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Weekly update from the National Housing Conference
News from Washington
Congress deliberates stimulus package as deadline approaches

The $908 billion stimulus proposal introduced by more than a dozen bipartisan members of Congress on Tuesday is serving as a starting point for negotiations around a new stimulus package, which may be tied to a spending bill, in advance of the Dec. 11 funding deadline and the Dec. 31 eviction moratorium deadline. The proposal, which would fund second draw loans under the Paycheck Protection Program, extend unemployment benefits, provide $160 billion in new funding for states and localities in addition to $25 billion towards rental assistance, has been backed by Speaker of the House Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.).

“While we made a new offer to Leader McConnell and Leader McCarthy on Monday, in the spirit of compromise we believe the bipartisan framework introduced by Senators yesterday should be used as the basis for immediate bipartisan, bicameral negotiations,” Rep. Pelosi and Sen. Schumer said in a statement. “Of course, we and others will offer improvements, but the need to act is immediate and we believe that with good-faith negotiations we could come to an agreement.”

On Tuesday, Senate Majority Leader Mitch McConnell (R-Ky.) shared his proposal for a smaller $500 billion package. Members on both sides of the aisle, as well as Secretary Mnuchin and Chairman Powell have urged congressional leaders to pass a stimulus package as soon as possible.
NHC welcomes new members!
NeighborWorks Capital is a national nonprofit and certified Community Development Financial Institution serving NeighborWorks America’s member organizations by delivering the flexible capital needed to provide affordable homes and strengthen communities. 

The Home Builders Institute is a national leader in career training in the building industry, providing students the skills and experience they need for successful careers through pre-apprenticeship training, job placement services, mentoring, certification programs, textbooks and curricula.
Homeownership key to closing the Black wealth gap

A new report published by the Urban Institute looks at the central role of homeownership in building lasting and multigenerational wealth for Black households. “Closing the Gaps: Building Black wealth through homeownership” examines the wealth gap for Black and Hispanic households compared to White households, which exceeds income disparities.

“Homeownership plays a bigger role in creating wealth for Black families than it does for White families,” authors Alanna McCargo, Urban Institute vice president of housing finance policy, and Jung Hyun Choi, research associate, write. Because housing equity accounts for almost 60% of net worth for Black households compared to 43% for White households, the report says homeownership – although it “should not be the only focus of public policy and wealth building for Black households” – is a “solid foundation for building wealth.” The report also warns that Black households have been disproportionately impacted by COVID-19; “The pandemic is shining a light on inequality in health care, housing, and education. Black and Hispanic households represent the most financially vulnerable and housing insecure, as they are disproportionately represented in the industries hardest hit by job losses.”

Throughout 2020, NHC’s Black Homeownership Working Group has been working on a 12-point plan to close the Black homeownership gap by addressing obstacles to homeownership and policies that worsen racial wealth disparities. In the new year, NHC will formalize its plan to increase Black homeownership by 3 million households by 2030. NHC’s recent Solutions for Affordable Housing convening also featured a panel discussion of opportunities to support existing and future Black homeowners under the new administration.
Mnuchin, Powell and Rep. Waters weigh in on GSE conservatorship

On Tuesday, the Senate Banking Committee convened a hearing to review CARES Act implementation with Treasury Secretary Steven Mnuchin and Federal Reserve Board Chairman Jerome Powell. The conversation turned to GSE reform when Sen. Mike Rounds (R-S.D.) asked Secretary Mnuchin to comment on the appropriate timeline for release from conservatorship.

“Housing has been one of the bright spots of our economy during the pandemic and I want to make sure that we do everything we can to continue providing the necessary support,” said Sen. Rounds. “I am concerned that if recent conversations come to fruition and Fannie and Freddie are prematurely released from the Federal Housing Finance Agency's (FHFA) control the strength we’ve seen in the housing sector could be called into question.” Mnuchin responded saying, “I don’t think they should be let out from conservatorship without appropriate capital.” With respect to timing, Mnuchin said the “appropriate scenario” includes the accumulation of real capital and eventual release.

Sen. Rounds also asked Chairman Powell to comment on the impact to the housing market if an end to conservatorship occurred during the pandemic or post-pandemic recovery. Powell echoed Mnuchin’s comments, saying he’d “like to see the GSEs return to private hands over time…time needs to be taken.”

