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• Washington update – recent developments and what to expect in the coming months
• Presidential candidates’ housing plans
• State policy updates
• Cinnaire Advocacy in Action
• Presidential housing plans 

Washington Update

Recent Developments in Washington and What to Expect

Election season is well underway, making Washington relatively quiet for the time being. Before Congress adjourned for its August recess, however, we saw a flurry of activity, including a failed vote in the Senate on the bipartisan tax package that included two major Low-Income Housing Tax Credit (LIHTC) provisions. These provisions, based on the Affordable Housing Credit Improvement Act (AHCIA), would have created an additional 200,000 affordable homes. While the outcome of the vote was disappointing, it was expected given current political wrangling ahead of the November elections. Opposition was not centered around the LIHTC provisions, which enjoyed broad support on both sides of the aisle.

Congress will be back in session after Labor Day but will adjourn once again in October for the final month of campaigning. Before they leave town, Congress will need to pass legislation to keep federal agencies funded and will almost certainly punt spending decisions with a Continuing Resolution (CR) that maintains level funding until the fall or possibly next year when a new Congress takes charge. We have more detail on where things stand with appropriations discussions on affordable housing and community development programs below.

There has been some speculation that Congress could revisit the tax package or elements of it in the lame duck session after the elections. While theoretically possible, the outcome of the election will dictate the appetite in Washington for getting anything done.

As we have noted previously, this tax package and the debate around it is a prelude to 2025, when most provisions on the individual side of the tax code from the 2017 Tax Cuts and Jobs Act (TCJA) will sunset. The cost of simply extending these provisions is estimated to be north of $4 trillion, which would be the most expensive tax package in American history by a wide margin. This estimate does not reflect additional proposals recently put forth by the presidential candidates, including exempting tips and Social Security from income taxes, which will put additional fiscal pressure on tax negotiations.

Appropriations State of Play

While the Appropriations Committees made progress on their spending bills this summer, the House and Senate – controlled by Republicans and Democrats, respectively -- are working with very different topline spending numbers. Those discrepancies won’t be resolved before the September 30th, when the current federal spending bills expire. It is not clear how long the CR will last.

The Senate Appropriations Committee recently wrapped up its work on spending bills, which would provide some increases, including a significant bump for the CDFI Fund. Those bills will need to be reconciled with the House’s appropriations measures, which generally would cut housing and community development programs:

• HUD. The Senate’s bipartisan HUD spending bill proposes a 10% increase for HUD programs, including a significant increase for the HOME Investment Partnerships program.
• CDFI Fund. The Senate’s Financial Services and General Government (FSGG) bill also proposed a major increase for the CDFI Fund, from last year’s $324 million to $354 million. The House, meanwhile, proposed a cut to the Fund.
• USDA. The Senate’s Agriculture spending bill largely held the line on USDA programs, but expanded the important decoupling demonstration program that will be critical for the future of the USDA rural housing portfolio.

For final spending levels, stay tuned post-election.

Legislation Introduced to Clarify GSEs’ Ability to Invest in Multi-Investor Funds

Before Congress adjourned, a bipartisan group of Senators and House members introduced legislation to clarify the ability of the Government-Sponsored Enterprises (GSEs) -- Fannie Mae and Freddie Mac -- to invest in multi-investor funds. Uncertainty over whether the GSEs should be considered Tax-Exempt Controlled Entities (TECEs) under federal tax law forced Fannie Mae to exit multi-investor funds in 2022, resulting in the loss of a major investor with an outsized impact in rural communities.

The legislation would provide clarity for both Enterprises to invest in multi-investor funds. The legislation was introduced by Senators Mark Warner (D-VA), Jerry Moran (R-KS), and Todd Young (R-IN) in the Senate and Reps. Darin LaHood (R-IL) and Dan Kildee (D-MI) in the House.

"Rural communities face an unseen housing crisis that we work every day to address," said Mark McDaniel, President and CEO of Cinnaire. "This common-sense legislation will help us bring investment to create more quality housing options in rural America. We strongly endorse this bipartisan effort to make sure rural communities get the support they need to thrive."

In addition, the Senate Appropriations Committee included language in its Committee report that encourages Treasury to find a solution. 

Vice President Harris’s recently released economic plan and her recent campaign has a significant focus on housing, including proposed new major investments in affordable housing development. The plan calls for the creation of 3 million new homes to meet the lack of housing supply driving the housing cost crisis. To get there, the plan calls for boosting existing tax incentives like the Low-Income Housing Tax Credit, establishing a new Neighborhood Homes Credit, and a first-ever incentive for building starter homes. VP Harris also called for $25,000 in down-payment assistance for first-time home buyers and the establishment of a $40 billion fund to ease local barriers like exclusionary zoning. Notably, the plan does not include a cap on rents, which was recently proposed by the Biden Administration. 

