Weekly update from the National Housing Conference
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News from Washington | By Luke Villalobos
NHC, affordable housing builders, meet with Biden's Homebuilding Supply Chain Task Force on lumber

On Wednesday, NHC met with industry leaders and the Biden administration’s Homebuilding Supply Chain Task Force to discuss high lumber costs and potential policy solutions for rising costs of building materials as a whole. The group included NHC members the National Association of Homebuilders, National Association of State Housing Agencies, Federation of Appalachian Housing Enterprises, Local Initiatives Support Corporation, Enterprise Community Partners, Eden Housing, AFL-CIO Housing Investment Trust, WNC, National Association of Affordable Housing Lenders, National Neighborworks Association, Novogradac, and Atlanta Neighborhood Development Partnership. Representatives from HUD and the White House also attended the call. NHC and participating housing organizations penned a letter to the White House to request a formal summit to address materials costs and analyze supply chains in order to calm the volatile market. 

Lumber costs have been a frequent topic for the housing industry over the past year as prices reached historic highs, and costs of other building materials are seeing similar rises. The meeting discussed the resulting issues in affordable housing development, as well as overall economic impacts and labor force implications of the need for more housing development. Specifically, affordable housing projects are being stalled or outright canceled if financial gaps cannot be filled due to high materials costs and substantial delays in supply chains. The meeting noted that although lumber costs have come down since their May peaks, those cost savings have yet to transfer to lumber yards and consumers and prices remain 250% higher than average. Stakeholder engagement is expected to continue with the Department of Commerce in order to address the long-standing issue. 
T-HUD approves FY 2022 budget

On Monday, the House Appropriations Committee released an approved fiscal year budget for 2022 Transportation, and Housing and Urban Development, and Related Agencies (T-HUD). The bill provides a total of $84.1 billion in funding, with $56.5 billion for HUD, a $6.8 billion increase from 2021. The budget details several increases in housing program funding with totals of: $29.2 billion for Tenant-based rental assistance, $14 billion for Project-based rental assistance, $3.7 billion for Community Development Block Grants, $1.85 billion for HOME, $45 million for HUD's Section 4 Capacity Building program, $8.64 billion for Public Housing, and $950 million for Native American programs. 

The legislation estimates that the budget increases will provide more than 125,000 housing vouchers for families, protect 4.8 million individuals’ housing assistance, and will develop 4,000 additional units of affordable housing. It also makes significant investments in housing counseling, policy development, Fair Housing and Equal Opportunity initiatives, and environmental investments. The bill also includes $185 million for Neighborworks and $4 million for the U.S. Interagency Council on Homelessness. The full committee markup for the bill is scheduled for Friday, July 16, 2021.  
Enterprise and U.S. Bank announce racial equity bonds

NHC member Enterprise Community Partners announced on Wednesday a new partnership with U.S. Bank to offer innovative bonds designed to advance racial equity as part of their Equitable Path Forward initiative. In total, $30 million is being committed for the bonds to be issued through Enterprise’s Community Development Financial Institution (CDFI), Enterprise Community Loan Fund. Loans will be targeted to housing developers who are Black, Indigenous or persons of color. 

The bonds are the first of their kind for CDFIs and aim to fund community-based nonprofits and mission-aligned for-profit developers in order to maximize social impact in underserved areas. “It is time to take decisive action to ensure the businesses that create affordable homes are more representative of the people who live in them,” said Lori Chatman, president of Enterprise Community Loan Fund, in the announcement. 
Chairwoman Waters announces legislative housing package

On Thursday, Chairwoman of the House Committee on Financial Services Maxine Waters (D-Calif.) announced a legislative housing package consisting of three bills: The Housing is Infrastructure Act of 2021, The Ending Homelessness Act of 2021 and The Downpayment Toward Equity Act of 2021

Each Act addresses a specific problem that contributes to the overall affordable housing crisis. The Housing is Infrastructure Act would provide $600 million in housing infrastructure investments. The Ending Homelessness Act would transform the Housing Choice Voucher program into a federal entitlement in order to guarantee that everyone who needs housing assistance will receive it. Finally, the Downpayment Toward Equity Act would provide $100 million towards downpayment assistance for first-generation homebuyers, aiming to close the racial wealth gap by increasing homeownership for underserved groups. Housing groups are largely supportive of the housing legislation package. With NHC President and CEO David Dworkin sharing, “NHC strongly supports the Downpayment Toward Equity Act, which creates an innovative and impactful down payment assistance program focused on first generation homebuyers. This bill is targeted to help those who have been left out of the American Dream. Lack of downpayment is one of the leading barriers to homeownership. Lack of intergenerational family wealth is a major contributor to the difficulty of many qualified families to purchase their first home. This legislation is an important part of a comprehensive approach to creating real and lasting equality in housing opportunity.”

