Weekly update from the National Housing Conference
News from Washington | By Luke Villalobos
Biden nominates Thompson for FHFA director

President Biden nominated Federal Housing Finance Agency (FHFA) Acting Director Sandra Thompson to take over the agency in a permanent capacity on Tuesday. Thompson succeeded former Director Mark Calabria on an acting basis in June. Her confirmation would end half a year of uncertainty about Calabria’s successor, a Donald Trump appointee whom President Biden dismissed after the Supreme Court ruled that presidents have the power to dismiss executive branch officials regardless of cause.

NHC President and CEO David Dworkin welcomed the decision, calling Thompson “the right choice for one of the most important jobs in housing.” Dworkin cited Thompson’s tenure as acting director, in which she has emphasized FHFA’s role in expanding homeownership access among people of color and the working class, as evidence of her fitness for the job. “Should she be confirmed to a five-year term at FHFA’s helm, she will have a unique opportunity to leverage her decades of experience to ensure Fannie Mae, Freddie Mac and the Federal Home Loan Bank System meet the needs of all American families, including those who have not traditionally been served by our housing finance system,” he said.
OCC rescinds disparate CRA rule

The Office of the Comptroller of the Currency (OCC) took the final step in rescinding its 2020 Community Reinvestment Act (CRA) rule, which was widely criticized by housing stakeholders and rejected by the two other CRA regulators, the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve Board of Governors. 

NHC strongly opposed the 2020 rule on both content and process grounds. The rule would have created a regulatory split. Banks regulated by OCC were subject to different CRA rules than banks regulated by FDIC and the Fed. Many analysts also predicted it would lead to decreased lending in low-income and minority communities.

NHC President and CEO David Dworkin said that the rescission of the 2020 rule was the first step toward a CRA rule that better accounts for the effects of redlining, the racist practice the law was created to combat. “OCC’s rescission of the 2020 rule will be a vital first step toward a unified CRA regulation that redresses the harms of redlining and other forms of housing discrimination after nearly a century of pretending they aren’t there,” he said in October. Asked about then Comptroller Joseph Otting’s 2020 final rule, Dworkin told the New York Times, “I told him: This is a legacy opportunity. If you do this right, no one will touch it for 15 or 20 years…There are many people who believe that he wanted to gut CRA… I can’t make that judgment, but I can say that what he has done will gut it.”
McCargo confirmed as Ginnie Mae president

On Wednesday, the Senate confirmed Alanna McCargo as President of Ginnie Mae. McCargo had previously served as a Senior Advisor for Housing Finance at the Department of Housing and Urban Development. Ginnie Mae had not had a permanent president since 2017, when Ted Tozer held the position. 

NHC President David Dworkin commended the decision, saying, “In her new role, Ms. McCargo will have the opportunity to ensure that Ginnie Mae policy aligns with the Biden administration’s goals of reducing housing costs and expanding access to homeownership for historically underserved groups. Ms. McCargo has the expertise necessary to get Ginnie Mae back on track after five years without a permanent head.” 

Dworkin also argued that McCargo’s confirmation should be followed by the confirmation of Julia Gordon, President Biden’s nominee for Federal Housing Administration Commissioner. “It is crucial that the head of the agency tasked with securitizing government-backed mortgages has a capable and Senate-confirmed counterpart at the Federal Housing Administration,” he said.
FHFA proposes capital planning rule for Enterprises

On Thursday, FHFA issued a proposed rule requiring Fannie Mae and Freddie Mac to submit annual capital plans to FHFA. The plans will allow FHFA to fulfill its commitment to safety and soundness in housing finance by monitoring the GSEs’ maintenance of proper capital levels.

The rule would require the GSEs to report on five main areas: expected sources and uses of capital over the planning horizon of between 2 and 5 years, projected revenues and costs under a range of scenarios, planned capital actions, plans for unexpected or stressful conditions and expected changes likely to have a material impact on the Enterprises’ levels of capital. The rule also includes an amended Enterprise Regulatory Capital Framework that incorporates comments from last year.
HUD and GSEs announce disaster relief for Kentucky

HUD, Fannie Mae and Freddie Mac each announced disaster relief measures for survivors of the tornado outbreak that struck Kentucky and neighboring states on the night of December 10.

HUD announced relief measures for the eight counties in which President Biden has declared major disasters. Measures include foreclosure relief, expanded mortgage insurance, expanded anti-discrimination measures, and administrative flexibility for local governments whose capacity has been negatively affected by the storms.

