House Appropriations Committee approves FY 2021 USDA, T-HUD spending bills

Last week, the House Appropriations Committee released the FY 2021 Agriculture-Rural Development-FDA and Transportation-House and Urban Development (T-HUD) funding bills, both of which were subsequently approved by their respective subcommittees. The bills include significant increases in funding levels for key housing programs over both the FY 2020 allocations and President Trump’s FY 2021 budget, including $25.7 billion for tenant-based rental assistance, a $1.8 billion increase over the FY 2020 level, and $3.2 billion for the Public Housing Capital Fund, a $311 million increase over the FY 2020 level. Other housing-related program funding levels include $1 billion for the expansion of rural broadband service, $24 billion in loan authority for the U.S. Department of Agriculture’s Single Family Housing Guaranteed Loan Program, and $1.45 billion for rental assistance for rural communities. Republican members of the Appropriations Committee raised concerns with the funding bills, with Ranking Member Kay Granger (R-Texas) saying in a statement, “While these bills fund priorities of Members on both sides of the aisle, Committee Democrats have chosen to turn these annual appropriations bills into partisan messaging measures filled with policy provisions and emergency spending unacceptable to Republicans.” The appropriations bills will head to the full Appropriations Committee next for markup.

HUD announces rule dismantling protections for homeless transgender people



On Wednesday, the Department of Housing and Urban Development (HUD) announced a proposed modification to the 2016 portion of the Equal Access rule requiring all HUD funded housing services to be provided without discrimination on sexual orientation or gender identity. The rule change, which was first reported by the Washington Post in June, would allow single-sex homeless shelters to deny transgender people access based on their gender identity. Homeless and LGBTQ+ advocates have decried the rule, arguing that it will expose more transgender people to homelessness and violence. Democratic lawmakers also criticized the rule, with Sen. Brown issuing a statement saying the rule “would undermine the humanity of transgender people and their ability to access shelter in times of need” and Chairwoman Waters and Representative Jennifer Wexton (D-Va.) calling on HUD Secretary Ben Carson to reconsider the rule in a letter. According to the National Low Income Housing Coalition, the recent Supreme Court ruling that Title VII of the Civil Rights Act bars discrimination based on gender identity and sexual orientation may weaken HUD’s proposed rule.

Supreme Court strikes down CFPB leadership structure



On June 29, the Supreme Court ruled that a legal provision restricting the president’s ability to fire the director of the Consumer Financial Protection Bureau (CFPB) is unconstitutional. The ruling was praised by congressional Republicans, including Senate Banking Committee Chairman Mike Crapo (R-Idaho) and House Financial Services Committee Ranking Member Patrick McHenry (R-N.C.). Despite the ruling striking down the CFPB leadership structure, some, including former CFPB director Richard Cordray, argued that the ruling actually may ultimately be a win for the agency in that the Supreme Court stopped short of ruling the agency itself unconstitutional, leaving its authority fully intact. The ruling also calls into question the status of Federal Housing Finance Agency (FHFA) Director Mark Calabria, since the agency’s leadership structure is similar to that of the CFPB.

FHFA, HUD announce new tenant, homeowner protections

On June 29, FHFA announced that Fannie Mae and Freddie Mac will allow mortgage servicers to extend forbearance for multifamily properties for up to three months. During the course of forbearance for properties backed by the government-sponsored enterprises (GSEs), landlords are not allowed to evict tenants. Freddie Mac also announced on June 29 that it had created three additional forbearance options for multifamily borrowers impacted by COVID-19, including the option to delay the start of the repayment period following forbearance, an extension of the repayment period, and an extension of the forbearance period with an optional extended repayment period.

On Wednesday, HUD released an Eviction Prevention and Stability Toolkit to encourage public housing authorities and Housing Choice Voucher landlords to implement strategies to keep tenants housed during the COVID-19 crisis. HUD also announced that the Federal Housing Administration is allowing mortgage servicers to use an expanded menu of loss mitigation tools to assess homeowners’ eligibility for options to bring their mortgages current at the end of their COVID-19 forbearance.

Trump threatens to end fair housing rule



In a tweet on June 30, President Trump threatened to revoke the Obama-era Affirmatively Furthering Fair Housing (AFFH) rule, which he argued is “having a devastating impact on these once thriving Suburban areas.” The rule, which was adopted in 2015, provides mechanisms for enforcing the Fair Housing Act of 1968 in local communities that fail to address continuing racial segregation. In January, HUD published its proposal for an updated AFFH rule, which would redefine fair housing standards, eliminate the assessment tool used to map racial segregation, and encourage local municipalities to roll back regulations that hinder housing production. “Scrapping the rule would completely remove an incentive for state and local entities getting federal money from HUD to engage in equitable housing practices,” said David Dworkin, president and CEO of the National Housing Conference, in an interview with National Mortgage News. The timing of Trump’s tweet, months after the HUD announcement on the rule, indicates that it is less a policy announcement than a campaign strategy—as Glenn Thrush wrote in the New York Times, Trump’s tweet “was a pointed reminder of just how firmly Mr. Trump’s slashing style is rooted in the racially polarized conflicts of his early days in Queens.”

IRS provides relief for LIHTC properties

On July 1, the Internal Revenue Service (IRS) issued Notice 2020-53, which provides relief for Low-Income Housing Tax Credit (LIHTC) stakeholders impacted by the COVID-19 pandemic. The relief measures included extensions of the deadline to meet various requirements, including the 10% test, the 24-month minimum rehabilitation expenditure period, and the 12-month transition period for a qualified residential rental project. Additionally, LIHTC property owners will not be required to perform income recertifications and allocating agencies will not be required to conduct compliance monitoring inspections or review through Dec. 31, 2020. Novogradac will have several virtual events covering these IRS relief provisions, including the Novogradac 2020 Affordable Housing Friday Forum on July 17 and the Novogradac Online Property Compliance Workshop on Aug. 11.

The IRS and the Department of Treasury also published a proposed rule on July 1 repealing the Housing Credit compliance monitoring sample size methodology that was adopted in February 2019. The new rule returns to the previous standard of required inspection before the 2019 change.