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Weekly update from the National Housing Conference
News from Washington | By Luke Villalobos
Housing stakeholders join Chairs Brown and Waters to call for the inclusion of housing provisions in the budget reconciliation package

A diverse group of housing stakeholders gathered at the Capitol on Wednesday to call for substantial investment in housing as part of the budget reconciliation package currently being negotiated in Congress. The group included representatives from the National Housing Conference (NHC), Habitat for Humanity, Mortgage Bankers Association (MBA), National Association of Hispanic Real Estate Professionals (NAHREP), National Association of Home Builders (NAHB), National Association of REALTORS® (NAR), National Fair Housing Alliance (NFHA) and National Low Income Housing Coalition (NLIHC). Housing leaders were joined by Senate Banking, Housing and Urban Affairs Committee Chairman Sherrod Brown and House Financial Services Committee Chairwoman Maxine Waters, who affirmed their support for including housing provisions in the bill.

“Housing is fundamental to an economy that works for all. Democrats and President Biden understand this,” said Chairman Brown. “Robust housing investments support families and kids, improve health outcomes, and address climate change – while creating good-paying jobs. That is why these investments must stay in the reconciliation package.”

“For decades we’ve neglected our crumbling housing infrastructure. This pandemic has exposed the toll that the housing crisis is taking on families and on the stability of the U.S. economy,” said Chairwoman Waters. “Millions of people each day are forced to choose between keeping a roof over their head, putting food on the table, seeking medical care, investing in their children’s education, or saving for retirement. If we are serious about supporting families, children, and workers, we must understand that we cannot tackle childcare, healthcare, climate change, or racial equity without addressing our nation’s affordable housing crisis. Now is the time to prioritize housing and make the robust investments needed to provide every family with a stable foundation and set our country on a better path for the future. This is why I am fighting tooth and nail to ensure that housing is at the forefront of the Build Back Better Act, as it should be.”
LILP launches coalition to pressure Fannie and Freddie to ramp up DTS goals

NHC joined the Lincoln Institute of Land Policy (LILP) and 19 other affordable housing organizations on Thursday to launch the Underserved Mortgage Markets Coalition (UMMC), with the goal of increasing Fannie Mae and Freddie Mac’s commitments to underserved markets in each DTS cycle. The coalition aims to increase the Enterprises’ activity under the Duty to Serve (DTS) program, which was created under the Housing and Economic Recovery Act of 2008 and requires the Enterprises to devote resources to serving the affordable, manufactured, and rural housing markets. To that end, UMMC will create an online tool to track the Enterprises’ progress on the notoriously complex plans so that stakeholders can easily see whether Fannie and Freddie are reaching the goals they set for themselves.

In a letter to FHFA Acting Director Sandra Thompson sent Wednesday, coalition members asked that FHFA request substantial revisions to Fannie and Freddie’s proposed DTS plans for 2022 through 2024 before approving them. “We believe these three-year plans do not fully articulate a strategic vision for meeting the spirit or the letter of the Duty to Serve regulation,” they said, noting that the plans would see the Enterprises scaling back activity in all three DTS markets. The letter also called for FHFA to revamp regulations that hamper DTS activity, including stringent capital requirements and restrictions on pilots programs.

UMMC also noted that it would also push the Enterprises to make robust commitments in their inaugural Equitable Housing Finance plans. FHFA announced Fannie and Freddie would be required to submit these plans, which focus on ways to expand access to housing finance to other underserved groups not identified by DTS, such as racial minorities, after widespread calls for such a move by housing advocates, including NHC.
FHFA expands refinance eligibility and desktop appraisals

On Monday, the Federal Housing Finance Agency (FHFA) made two announcements aiming to sustainably advance homeownership affordability. First, FHFA is expanding the eligibility requirements for the refinance programs RefiNow and Refi Possible. Second, it is making the desktop appraisal flexibility enacted during the COVID-19 pandemic permanent. 

The refinance programs will now be offered for incomes up to 100 percent AMI, rather than the prior 80 percent. This will significantly expand the number of low- and moderate-income borrowers eligible for refinancing with the program, and give more equitable access to the benefits of refinancing that high-income borrowers currently receive. FHFA Desktop appraisals will now be incorporated into the Selling Guides of Fannie Mae and Freddie Mac, beginning in 2022. Desktop appraisals began as temporary flexibility during the pandemic and proved to be particularly valuable for rural areas. Both changes intend to address “operational frictions” and make it easier for lenders to offer programs and efficient services.