Fannie Mae's and Freddie Mac’s relief measures are available to residents and owners of enterprise-backed properties across Kentucky, Illinois and Tennessee. They include mortgage forbearance and the option for impacted homeowners to defer payments for up to a year without incurring late fees.

In addition to these direct relief measures, the Fed, OCC, FDIC, National Credit Union Administration and several state regulators issued a joint statement encouraging financial institutions to voluntarily provide relief to affected customers. The regulators said that they would expedite approval of efforts to provide relief in the region and that such efforts could qualify for CRA credit.
Promoting Affordable Housing Near Transit Act passes as part of NDAA

The Promoting Affordable Housing Near Transit Act passed the Senate as part of the 2022 National Defense Authorization Act (NDAA) last week, sending the pro-housing provision to the White House where it awaits President Biden’s signature. The provision allows federal transit grant recipients to transfer land to proven affordable housing developers for free, opening up a potentially significant amount of land for housing that was previously inaccessible to developers.

“Transit agencies often own land that is unnecessary for transit facilities but ideal for affordable housing. Unfortunately, current law doesn't allow agencies to donate this land to affordable housing developers,” said Mike Kingsella, CEO of Up for Growth Action, which supports the provision. “The Promoting Affordable Housing Near Transit Act addresses this obstacle by providing transit agencies with the authority to donate unused land to produce affordable housing in transit-served areas, ensuring that more people have critical access to jobs and opportunities.”

The Promoting Affordable Housing Near Transit Act is distinct from the Build More Housing Near Transit Act, which gives a scoring boost to the competitive grant applications of public transit projects that incorporate new housing near transit hubs. That legislation has yet to pass either house of Congress.
Fed moves to more aggressively combat inflation

The Federal Reserve Board of Governors announced Wednesday that it would move more aggressively to combat inflation by raising rates as many as three times in 2022. It also signaled that it would move up the end date of its bond-buying program, which it initiated to sustain the economy during the COVID-19 pandemic.

The move signals the Fed's intention to focus more on easing upward pressure on prices than dealing with the economy's labor force participation woes. "The reality is we don't have a strong labor force participation recovery yet and we may not have it some time," said Fed Chair Jerome Powell. “At the same time, we have to make policy now and inflation is well above target, so this is something we need to take into account.”

The Fed noted that it could reverse course should the economy reverse course, but Powell said he doubted whether that would happen as a result of the new Omicron variant of COVID-19, as some have feared. “Moving forward the end of our taper by a few months is really an appropriate thing to do,” he said. “Omicron doesn’t really have much to do with that.”
HUD and HHS launch health and housing tool

Last Wednesday, HUD and the Department of Health and Human Services (HHS) announced an expansion of their partnership and the creation of a new national Housing and Services Resource Center. The new hub will offer a coordinated approach to housing and health resources, guidance, training, and technical assistance to better assist people with disabilities, older adults, and people experiencing homelessness. Access to community support and services have long been identified as crucial components to the success of housing programs.

“This new joint HHS and HUD center will help communities break down the silos and coordinate the provision of services with housing to ensure that these new resources reach our most vulnerable homeless neighbors,” said HUD Secretary Marcia Fudge. 
OCC launches DC REACh

Acting Comptroller of the Currency Michael J. Hsu joined community leaders in Washington, DC, on Monday to launch a new Roundtable for Economic Access and Change (REACh) initiative in the District. The initiative, called DC REACh, is the second REACh initiative that will focus on a specific geographic area, after Los Angeles’ LA REACh.

OCC created Project REACh in the wake of nationwide racial justice protests in the summer of 2020 to bring community stakeholders together to identify barriers to disadvantaged groups' full participation in the economy. “Project REACh is a convening forum with the important goal of tearing down barriers that keep our financial system from providing the same full, fair, and equal access to everyone,” said Hsu. “With the launch of concentrated efforts here in D.C., this initiative has the potential to provide meaningful opportunities that will benefit many businesses and consumers in the nation’s capital.”
Non-profits purchase over 800 HUD-held mortgages

On Monday, HUD announced the successful purchase of 814 mortgage notes by 23 non-profit organizations in its first HUD-held Vacant Loan Sale effective in 2022 (HVLS 2022-1). HUD said that the goal of the sale was to transfer foreclosed properties to organizations that have committed to using the homes for affordable owner-occupied or rental properties.

HUD offered up to 50% off notes for bids that first were offered to eligible non-profit organizations and state and local governments. A list of the organizations awarded the mortgage notes is available on HUD’s sales note.
Treasury awards ECIP funds

On Tuesday, the Treasury Department published a list of more than 180 financial institutions approved to receive funds from the Emergency Capital Investment Program (ECIP). Established by the Consolidated Appropriations Act of 2021, the program provides $8.7 billion of capital to minority depository institutions and community development financial institutions. It aims to provide financial support to struggling communities, particularly communities of color, that were disproportionately impacted by the COVID-19 pandemic. Institutions that receive awards will be provided with capital to make loans, grants, and forbearance options available to their customers. 

