NHC will not publish a Member Brief on Nov. 28 in observance of Thanksgiving. The Member Brief will return Dec. 5. Have a wonderful holiday. We are grateful for your collaboration.
Weekly update from the National Housing Conference
News from Washington | By Luke Villalobos
NHC hosts 2021 Solutions for Affordable Housing online convening

NHC hosted its annual Solutions for Affordable Housing convening on Wednesday, featuring a lineup of housing experts and government leaders, including White House American Rescue Plan Coordinator Gene Sperling, Representative Debbie Dingell (D-Mich.), and House Majority Whip James Clyburn (D-S.C.). The convening brought together panels to discuss lessons learned from the Emergency Rental Assistance (ERA) program, the Homeowners Assistance Fund (HAF), modernizing the Community Reinvestment Act (CRA), and the HUD’s new initiative to end homelessness, House America. Panelists frequently touched on the importance of enacting the Build Back Better bill, which includes more than $150 billion for affordable housing and passed the House of Representatives on Friday. 

Sperling opened the event with a keynote address in which he spoke openly about embracing criticism of the ERA program. He noted that housing leaders who provided feedback to the White House were invaluable in helping improve the program and ultimately make it more efficient. “So many people on this phone have been so essential. We have indeed tried to listen, to learn, to reach out, to see what’s working, what’s not working, take criticism, accept much of the criticism, to respond, because quite frankly, we don’t have a choice,” he said. He noted that while disbursement has not been as rapid as he would have liked, the program has also meaningfully helped struggling families. He said that it was only through the efforts of housing leaders and advocates over the past year that the feared eviction tsunami was averted. “We’re not about defending. We’re about listening. If it wasn’t for the critics that we have, we would not be doing nearly as well.”

Sperling’s remarks were followed by a panel on ERA and specific lessons learned as states and localities built out new infrastructures to deliver assistance. Panelists discussed the program’s challenges, along with the opportunities that lie ahead. Diane Yentel, president and CEO of the National Low Income Housing Coalition, noted, “We have the opportunity to really ensure that these hard-fought lessons learned, this critical infrastructure that we’ve built, remains, and receives permanent funding.” 

Panelists discussing HAF emphasized the need for simplicity and coordination when designing programs, citing lessons from ERA distribution and the 2010 Hardest Hit Fund. “We need to resist the urge to over-engineer things,” said the Federal Housing Agency’s Maria Fernandez. Mark McArdle, Assistant Director of Mortgage Markets at the Consumer Financial Protection Bureau, argued that “you can’t implement 50 different flavors of the same thing.” 

The CRA panel explored how the 1977 law can be modernized to better serve communities today. CRA’s potential to help close existing disparities was a key focus of discussion, with panelists agreeing that the law’s full potential to address issues of racial equity is unrealized. Buzz Roberts, President and CEO of the National Association of Affordable Housing Lenders, noted that “what gets measured gets done. CRA does not measure racial equity.” 

The final panel discussed HUD’s House America initiative, which calls for an all-hands-on-deck effort to ending homelessness. Oakland Mayor Libby Schaaf (D), who has signed on to the initiative, praised HUD’s approach. “It is a silo-busting powerhouse. It really is creating new relationships between the city and the housing authority and the continuum of care,” she said. 

NHC is grateful to our sponsors, JPMorgan Chase, Bank of America, Rocket Mortgage, and Wells Fargo, whose generous support allowed us to offer this event free of charge to current NHC members and government employees. Videos of each panel, as well as remarks from Gene Sperling, Rep. Dingell, and Whip Clyburn, are available to paid NHC members and government employees. 
House passes Build Back Better bill

The House of Representatives passed the $1.75 trillion Build Back Better bill Friday morning, sending the bill that includes $150 billion for affordable housing to the Senate, where it will be taken up through the Budget Reconciliation process. The House vote fell along party lines, a preview of what is likely to come in the Senate, where Republicans are unified in their opposition to the bill and Democrats have yet to secure the approval of two holdouts in their own caucus, Sens. Joe Manchin (D-W.V.) and Kyrsten Sinema (D-Ariz.).

