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Weekly update from the National Housing Conference
News from Washington I By Quinn Mulholland
FHFA says borrowers won’t have to pay lump sum at end of forbearance

On Monday, Federal Housing Finance Agency (FHFA) Director Mark Calabria announced that borrowers in forbearance with a Fannie Mae or Freddie Mac-backed mortgage are not required to repay missed payments in one lump sum. NHC President and CEO David Dworkin previously called for additional clarity on the issue of forbearance in an interview with the South Florida Sun-Sentinel, saying “we need a clear, concise national approach to mortgage forbearance. Otherwise, it will continue to be confusing to borrowers and more labor intensive for servicers.” FHFA's announcement comes as new data from Black Knight shows that 6.4% of all mortgages, representing 3.4 million borrowers, are now in forbearance plans. The percentage of mortgages in forbearance is even higher—almost one in ten —for borrowers with mortgages backed by the Federal Housing Administration or the Department of Veterans Affairs, according to the Mortgage Bankers Association (MBA). In a recent interview with the Wall Street Journal, Calabria said his first priority is ensuring that Fannie Mae and Freddie Mac are strong enough to survive the economic crisis resulting from the COVID-19 pandemic.
Renters struggle to cover housing costs as May rent comes due

May 1 marked the second time rent was due for many tenants across the country since the COVID-19 pandemic emerged as a public health and economic crisis in America. According to a recent analysis by the Terner Center for Housing Innovation at UC Berkeley, nearly 16.5 million renter households have at least one worker in an industry likely to be affected by the economic impacts of the Coronavirus, and among likely-impacted renter households, more than 7.1 million were already experiencing housing cost burdens before the crisis. Given the difficulty many tenants are having making rental payments, tenant groups in cities including New York , Seattle , Philadelphia and Miami have called for rent strikes to exert pressure on landlords and the government to cancel rent payments. Many housing industry leaders, however, have warned that rent strikes will likely cause ripple effects that may end up hurting tenants themselves. In an  op-ed , Dworkin echoed these concerns, writing, “Participating in a rent strike is like drinking poison and expecting your landlord to die.”
States and cities face budget shortfalls, call for federal help

The economic effects of the COVID-19 pandemic have taken a toll on the budgets of local governments across the country, affecting their ability to support key housing programs. A recent analysis from the Center on Budget and Policy Priorities using projections from the Congressional Budget Office found that state budget shortfalls from the economic crisis could reach $650 billion over three years. Cities and other local governments, too, face mounting budget concerns as a result of the pandemic, are considering measures to cut back programs, including housing aid. St. Louis, which is facing a roughly $40 million shortfall next year, is setting aside less in reserves than initially planned in order to maintain funding for housing programs at the same levels. New York Mayor Bill De Blasio, meanwhile, has proposed large cuts to his plan to build and preserve 300,000 units of affordable housing by 2026. In response to local budget shortfalls across the country, House Ways and Means Chairman Richard Neal (D-Mass.) called for federal assistance for states and cities as part of the next COVID-19 response package in a United States Conference of Mayors discussion with mayors across the country.
Homeownership rate reached a 7-year high before Coronavirus

On Tuesday, the Census Bureau released homeownership data for the first quarter of 2020, showing that the homeownership rate reached 65.3%, its highest level since the third quarter of 2013. Though the rate appeared to continue its upward trajectory from 2019, the Census Bureau noted that the increase over the fourth quarter of 2019 was not statistically significant, and the data were collected before the COVID-19 pandemic’s full economic impact took hold. “Data for the first quarter of 2020 continue to reflect the extremely strong housing market prior to the current COVID-19 pandemic and subsequent economic crisis,” MBA Chief Economist Mike Fratantoni told HousingWire . “Without a doubt, the rapid deterioration of the job market this spring will cause second quarter numbers to reverse course.” The National Association of Hispanic Real Estate Professionals also recently released its 10 th annual State of Hispanic Homeownership Report , showing that Hispanic homeownership mirrored the overall homeownership rate’s upward trajectory in 2019, reaching 47.5% before the pandemic. Homeownership advocates, however, sounded the alarm as the economic effects of the Coronavirus shrink the mortgage credit box , increasing the barriers to homeowernship for many. The MBA’s Mortgage Credit Availability Index fell 16% in March, with some lenders raising borrowing standards for home loans.
Chart of the Week
Housing starts and home sales tend to fall substantially in recessions

A recent blog post by Harvard Joint Center for Housing Studies Research Analyst Alexander Hermann looked to past recessions for lessons on the impact of COVID-19 on housing markets. According to the blog post, in quarters with a recession, year-over-year housing starts fell by an average of 20%, new home sales fell by an average of 15%, and real home prices fell by an average of 5%.
What we're reading
In an op-ed for the New York Daily News , former New York City Deputy Mayor Alicia Glen and former city Department of Housing Preservation and Development Commissioner Rafael Cestero argued that a rent strike in New York will only hurt the people it aims to help. “The only way to keep people in their homes, ensure quality housing, and keep buildings [financially] stable is to ensure that rent gets paid on time,” Glen and Cestero writes. Read the op-ed here .

The Center for American Progress published a report on the impact of the Coronavirus on rural America. According to the report, COVID-19 is starting to hit rural communities hard, and they are less able to successfully combat the virus due to “the lack of health care infrastructure resulting from hospital closures and a population with a high level of chronic health issues.” Read the full report here .

In a recent CityLab article, Manhattan Institute Senior Fellow Nicole Gelinas made the case that the density of New York City has increased the life expectancy of its most vulnerable residents and saved hundreds of thousands of lives. Despite being blamed for the rapid spread of Coronavirus in New York, Gelinas explains that the city’s density has actually historically had positive public health effects. Read the article here .

In an op-ed for HousingWire , UC Berkeley professor Carol Galante and Consumer Federation of America Senior Fellow Barry Zigas laid out a vision for how to help renters during the COVID-19 pandemic. They propose a program similar to the Paycheck to Paycheck Program, but "directed specifically at the businesses that own and operate rental housing." Read the op-ed here .
The week ahead
The National Housing Conference has been defending the American Home since 1931. We believe everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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