Hope Credit Union CEO William Bynum noted the importance of the award for his institution, saying, “Capital is not easy to come by in communities like the ones we serve. It’s a lifesaver. It took Hope 14 years to reach $80 million of assets. Now, in one investment, we're receiving $88 million of capital. We can grow our deposit base and serve many more people across the Deep South.” 
Fed and FDIC update CRA small bank thresholds

FDIC and the Fed updated the thresholds to be considered a “small” or “intermediate small” bank under CRA regulations on Thursday. The new thresholds reflect inflation over the previous year and see thresholds rise 9.5%, to $346 million in assets for small banks and $1.384 billion in assets for intermediate small banks.

CRA bank size thresholds receive significant attention from policymakers and industry members because banks of different sizes have different obligations under the law. NHC has encouraged regulators to balance the desire for increased lending to underserved groups with the increased compliance costs incurred by banks classified as larger under the law.
HUD announces funding for lead abatement and foster youth housing

HUD announced two funding awards on Thursday. The first is an award of $13.2 million for the abatement of lead-based paint and other in-home hazards. The funds will be split between Long Beach, California; Cleveland, Ohio and Clarksville, Tennessee.

The second award, which totals over $1 million split between 26 public housing agencies, will provide housing for youth in the foster care system. The award funds housing choice vouchers and supportive services for foster youth through HUD's Foster Youth to Independence program.
Urban HFPC seeks senior policy program manager

The Urban Institute’s Housing Finance Policy Center (HFPC) is seeking a senior policy program manager to support critical HFPC programming. According to Urban, applicants can expect to work on “fundraising and donor relations, project management, translating research findings into policy and practice recommendations, planning and managing programming and convenings, and collaborating on the development of research proposals.”

An ideal candidate will have a master’s degree-level of knowledge of public policy, public administration, economics, sociology or a related discipline, and have 7-10 years of relevant professional experiences. Those interested should view all requirements and responsibilities on Urban’s job listing
Brookings and NAACP announce partnership for Black communities

On Monday, the Brookings Institution and NAACP announced a formal partnership to improve the wellness and stability of Black communities and majority-Black cities.

The partnership between the think tank and the civil rights organization will produce an annual, co-branded research report and data dashboard that examines the assets and opportunities of Black people in health, business, housing, employment, and education. Brookings and NAACP said that the partnership would elevate the national discourse of economic mobility and advance policy solutions to problems specific to Black communities.
Chart of the week
Chart of the week: Older homes filtering to lower-income families less frequently

Freddie Mac data presented at the Bipartisan Policy Center’s Getting Serious About Housing Supply webinar shows that wealthy families are increasingly purchasing older homes, reversing the trend of homes "filtering" down to families with lower incomes as they age. The trend is especially pronounced in cities with especially constrained housing supply, such as Washington, D.C., and Los Angeles, where homeowners' incomes (measured by the repeat income index) only increase as the home gets older.
What we're reading
An FHFA blog post on appraisal bias observed that though federal law and industry standards forbid considering neighborhood racial demographics in property valuation, the practice remains widespread. FHFA cited increasing training and strengthening existing standards as promising avenues for reducing racial bias. "By updating industry norms on the type of neighborhood information that is appropriate to include and moving neighborhood descriptions away from the examples we shared above, we can begin to establish more equitable assessments that ensure fair and unbiased property valuation for all.”

The Washington Post profiles a LaVergne, Tennessee, neighborhood that has been particularly impacted by the influx of institutional, all-cash buyers into the market for single-family homes, pricing out middle-class families and funneling money to wealthy investors outside the community. The Post found that the purchases began in the wake of the 2008 Financial Crisis, when the company that has bought most of the LaVergne homes issued a memo saying that it sought to "capitalize on the severe distress in the residential real estate market in the United States" by buying vacant homes and renting them to families who had been foreclosed.

Terner Center report assesses the feasibility of addressing increasing homelessness through hotel conversions, a strategy highlighted in NHC’s Converting Motels and Hotels into Affordable Housing webinar in June. Though the report notes that the strategy is "not a panacea," hotel conversions can be coupled with other investments to make a meaningful dent in the number of individuals without permanent housing.
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.
Defending our American Home since 1931
Copyright © 2021. All Rights Reserved.