Weekly update from the National Housing Conference
News from Washington | By Luke Villalobos
FOMC raises rates by 0.75

The Federal Reserve raised the federal funds target range by 75 basis points at the Federal Open Market Committee’s (FOMC) November meeting. The rate increase is part of the FOMC’s effort to control inflation, and the move marks the fourth consecutive 75-basis-point increase. Rate hikes are impacting the housing market, with 30-year mortgage interest rates surpassing seven percent.
 
“Activity in the housing sector has weakened significantly, largely reflecting higher mortgage rates,” Federal Reserve Chair Jerome Powell said. Powell agreed the impact on housing is significant. “The housing market needs to get back into a balance between supply and demand,” Powell said. “We’re well aware of what’s going on there.”
OCC creates Office of Financial Technology

The Office of the Comptroller of the Currency (OCC) announced last Thursday that it’s establishing an Office of Financial Technology. A yet-to-be-named Chief Financial Technology Officer will run the office, launching early next year. The office’s stated goals are to help provide strategic leadership, vision, and perspective on the OCC’s financial technology (fintech) activities.
 
“Financial technology is changing rapidly and bank-fintech partnerships are likely to continue growing in number and complexity,” Acting Comptroller of the Currency Michael Hsu said. “To ensure that the federal banking system is safe, sound, and fair today and well into the future, we need to have a deep understanding of financial technology and the financial technology landscape.”
 
Earlier this year, FHFA also announced it’s establishing an Office of Financial Technology to respond to changing banking landscapes and fintech.
Capital Magnet Fund Coalition requests overhaul of CDFI Fund

The Capital Magnet Fund Coalition sent a letter to Deputy Assistant Secretary Poyo at the U.S. Department of Treasury on Friday requesting an overhaul of the Community Development Financial Institution (CDFI) Fund. The letter includes a broad range of recommendations to improve the fund to better meet the growing affordable housing need.

“The administrative complexity of the program lowers application demand and is inconsistent with the Administration’s Housing Supply Action Plan, which is focused on increasing federal support for affordable housing supply and preservation, including by simplifying and aligning federal housing requirements,” the letter states.

The letter recommends the CDFI Fund create a separate application category for smaller applicants and allocate no less than 10 percent of the year’s assessment to these groups, as well as using appropriations for its Capacity Building Initiative to provide training and technical assistance to the Capital Magnet Fund (CMF) program. It outlines additional recommendations regarding affordable homeownership and rental housing, leverage and program income, placed-in-service and project completion, service areas, and CMF administration.
HUD funding assessment of ERAP

On Thursday, HUD announced a $2 million award to fund an assessment of the impact of the Emergency Rental Assistance (ERA) program. The evidence-based review will focus on housing stability and eviction. “The insights gained through this research can help policymakers understand if the availability of ERA helped reduce eviction rates and improve other measures of housing stability while controlling for factors such as individual-level characteristics, neighborhood characteristics, trends in eviction, and local eviction moratoria,” Soloman Greene, principal deputy assistant secretary of HUD’s Office of Policy Development and Research, said.
Wells Fargo seeks Housing Affordability Philanthropy Leader

Wells Fargo is seeking a Housing Affordability Philanthropy Leader (Social Impact & Sustainability Executive). This full-time position is ideal for a leader with experience in homeownership and the role of rental housing in stabilizing communities. The role entails managing teams responsible for national and regional programming initiatives, developing strategies to align with social impact and sustainability initiatives, and overseeing philanthropy initiatives and marketing efforts. Interested candidates can submit their applications here.
HUD announces grant opportunities

The HUD Office of Multifamily Housing Programs announced a new application period for COVID-19 Supplemental Payment (CSP) funding. This funding will provide more than $148 million to multifamily property owners participating in assisted housing programs that address COVID-19 impacts on staff and residents. HUD Section 202 property participants, Section 811 housing for low- and very low-income persons with disabilities, and Section 8 rental assistance programs are eligible for reimbursements. Owners eligible for reimbursement may submit applications for expenses incurred within the operating periods announced from March 27, 2020, through Oct. 31, 2021, and Nov. 1, 2021, through Jan. 31, 2023.

Last week, HUD also announced a $1 million Notice of Funding Availability (NOFA) through the Hope VI Main Street Program. This program supports smaller communities in developing affordable housing projects that are undertaken in connection with a Main Street revitalization effort. Communities can replace vacant commercial spaces with affordable housing units and restore central business districts. Units of Local Governments with populations under 50,000 who are not served by a local or county/parish public housing agency that administers more than 100 physical public housing units within the local government’s jurisdiction are eligible to apply. The application deadline is Jan. 31, 2023.

“HUD recognizes that there is a need for revitalization across the country,” HUD Secretary Marcia Fudge said. “The Main Street program supports communities of all sizes and allows funding to fit the project.”
Rocket Mortgage launches manufactured housing loan option

On Tuesday, Rocket Mortgage announced it’s introducing a new conventional loan option for manufactured housing. The loan will apply to purchases and refinances of manufactured homes and provide a cost-effective option for homebuyers looking for an affordable mortgage. For example, homebuyers can use the financing to purchase a primary residence with 5 percent down or less or a second home with 10 percent down. The announcement notes that, according to the Manufactured Housing Institute, manufactured homes are a third of the cost of a site-built home on average.
 
“After revolutionizing the home loan experience for traditional site-built homes, we are proud to bring the technology and expert guidance Rocket is known for to those who are purchasing manufactured homes,” Rocket Mortgage CEO Bob Walters said. “It’s our hope that, through this new option, more Americans can realize their dream of homeownership.”
Chart of the week
Chart of the week: Bidding wars cooling off in housing market

Eric Finnigan, vice president of research and demographics at John Burns Real Estate Consulting, tweeted a chart examining the percentage of resale home purchase contracts receiving multiple offers. The data covers July 2021 through Sep. 2022 and shows bidding wars have dropped from a peak of 72 percent in March 2022 to 21 percent in Sep. 2022. This slowdown highlights the cooling of the housing market as interest rates rise.
What we're reading
An article in The Washington Post reports the pandemic created new homebuying opportunities for minority households, leading to a spike in homeownership for Black, Asian, and Latino homeowners in 2021. According to data from the Census Bureau, the increases are the sharpest since the Great Recession. While promising news, the slowing housing market has likely curtailed these trends.
 
The Bipartisan Policy Center published a blog post highlighting the Low-Income Housing Tax Credit and the proposed Neighborhood Homes Tax Credit (NHTC) as vital tools to increase the housing supply and address distressed housing. The post calls for Congress to pass the Neighborhood Homes Investment Act, which would create the NHTC, and the Affordable Housing Credit Improvement Act to “ameliorate the shortage of affordable housing and target a major source of the inflation experienced by consumers.” NHC supports the passage of both acts.
 
Freddie Mac published a new white paper examining high-opportunity areas for renters. The paper expands the FHFA’s definition of high-opportunity areas by considering local contexts. Key findings show FHFA classifies 19.5 percent of census tracts as high opportunity. Within those, 75.1 percent of households are homeowners, and 24.9 percent are renters. Freddie Mac’s methodology, though, finds the renter concentration is much higher (38.4 percent).
The week ahead
Monday, November 7
 
Tuesday, November 8
NAFCU Lending Conference, in Greenville, SC
 
Wednesday, November 9
NAFCU Lending Conference, in Greenville, SC
 
Thursday, November 10
NAFCU Lending Conference, in Greenville, SC
 
Friday, November 11
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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