In her announcement, Chairwoman Waters stated “Now, for the first time in a generation, we have a real opportunity to fix these deep-rooted issues in our housing system. We can end homelessness. We can make rental housing affordable. We can provide the American dream of homeownership. We can do all of this by finally making the investments that we have postponed, diminished, or denied for years. The reconciliation bill provides us with a once-in-a-generation opportunity to provide the housing resources that our country so desperately needs.”
Budget blueprint released

On Tuesday, senators on the Senate budget panel announced a budget blueprint for a $3.5 trillion budget resolution. Full details of the plan are not yet available, but Medicare, climate, childcare, and other social programs were noted as priorities for progressives to include in the resolution. Affordable housing investments are included under the American Families Plan and remain a topic of interest for the final reconciliation. Democratic leaders hope to pass the budget reconciliation and the bipartisan infrastructure package in tandem as part of President Biden’s two-pronged strategy. Passing the package will require support from independents and conservatives, likely leading to tough negotiations in Congress.   
Mortgage market reflects buyer burnout

On Wednesday, the NHC member the Mortgage Bankers Association (MBA) reported a 16% increase in mortgage applications after several weeks of dropping numbers. The same day, Redfin reported a decrease in bidding wars in June. Joel Kan, MBA’s vice president of economic and industry forecasting, stated that lower mortgage rates may be helping homebuyers, particularly first-time homebuyers, close on their purchases. 

This may seem like good news for first-time buyers who have been struggling in the intense housing market, often being priced out by cash buyers. However, there is concern that less competition is due to buyer burnout and lower-income buyers getting pushed out of the process entirely when they can’t compete. The lack of affordable homes available for purchase remains a key driver to these issues. 
HUD announces full slate of senior staff including former NHC Policy Director Ethan Handelman

HUD announced a list of staff positions filled in a press release last Friday. HUD Secretary Marcia Fudge stated early in her appointment that “We are thousands of people short of where we ought to be. Our staff is outstanding: they are under-resourced, understaffed and overworked. But, we are going to make some major changes, and very quickly.” 

Those named included former NHC Policy Director and Acting NHC CEO Ethan Handelman for Deputy Assistant Secretary and head of the Office of Multifamily Housing Programs at the Federal Housing Administration (FHA). Ethan was a senior housing policy analyst at the Federal Housing Finance Agency (FHFA) before joining the Biden administration. He is joined by our former Mortgage Bankers Association colleague Julienne Joseph as Deputy Assistant Secretary and head of the Office of Single Family Housing at FHA. Julienne played an important role in the development of the Black Homeownership Collaborative and the 7-Point Plan to create 3 million net new Black homeowners by 2030. Also named was Gina Metrakas as HUD’s Chief Operations Officer in the Office of the Deputy Secretary. As a contractor with NHC, Gina led the initiative to create the COVID-19 Housing Resource Center. We are thrilled for all of them and look forward to continuing to work with this high-caliber team.  
FHFA eliminates Adverse Market Refinance Fee

On Friday, FHFA announced it would eliminate the Adverse Market Refinance Fee for refinanced loan deliveries to Fannie Mae and Freddie Mac (the Enterprises). Currently, the fee requires lenders pay the Enterprises a fee of 50 basis points for all refinanced mortgages. The fee was enacted in 2020 due to alleged increased risk and costs to FHFA during the COVID-19 pandemic. Some lenders consequently passed the cost of this fee onto borrowers, meaning that eliminating the fee helps supports borrowers looking to make their mortgage more affordable. 

In the announcement, the elimination is justified in stating “The success of FHFA and the Enterprises' COVID-19 policies reduced the impact of the pandemic and were effective enough to warrant an early conclusion of the Adverse Market Refinance Fee.”

The effective date for this change is Aug. 1, 2021.  
Chart of the week
Chart of the week: NAHREP data shows complexities of Hispanic homeownership

The National Association of Hispanic Real Estate Professionals (NAHREP) released its 2020 State of Hispanic Homeownership report that offers data on both statewide homeownership and homeownership based on country of origin. The complexities of Hispanic and Latino homeownership are demonstrated by the data showing varied homeownership rates across subgroups, often depending on the concentration of those groups in different cost markets. 
What we're reading
The Government Accountability Office released a new report on COVID-19 Housing Protections and found that mortgage forbearance, along with other federal efforts, reduced defaults and foreclosures risks during the pandemic. It calls out expanded repayment options and new servicing rules as being impactful, especially for first-time and rural homebuyers, as well as Black and Hispanic borrowers. NHC strongly lobbied for homeowner’s assistance at the onset of the pandemic. 

The National Association of Hispanic Real Estate Professionals published a new report in conjunction with the Hispanic Wealth Project on the 2020 State of Hispanic Homeownership. The report showed sustained homeownership in the community despite economic setbacks due to COVID-19. It also notes record lows of affordable housing inventory that made qualifying for mortgages more difficult, creating substantial opportunities for growth in the Hispanic-Latino community for future homeownership. 

The Terner Center for Housing Innovation at UC Berkeley released a report detailing the results of their nationwide survey of Emergency Rental Assistance (ERA) programs and found that landlords who own small rental properties are not taking advantage of ERA funds at the same rate as larger landlords. This raises concerns of losing stock of small rental properties due to the financial stress on the landlords and recommends better marketing of ERA to small landlords while the funding is still available. 
The week ahead
Monday, July 19
Tuesday, July 20
NAHRO: Cyber & IT security, 1 – 5 p.m. ET
Wednesday, July 21
NAHREP: Realogy Luxury Course Part 1, 11 a.m. – 12 p.m. ET 
Thursday, July 22
MBA: Condo lending workshop, 1 – 5 p.m. ET
Friday, July 23 
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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