Credit Opportunity Act (ECOA). The new opinion bars lenders from discriminating against customers not only during the application process, but also after they have received a loan. The advisory opinion acts as additional analysis to clarify ECOA, establishing that borrowers continue to be protected after applying for and receiving credit. It further requires lenders to provide adverse action notices to borrowers with existing credit. Adverse action notices help applicants and borrowers understand creditors' decisions, discouraging acts of discrimination. 
“Today’s advisory opinion and accompanying analysis makes clear that anti-discrimination protections do not vanish once a customer obtains a loan,” said CFPB Director Rohit Chopra.
Federal agencies issue new flood insurance Q&As

Five federal agencies released Q&A guidance on federal flood insurance law on Thursday, covering several technical topics related to flood insurance and lending in flood zones. The guidance is the latest entry in a series of Q&A-based documents released since 1997 by the federal agencies that regulate flood insurance, the Federal Reserve Board of Governors, Farm Credit Administration, FDIC, NCUA, and OCC.
This year's guidance clarifies changes to federal flood insurance law made by recent legislation, including the Biggert-Waters Flood Insurance Reform Act and the Homeowner Flood Insurance Affordability Act. The guidance has been reorganized to allow users to find answers more quickly.
HUD announces grants for eviction protection and FYI initiative

On Monday, HUD announced $20 million in new grants for its Eviction Protection Grant Program, which helps fund local agencies and nonprofits engaged in eviction prevention and diversion. The funding will be distributed in grants of between $1 million and $2.4 million to 11 agencies across ten states.
On Thursday, HUD announced a total of $1.4 million in grants to local housing authorities to provide housing assistance to foster youth. The funding, provided through HUD's Foster Youth to Independence (FYI) initiative, will be distributed to 26 agencies across 18 states.
Chart of the week
Millennials in prime homebuying years form most populous age cohort

Moody’s Analytics visualizes Census data showing that Millennials in their prime homebuying years form the country’s most populous age cohort, exacerbating housing shortages that are already acute due to supply challenges.
What we're reading
Seeking Alpha’s Steven Cress asks whether investors should buy housing stocks amid rising mortgage rates. Cress argues that housing supply shortages will make the market resilient even as rates rise, noting that “while it may seem counterintuitive with mortgage rates reaching 13-year highs of 5.64%, some housing stocks have outperformed most industries throughout COVID-19 and post-pandemic, offering portfolio diversification.”

working paper from the National Bureau of Economic Research makes the case for replacing traditional cost-benefit ratios and net social benefit ratios with a new Marginal Value of Public Funds (MVPF) metric when evaluating government policy. The paper argues that cost-benefit ratios fail to adequately capture long-run government savings from policies that increase taxes collected, and that net social benefit ratios assume that government budgets are largely fixed. The authors demonstrate how MVPF overcomes these limitations, calling it a “flexible and transparent method for measuring the welfare impacts of government policies.”
The National Multifamily Housing Council released its March 2022 Quarterly Survey of Apartment Construction and Development Activity. This inaugural survey received 38 responses from multifamily developers and construction firms, revealing the current struggles that developers are experiencing with rising materials costs. 92% of respondents reported repricing deals in the past three months, with increases averaging 25%. Lumber remains a volatile resource, with a price increase of 45% according to the data.
blog post from Zillow argues that the housing market has reached an “inflection point,” after which relaxed demand and increased supply will push it toward more stable conditions. “The pendulum might finally be starting to swing back toward a more balanced housing market, but it will take time to get there. And prospective buyers still won’t find much reason to cheer, as higher interest rates will keep homeownership costly, and slowing price growth is unlikely to end with falling prices.”
The week ahead
Monday, May 16
NLIHC: Our homes, our votes, 2:30 – 3:30 p.m. ET
MBA: MAA advocacy/mPact reception, 5 – 6:30 p.m. ET
Tuesday, May 17
Wednesday, May 18
Enterprise: Strategies for preservation, 10:30 – 11:30 a.m. ET
NCRC: Policy agenda briefing, 1:30 – 3 p.m. ET
NMHC: Emerging Leaders happy hour, 7:30 – 9 p.m. ET
Thursday, May 19
Friday, May 20
The National Housing Conference is a diverse continuum of affordable housing stakeholders that convene and collaborate through dialogue, advocacy, research, and education, to develop equitable solutions that serve our common interest.
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