NHC and most other housing stakeholders have endorsed the bill, whose investment in housing NHC President and CEO David Dworkin has called “historic.” The bill includes funding for a host of NHC priorities, including $65 billion for public housing construction and repair, $25 billion for new housing choice vouchers and $10 billion for down payment assistance for first-generation homebuyers. It also includes several measures NHC supports to increase housing supply, including $3 billion for a new Community Restoration and Revitalization Fund, $1.75 billion for a new Unlocking Possibilities Program that aims to liberalize local zoning regulations, $15 billion for the Housing Trust Fund and $5 billion for the HOME program. 

The bill also includes two tax measures expected to boost affordable housing production. It makes significant improvements to the Low Income Housing Tax Credit, which Novogradac estimates will produce 812,000 new affordable multifamily units. And it includes the Neighborhood Homes Investment Act, a priority of the Black Homeownership Collaborative that will lead to the creation or rehabilitation of over 125,000 units in disinvested neighborhoods.

Dworkin noted that though the bill still must pass the Senate before it can be signed into law, its passing the House was an achievement in itself, and he thanked Congressional leaders and President Biden for making it happen. “The passage of this bill would cement [Biden’s] legacy as one of America’s most pro-housing presidents,” he said.
McCulloch inducted into Affordable Housing Hall of Fame

NHC Board of Governors Chair Anne Segrest McCulloch was inducted into Affordable Housing Finance magazine’s Affordable Housing Hall of Fame on Monday. McCulloch, who formerly headed the Housing Partnership Equity Trust and was recently appointed chief legal officer at the Federal Home Loan Bank of San Francisco, was honored as a change maker for her work helping nonprofits acquire and maintain affordable housing.

McCulloch was inducted along with Diana McIver, president and owner of Texas multifamily developer DMA Companies, and John Parvensky, longtime President and CEO of the Colorado Coalition for the Homeless. All three were honored at AHF Live, Affordable Housing Finance magazine’s annual summit in Chicago.
FHA posts strong numbers in Annual Financial Report

The Federal Housing Administration (FHA) reported that its Mutual Mortgage Insurance (MMI) Fund was in a strong position at the end of fiscal year 2021 in its Annual Financial Report to Congress, which it delivered Monday. The report found that the MMI Fund increased its capital ratio to 8.03%, 1.93 points above last year’s ratio of 6.1%.

The two main programs supported by the MMI Fund, the forward mortgage program and the Home Equity Conversion Mortgage (HECM) program, also saw increases in their capital ratios. The forward mortgage program’s ratio was 7.99%, up from 6.31% last year, while the HECM reverse mortgage program posted a positive capital ratio for the first time since 2015. FHA credited both increases to sharp jumps in property values over the past year.

The report also found that FHA continues to play a vital role in extending mortgage credit to underserved groups. Fiscal year 2021 saw FHA set a new record for originations to first-time homebuyers both in terms of share and volume. Over 84% of FHA originations went to first-time homebuyers, almost double the share from non-FHA originators, representing $176 billion in unpaid principal. FHA posted similarly strong numbers with Black and Hispanic buyers, with 17% of FHA loans going to Black buyers and a quarter to Hispanic buyers, shares 2.5 times larger than non-FHA originators. (Black and Hispanic Americans respectively make up 14% and 19% of the country’s population.)
FHFA releases Fannie and Freddie scorecards and performance reports

On Wednesday, the Federal Housing Finance Agency (FHFA) released the 2022 scorecard for Fannie Mae and Freddie Mac (the Enterprises). The scorecard is intended to hold the Enterprises accountable to their core missions and fulfilling their statutory mandates. The 2022 scorecards focus on affordability, fair lending, equity, climate risk, and addressing supervision findings.

