The FHFA released its 2023 conforming loan limit (CLL) values for mortgages acquired by Fannie Mae and Freddie Mac. Loan limits in high-cost areas will exceed $1 million.

For most states, the CLLs are set at $726,200. That’s an increase of $79,000 from the 2022 CLL of $647,200. For high-cost areas, where 115 percent of the local median home values exceed the baseline CLL, the new ceiling for one-unit properties is $1,089,300. That’s an increase from the 2022 limit of $970,800. Rising home values triggered higher limits in all but two U.S. counties. The FHFA’s announcement noted that house prices increased 12.21 percent on average between Q3 2021 and Q3 2022.

While some mortgage lenders praised the higher limits for enabling more people to take advantage of Fannie and Freddie financing, some industry groups expressed concerns that excessively high loan limits may exacerbate the affordability crisis, the current system is overly reliant on government backing, and private capital needs to have a more meaningful role.

Two major home price indices came out this week, the S&P CoreLogic Case-Shiller Indices and FHFA’s House Price Index (FHFA HPI). The Case Shiller index showed a continuation of short-term declines and medium-term deceleration in home prices in September.

According to FHFA’s HPI, house prices rose 12.4 percent year-over-year from Q3 2021 to Q3 2022. House prices were up 0.1 percent compared to Q2 2022. Prices rose in all 50 states and the District of Columbia, with Florida, South Carolina, Tennessee, North Carolina, and Georgia experiencing the highest annual appreciation. The District of Columbia, Oregon, California, Minnesota, and Louisiana received the lowest appreciation. The South Atlantic division had the strongest fourth-quarter appreciation, rising 17 percent year-over-year in Q3.

“House prices were flat for the third quarter but continued to remain above levels from a year ago,” said FHFA Supervisory Economist William Doerner. “The rate of U.S. house price growth has substantially decelerated. This deceleration is widespread with about one-third of all states and metropolitan statistical areas registering annual growth below 10 percent.”

On Monday, the HOME Coalition sent a letter to Democratic and Republican leadership of both Congressional chambers’ appropriations committees, urging them to provide robust funding for the HOME Investment Partnerships (HOME) program for FY 2023. The coalition represents 44 national, state, and local organizations including the National Housing Conference. The coalition supports $2.5 billion in funding for HUD’s HOME Investment Partnerships Program. The letter asks Congress to fund HOME at no less than $1.9 billion, the same amount requested by the Administration for FY 2023.

The letter cites fewer affordable homes and rising prices as challenges for low-income households and the flexibility of HOME in helping to address these persisting issues. “HOME—our most flexible affordable housing program, which can be tailored to meet local needs—is such an important tool. While some areas need more new construction of affordable rental housing, others may have an existing rental housing stock that just needs rehabilitation. Still others most need single-family starter homes. HOME is the one resource that can do all these things,” the letter states.

NAREB hosted its Black Housing Summit at Howard University this week, during which it released its latest State of Housing in Black America (SHIBA) report. The report provides a scope of the state of Black homeownership and housing equity benchmarks. It includes an analysis of 2021 Home Mortgage Disclosure Act data, which shows Black applicants received only 7 percent of all mortgage originations. And Black homebuyers experienced a denial rate of 20 percent, compared to 8 percent for white applicants. Black consumers remain disproportionately under-represented among borrowers and continue to rely on high-cost loans for entry into homeownership. As historic gaps persist, Black millennial applicants are experiencing disproportionate disadvantages in the current market, with growing interest rates, home prices, lack of housing inventory, and student debt all dampening their home-buying prospects. While these homebuyers contributed to the increase in Black homeownership rates between 2020 and 2021, Black millennial homeownership lags behind the rates of previous generations.

Recommendations in the SHIBA report include eliminating loan-level price adjustments, eliminating penalty fees to access down payment assistance, reevaluating student loan debt’s impact on debt-to-income calculations, leveraging Special Purpose Credit Programs, and more. In highlighting and designing comprehensive recommendations and actions to address existing disparities, the report tries to help more Black households achieve homeownership. “Our 2022 SHIBA report is designed to shed light on many of the issues centered on neighborhood blight, environmental discrimination, and disaster recovery for Blacks,” wrote NAREB President Lydia Pope. “Its insights, perspectives, data points, and recommended solutions are key to our ability to learn from the past, observe the present and prepare for the future.”

The National Urban League and Wells Fargo announced the Diverse Appraiser Initiative, which seeks to diversify the home appraisal industry and reduce barriers to entry into the field. The announcement noted a longstanding lack of diversity among appraisers, often leading to appraisal bias. HUD’s PAVE Action Plan and the National Fair Housing Alliance’s analysis of appraisal bias reports both include the need for a more diverse workforce as a recommendation to address systematic bias. This new collaborative effort will provide training and support in business basics to help trainees complete the certification process through Urban League Entrepreneurship Centers.

“Racial discrimination in the home appraisal industry is a significant barrier to economic equity,” said Marc Morial, National Urban League president and CEO. “We’re proud to partner with Wells Fargo on this innovative project to open the doors of opportunity and bring a much-needed new approach to diversity, equity, and inclusion that we hope will serve as inspiration to others in the field and beyond.”

HUD released a proposal for the Section 184 Indian Home Loan Guarantee Program to provide homeownership opportunities in Indian Country. The proposal would provide clarity to lenders by modernizing regulations and program requirements. Provisions included in the rule seek to clarify requirements for tribes, eligible borrowers, properties, and loan types. The proposal also outlines requirements for servicers for the Section 184 loan and what is required for loss mitigation when a loan defaults. Additional provisions address claim requirements and HUD’s ability to conduct reviews, reporting, and sanctions for noncompliance with regulations.

“By setting requirements, attracting more lenders, and setting a minimum standard of lending, we are taking steps to make homeownership a reality for American Indian and Alaska Native individuals and families,” said HUD Secretary Marcia Fudge. Comments for the proposed rule are due by March 6, 2023.

Last week, the White House hosted its 2022 Tribal Nations Summit during Native American Heritage Month. The event featured speakers from many federal agencies. For example, USDA highlighted its continued commitment to Indian Country and shared a comprehensive list of the agency’s Indian Country accomplishments and stated its commitment to “empower tribal self-determination, promote equity and remove barriers to service and programs, and incorporate Indigenous perspectives.”

Deputy Secretary of the Treasury Wally Adeyemo spoke about Treasury’s efforts to support Tribal communities by distributing American Rescue Plan funds. He described a “three-prong approach” to address challenges in Indian Country: supporting tribal governments, Native CDFIs, and tribal and Native businesses.

At the Summit, HUD Secretary Marcia Fudge launched the first-ever Tribal Intergovernmental Advisory Committee (TIAC). Committee members will advise and coordinate policy on the housing priorities of American Indians and Alaska Natives across all HUD programs. See here for the complete list of committee members.

HUD and the U.S. Census Bureau released the latest Rental Housing Finance Survey, reviewing the country’s 49.5 million rental housing units. According to the survey, individual investors own 70 percent of small rental properties and 86 percent of rental properties contain only one unit. In addition, nearly 46 percent of all rental properties have one-to-four units.

From the national level findings, the median estimated market value per rental is $175,000, with a median purchase price of $99,000 per rental unit. See here for highlights of the full survey findings.