Later in the week House Financial Services Committee Chair Maxine Waters (D-Calif.) weighed into the discussion, sending a letter to FHFA Director Mark Calabria urging him “to fully engage with Congress, halt all efforts to raise the capital requirements for Fannie Mae and Freddie Mac and halt all efforts to release them from conservatorship.”
FHFA and HUD raise 2021 loan limits

Both FHFA and the Department of Housing and Urban Development (HUD) published new loan limits that will go into effect on Jan. 1. FHFA raised the maximum conforming loan limit for single-family mortgages backed by Fannie Mae and Freddie Mac from $510,400 in 2020 to $548,250 in 2021. FHFA also raised the ceiling for high-cost areas to $822,375. The increases reflect the more than 7% jump in home prices from the third quarter of 2019 to the third quarter of 2020, recorded by the FHFA House Price Index. “With home prices setting records in many U.S. markets, the National Association of REALTORS® (NAR) is pleased to see FHFA raise its national conforming loan limits for 2021,” said NAR President Charlie Oppler.

Shortly after FHFA’s release, HUD announced the new 2021 loan limits for Federal Housing Administration (FHA) mortgages. FHA increased its floor to $356,362 and its high-cost ceiling to $822,375. Assistant Secretary for Housing and Federal Housing Commissioner Dana Wade called into question the historically high loan limits, which have increased steadily in recent years. These increases have put FHA “in a position to serve a segment of borrowers [who] may be better-served by the conventional market,” said Wade. “FHA’s mission is to support low-to-moderate income borrowers, so why does the law permit FHA to insure mortgages up to $822,375? This is a question for Congress and the taxpayers who stand behind FHA to answer.”
FHFA extends foreclosure moratorium through end of January

FHFA announced the extension of its moratorium on foreclosures of single-family mortgages backed by Fannie Mae and Freddie Mac. The protections also extend to evictions for real estate owned properties. The moratorium was set to expire on Dec. 31 but has been extended through Jan. 31.

“Extending Fannie Mae and Freddie Mac's foreclosure and eviction moratoriums through January 2021 keeps borrowers safe during the pandemic," said FHFA Director Mark Calabria. “This extension gives peace of mind to the more than 28 million homeowners with an Enterprise-backed mortgage."

HUD's foreclosure moratorium is still scheduled to expire at the end of December. Throughout the pandemic, the two agencies have been relatively aligned in their extensions of the moratoria.
Chart of the week
Chart of the week: Increasing reliance on credit cards to pay rent is "blinking-red warning light"

NPR reports that there has been a 70% increase from 2019 in the share of renters using their credit cards to pay rent. Citing recent analysis from the Federal Reserve Bank of Philadelphia, NPR writes that “this is a blinking-red warning light that without more relief from Congress, the economy is headed for even more serious trouble.”
What we're reading
A recent Washington Post op-ed from Moody’s Chief Economist Mark Zandi and Jim Parrott, Urban Institute nonresident fellow and panelist at NHC’s Solutions for Affordable Housing, urges members of Congress to take immediate action to support renters and homeowners in crisis. “Lawmakers should not simply delay the moment of reckoning for families struggling to cover their housing costs, but help them meet these costs over the long term,” write Zandi and Parrott. “To make sure that in staving off a near-term rental crisis we are not simply repairing a pothole on a collapsing bridge, Congress must dramatically scale up its support for affordable rental housing.”

Rising sea levels and coastal flooding as a result of climate change could create new housing challenges for low-income households, Bloomberg’s CityLab reports. Citing a new research paper, Bloomberg reports that the share of housing units impacted by frequent flooding is expected to triple from 2000 to 2050, ultimately resulting in the loss of more than 25,000 housing units in states along the East Coast.

The National Association of REALTORS® (NAR) Confidence Index Report and Apple® Maps Mobility Trends Index confirm that homebuyers are increasingly gravitating to less densely populated areas. In October, 85% of home purchases were made in suburbs, small towns or rural areas. Apple® reported increased travel to similar areas. According to NAR, “Travel to and demand for homes in these areas rose as a result of the pandemic as people escaped the cities and also found leisure in outdoor activities.”

A new article from Shelterforce asks, “Who should lead Biden’s HUD?” The article recognizes that “the homes and communities of millions of people are affected by how functional the agency is,” making the choice of HUD secretary an important one. And now that President-elect Joe Biden has begun selecting cabinet members, “speculation has of course been swirling around who he will choose when it comes to HUD.” There has been speculation that Keisha Lance Bottoms, mayor of Atlanta, is in the running. “The reason why so many successful HUD secretaries have been mayors is you have to understand where the money goes when it leaves HUD,” said NHC President and CEO David Dworkin.
The week ahead
The National Housing Conference has been defending the American Home since 1931. We believe everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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