FHFA also released the FY 2021 Performance and Accountability report on Monday. The report, which focuses on FHFA’s three main goals of ensuring safe and safe operations, fostering liquidity in markets, and strengthening the agency’s workforce and infrastructure, summarizes the goals of FY2021 and whether or not they were met. The report further stated that FHFA would have a stronger focus on affordable housing priorities in underserved communities in the upcoming year.

“FHFA is responding to shortages in the overall housing supply by ensuring our regulated entities finance the existing affordable housing stock, enable homes in disrepair to be rehabilitated, and support the growth of our nation’s housing supply,” said Acting FHFA Director Sandra Thompson. “As these shortages contribute to worsening affordability, a key priority for our regulated entities will be to support affordable housing in a safe and sound manner.”
CFPB seeks input on mortgage discrimination under HMDA

On Tuesday, the Consumer Financial Protection Bureau (CFPB) issued a Request for Information (RFI) on the Home Mortgage Disclosure Act (HMDA) and any discriminatory practices that exist within the current rules of HMDA implementation. The CFPB intends to review recent changes to the rule as well as the effectiveness of those changes, with a focus on institutional and transactional coverage, data, benefits of new data and disclosure requirements, and operational and compliance costs. 

The RFI was issued in response to several recent reports from CFPB over the summer showing that mortgage lenders were denying credit for Black and Hispanic borrowers more often than White borrowers and charging higher interest rates to borrowers of color. Another report utilizing additional data on race and ethnicity information, allowed by the 2015 HMDA changes, found similar disparities for Asian American and Pacific Islander borrowers. Comments are due 60 days after publication in the Federal Register. 
Senators introduce bipartisan Build More Housing Near Transit Act

Sens. Mike Braun (R-Ind.) and Brian Schatz (D-Hawaii) introduced the Build More Housing Near Transit Act in the Senate on Thursday. The legislation incents localities to build more and denser housing near planned transit projects by boosting Department of Transportation grants for projects that incorporate transit-oriented housing. The bill's supporters say that it would help address the nationwide housing crisis and increase workers' access to jobs.

"For too long, transit and housing issues have run in parallel," said Sen. Braun, referencing the fact that the United States is unusual in siloing housing and transportation planning. "This bill finally marries the two by giving local governments the tools they need to encourage high density and mixed-use development to help relieve the affordable housing crisis."
HUD creates Tribal Intergovernmental Advisory Committee

HUD announced Tuesday the formation of a new Tribal Intergovernmental Advisory Committee (TIAC), which aims to increase tribal leaders’ access to HUD leaders and focus agency attention on problems specific to Native communities. HUD Secretary Marcia Fudge characterized TIAC as part of the Biden administration’s push to improve federal responsiveness to tribal needs and its push to combat the nationwide housing crisis. “The creation of HUD’s first Tribal Intergovernmental Advisory Committee demonstrates that HUD is firmly committed to fulfilling the federal government’s trust responsibility,” she said.

TIAC’s creation was floated in June 2016 but opted not to follow through on its creation because it did not receive a sufficient number of nominations for tribal delegates to serve on it. Tuesday’s proposal retains the structure proposed in 2016, with committee meetings attended by designated HUD officials and 15 tribal delegates nominated by their tribes but appointed by the HUD Secretary.
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HUD calls for increased local assistance in Climate Action Plan

HUD released its Agency Climate Action Plan on Wednesday, which calls for the agency to increase material and technical assistance to localities that it says are on the “front lines of the climate emergency.” The plan, which HUD Secretary Marcia Fudge previewed at last week’s COP26 summit in Glasgow, is part of the Biden administration’s cross-government effort to tackle climate change. 

The plan includes four main components: increasing resources available for local responses to climate changes through HUD’s Climate Communities Initiative; new incentives for green retrofits of existing housing, including a new partnership with the Department of Energy’s Better Climate Challenge; developing new green jobs programs through pilots and cross-agency partnerships; and altering environmental review practices to better consider climate and environmental justice issues. The plan also calls for targeting assistance to vulnerable populations, consistent with President Biden’s Justice40 initiative to deliver 40% of federal climate investments to disadvantaged communities.
Ginnie Mae digitizes loan modification signatures

Ginnie Mae announced Monday that it would allow lenders to obtain electronic signatures for modifications of Ginnie Mae loans, a move the agency expects will make it easier to execute modifications. The agency also said it would allow remote notarization for those signatures through its Remote Online Notarization tool.