While housing has become elevated as a political issue for the Harris campaign, the ability to act on any of these proposals, if elected, would depend on Congress. It won’t be easy. 

The GOP platform is much thinner on details but commits to “reduce mortgage rates by slashing Inflation, open limited portions of Federal Lands to allow for new home construction, promote homeownership through Tax Incentives and support for first-time buyers, and cut unnecessary Regulations that raise housing costs” Former President Trump and VP nominee J.D. Vance have blamed high housing costs on immigration. 

Cinnaire Advocacy in Action

Michigan Speaker of the House Joe Tate came to Cinnaire to meet with with Mark McDaniel, Jennifer Everhart, Sherita Smith, Anthony Winston, and J.T. Mackey in the Lansing office for an in-depth conversation about Cinnaire’s work across the state and in his district. Speaker Tate represents the 10^th District of Michigan which is home to River Crest Apartments and other developments supported by Cinnaire. Following the meeting, Speaker Tate joined the Cinnaire team at Allen Place to see our work firsthand.

In Delaware, Cinnaire partnered with several local non-profit organizations to host a Wilmington Mayoral Candidate Forum and a Delaware Gubernatorial Candidate Forum focused on economic development. Housing was a major topic of discussion at both forums, including the need for dedicated state funding for affordable housing. Dionna Sargent (pictured left with fellow hosts and participants of the mayoral candidate forum) led this work and sourced questions from our teams focused on housing.  

Cinnaire provided comments on several federal agency rulemakings or requests for input in July and August:

• FHFA Listening Session on the GSEs’ Underserved Markets plans. In July, Chris Neary provided comments at the Federal Housing Finance Agency's (FHFA) listening session on the Government-Sponsored Enterprises' (GSEs) proposed 2025-2027 Duty to Serve Underserved Markets Plans for rural housing. Our comments described Cinnaire's history and ongoing commitment to serve rural areas and the critical role that Fannie Mae plays in helping us do so. We underscored the need to resolve the TECE issue and encouraged more aggressive goals for the GSEs to meet the housing needs of rural communities, while thanking Fannie Mae for its work to resume investing in multi-investor funds. In addition, we noted the importance of addressing the looming 515 mortgage cliff and the need for equity/low-cost debt capital for CDFIs to address the needs of rural markets. We submitted a comment letter as well, which can be found here.
• FHFA Request for Input on the FHLBanks’ Affordable Housing Program (AHP). Cinnaire submitted a comment letter in response to a Request for Input (RFI) recently issued by FHFA seeking stakeholders' views on how to streamline the AHP competitive application process. Our letter is based on the direct experience and expertise of our team, especially Elisabeth Rask, who has deep experience with AHP. In addition to tangible recommendations on the AHP process, our letter also encourages greater coordination with existing resources for affordable housing development, including LIHTC and HOME.
• CMF Interim Final Rule. The CDFI Fund published an interim final rule that is aimed at making the CMF program easier to use and expand its reach. There were a few positive changes that Cinnaire requested in our comment letter last year. To read our comment letter, click here.

Vice President Harris’s campaign has focused on housing as an issue in recent weeks. Her economic plan proposed new major investments in affordable housing development. The plan calls for the creation of 3 million new homes to meet the lack of housing supply driving the housing cost crisis. To get there, the plan calls for boosting existing tax incentives like the Low-Income Housing Tax Credit, establishing a new Neighborhood Homes Credit, and a first-ever incentive for building starter homes. VP Harris also called for $25,000 in down-payment assistance for first-time home buyers and the establishment of a $40 billion fund to ease local barriers like exclusionary zoning. Notably, the plan does not include a cap on rents, which was recently proposed by the Biden Administration.

While housing has become elevated as a political issue for the Harris campaign, the ability to act on any of these proposals, if elected, would depend on Congress. It won’t be easy.

The GOP platform is much thinner on details but commits to “reduce mortgage rates by slashing Inflation, open limited portions of Federal Lands to allow for new home construction, promote homeownership through Tax Incentives and support for first-time buyers, and cut unnecessary Regulations that raise housing costs” Former President Trump and VP nominee J.D. Vance have blamed high housing costs on immigration.

Register to Vote

The General Election will be held on Tuesday, November 5, 2024. Voters will make consequential decisions and elect a new president, determine the balance of power in Congress, elect Governors and state lawmakers.

As the election draws near, now is the time to register to vote or update your voter registration if you have moved or changed names since the last election. Registration deadlines vary by state, click the button below to learn more about voter registration in your state.

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