The announcements, made at the Mortgage Bankers Association Annual Convention and Expo, were part of Acting Director Sandra Thompson’s prepared remarks updating the industry on FHFA’s recent work and continuing path forward. 
THUD releases F.Y. 2022 appropriations text

On Tuesday, the Subcommittee on Transportation, Housing, and Urban Development (THUD) released its full Fiscal Year 2022 Appropriations text and summary. The appropriations cover $82.9 billion in budget authority, $8.3 billion more than F.Y. 2021. The Department of Housing and Urban Development (HUD) represents $65.4 billion worth of that funding, a $5.7 billion increase from the previous year. Specifically, $27.7 billion is allocated for tenant-based rental assistance, $13.97 billion for Project-Based Rental Assistance, $5 billion for the Public Housing Operating Fund, $3.8 billion for the Public Housing Capital Fund, and $4.19 billion for the Community Development Fund, among other allocations. The bill also includes the Reforming Disaster Recovery Act to accelerate disaster assistance to communities by leveraging Community Development Block Grants. 

THUD Chair Senator Brian Schatz (D-HI) stated in the summary, “Our bill delivers strong funding for transportation and housing programs that will help improve our transportation systems, address homelessness, and provide safe and affordable housing for millions of Americans who need help. It also represents our commitment to building a stronger, more resilient infrastructure system in the face of the climate crisis and worsening natural disasters.” 
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Texas legislature passes bill to use ARP funds for property tax relief

Texas’ state legislature passed a bill last week that would use American Rescue Plan (ARP) fiscal stimulus funding to send $525 checks to every homeowner in the state, an attempt to deliver long-promised property tax relief without running afoul of ARP’s prohibition on using funds to lower taxes. The bill, originally passed by the State Senate as a straightforward cut to property taxes, was modified by the House to thread the needle between reducing its cost to state and local budgets while avoiding directly using ARP money to fund a tax cut.

Critics of the bill claim that it is being used for political gain for Republicans. The current text requires that checks begin arriving in homeowners’ mailboxes no later than September 1 of next year, just two months before voters head to the polls for 2022’s midterm elections. Dick Lavine, a political analyst in the state, told the Houston Chronicle, “They’ll have to print the check on legal size paper to fit the signatures of all the people who want to take credit for it.”

Others have questioned why the bill is targeted exclusively to homeowners rather than including renters as well. However, Republicans have pushed back against claims that the bill would be unfair to renters, noting the state’s success in pushing out federal emergency rental assistance funding.
Chart of the week
Chart of the week: Student loan debt holders say debt prevents them from buying a home

report from the National Association of REALTORS® finds that almost half of adults who say that student loan debt prevents them from buying a home say that they cannot save for a down payment due to student debt. A similar share say that they doubt that they qualify for a mortgage due to their debt-to-income ratio or that they do not feel financially secure enough to buy a home due to their debt.
What we're reading
Curbed examines New York City mayoral candidate Eric Adams’ plan to convert empty hotel space into 25,000 units of single-room occupancy housing. The article cites multiple potential difficulties for Adams’ plan, including the city’s ability to purchase enough vacant space, the effects of reduced hotel inventory on city tourism and a lengthy rezoning process that could make it difficult to deliver on the promise while commercial real estate remains relatively cheap. Still, the article notes that Adams’ campaign is remaining committed to the plan, with one advisor saying that “we have to move on this now for the sake of saving people’s lives.”
An article by Reuters examined the constraints of homebuilding while supply chain issues continue to slow production. Homebuilding fell in September and permits dropped to a one year low, according to the Department of Commerce. The price of building materials remains a barrier for constructions, namely lumber and copper, but including windows, electric breaker boxes, and more. 
blog post by the National League of Cities outlines 5 Strategies to Better Serve Unbanked Tenants. The post focuses on strategies for Emergency Rental Assistance money to reach the 7.1 million households that do not have bank accounts. The post recommends flexible applications, partnering with local institutions, alternative methods of payment, leveraging different funding streams, and connecting with financial empowerment resources to better serve these residents. 
The week ahead
Monday, October 25
Tuesday, October 26
Wednesday, October 27
NCRC: Quarterly fair housing call, 11 a.m. – noon ET
Thursday, October 28
Friday, October 29
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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