The decision was driven by a desire to modernize and respond to increased demand for modifications following the COVID-19 pandemic, said Ginnie Mae Acting Executive Vice President Michael Drayne. “Tens of thousands of homeowners coming out of the forbearance and other pandemic-related mortgage relief programs may utilize mortgage modifications to improve their financial situation, and we believe this policy change will help make the process proceed more smoothly for homeowners and servicers,” he said.
FHA clarifies non-discrimination requirements for appraisers

FHA updated its guidance for appraisers Wednesday to clarify existing prohibitions on discrimination against groups protected under federal law. The updates align with the mission of the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE), which President Biden created in June to leverage federal resources in the fight against appraisal discrimination.

The updates clarify FHA's requirement that appraisers comply with the 1968 Fair Housing Act, Fair Credit Reporting Act, Equal Credit Opportunity Act and other federal legislation that protects consumers from discriminatory behavior. The guidance also emphasizes that appraisers are subject to local anti-discrimination laws and expands the set of documents appraisers must account for in their appraisal reviews.
HUD announces $5.3 million in disaster relief for Lake Charles

HUD announced Tuesday that it would award $5.3 million in disaster relief funds to Lake Charles, Louisiana, to contribute to the city’s recovery after a spate of natural disasters, including two hurricanes, in 2020. The grants, made through the Community Development Block Grant (CDBG) program, will increase climate disaster resilience in the city, which sits in a flood-prone region in southwestern Louisiana.

The funding follows nearly $600 million in CDBG funds HUD granted to Louisiana for the state’s recovery from Hurricanes Laura and Delta, which hit Lake Charles especially hard. “HUD understands the devastation Louisiana has faced from disasters in recent years,” HUD Secretary Marcia Fudge said Tuesday. “Today's award announcement will help Lake Charles continue its efforts to rebuild and restore the fabric of so many neighborhoods still reeling from the events of 2020."
Chart of the week
Chart of the week: New tool visualizes racial disparities in homeownership by city

A new Urban Institute tool visualizes homeownership rates and housing wealth, disaggregated by race, in any city in the country. Users can also compare cities to reveal the extent of inequity in housing assets that characterizes virtually every housing market in the country.
What we're reading
video from the New York Times argues that liberal states' failure to roll back exclusionary zoning restrictions and build more affordable housing is a major driver of inequality. The video tells the story of an effort to construct a single affordable multifamily building for seniors in overwhelmingly liberal Palo Alto, California, that proved so controversial that voters rejected it in a referendum. "You cannot say that you are against inequality in America unless you are willing to have affordable housing built in your neighborhood," says the Times' Binya Appelbaum.

Enterprise Community Partners and the NHP Foundation released a new report analyzing the past ten years of housing policy through the perspective of over 100 housing stakeholders. Key findings include: past policy has exacerbated housing vulnerability of low-income renters, support for vulnerable groups is inconsistent, responsibility for addressing racial equity is shared, public sector and federal aid are essential, state and local housing funds are transformative, and housing policy today is learning from the past. 

CityLab interviews Brookings' David Wessel, author of a new book on opportunity zones arguing that what was intended as a revitalization initiative ended up being a tax break for real estate investors that helped fund projects like a new Ritz-Carlton hotel in Portland, Oregon. Wessel says that the breakdown was due to minimal reporting requirements and few safeguards to ensure that investors were actually helping low-income communities. "If you have 8,764 census tracts designated as Opportunity Zones, and you say that you can do almost anything in the zones and get the capital gains tax break — well, what would you expect? People will gravitate toward high-reward, low-risk investments that are concentrated in the best-off zones," he says.
The week ahead
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