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NCSHA Washington Report | November 18, 2022

Published on November 18, 2022

Web Washington Report Graphics - November 18, 2022

At a White House meeting this week, a senior administration official told a group of housing industry representatives that the keys to success in securing more federal funds for affordable home building and apartment construction in the lame duck congressional session now underway are “urgency and consensus.”

Urgency because the inflation problem is increasingly a housing problem. While it’s true that housing cost data are lagging indicators and rents are cooling, economists expect housing to continue to drive inflation, in part because the underlying issue is chronic undersupply. And it’s clear the Fed’s rate hikes have hammered lower-income renters and home buyers.

Urgency also because the next six weeks will be the best opportunity in recent memory, and maybe for the foreseeable future, for fiscal policy do what monetary policy can’t: incentivize in a major way the production of desperately needed new affordable homes and apartments the market won’t produce on its own.

That’s where consensus comes in.

All of us at the White House meeting represent constituencies with long lists of federal priorities. At the administration’s urging, the groups are aligned on a tightly focused lame duck advocacy agenda that emphasizes our unified support for congressional action that will generate the most housing most quickly.

It starts with the Housing Credit, the housing program with the deepest well of bipartisan support, from which consensus legislation has developed over many years. The current, comprehensive version is the Affordable Housing Credit Improvement Act.

The bill’s signature supply-expanding provisions — cutting in half the “50 percent test” for bond financing and restoring and expanding the 9 percent credit — top the to-do list. An $11 billion federal investment through these moves would generate 750,000 new affordable apartments. That’s more than bang for the buck — it’s boom.

The bipartisan consensus the Housing Credit reflects means the program can punch above its weight in lame duck deal-making. Politically, with heavy hitters from both parties among its proponents, the Housing Credit can act as the glue that helps bind together a tax extender bill that includes other top priorities for both parties. In terms of policy, it’s the model for a long-needed complementary incentive for affordable for-sale home construction: the Neighborhood Homes Credit.

The Biden-Harris Administration has been keenly focused and highly effective in using many of its available federal authorities to spur more housing supply. But there’s no “affordable housing party” in Congress — which is a good thing. If there were one, it would have been voted out of the majority in the House four times in the last 15 years.

In fact, Democrats and Republicans both support a wide range of federal housing legislation, as the Bipartisan Policy Center recently summarized. The most durable existing policies, like the Housing Credit, can scale up at times of need in any political environment because they have champions in both parties.

We will be pressing them to deliver in the lame duck, with urgency.

Stockton-Williams-Washington-Report

Stockton Williams | Executive Director

Washington Report will return on December 2.

State HFA Emergency Housing Assistance


In This Issue


Almost-Final Election Results Show Republicans Win House, Democrats Retain Senate, Parties Split Governor Races
While a handful of House election results have not yet been determined, recent announcements confirmed the Republicans will have a majority of at least 218 House seats in the next Congress. Democrats will have at least 50 Senate seats, making them the majority party with Vice President Harris’ vote. Democrats will have a clear 51-seat majority if Georgia incumbent Raphael Warnock wins his December 6 run-off. Since we wrote our preliminary report on the election results last week, Democratic incumbents have secured reelection for governor in Arizona and Oregon and the Republican challenger Joe Lombardo was declared the winner in Nevada; the Alaska result has not been announced.

ACTION Campaign Readies Letter to Congress Advocating Housing Credit Priorities in the Lame Duck Session
This week, the ACTION Campaign circulated a sign-on letter that will be sent early next week to Congress urging it to expand Housing Credit authority — at a bare minimum by reinstating the 12.5 percent cut the program suffered in 2022 after a previous cap increase expired — and enhance the use of existing Private Activity Bond (PAB) authority for rental housing production by lowering the bond financing threshold from 50 to 25 percent. Given the need to weigh in quickly, the letter closed for signatures earlier today, having been circulated on Monday through the ACTION network, as well as by NCSHA and Enterprise Community Partners, who co-chair ACTION. All ACTION members were automatically added to the list of signatories, with an option to opt out. Non-ACTION members were given the opportunity to sign the letter and join ACTION. If your organization is not already an ACTION member, you can join for free to be included in the campaign’s advocacy work. For more information, contact Jennifer Schwartz.

FHFA Announces Lower Annual Multifamily Caps for Fannie Mae, Freddie Mac
The Federal Housing Finance Agency (FHFA) announced last week the 2023 multifamily housing loan purchase caps for the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The 2023 caps will be set at $75 billion for each firm, down from $78 billion in 2022. FHFA is reducing the caps because it expects the multifamily mortgage market to contract slightly next year. As it has since 2020, FHFA also will require at least half of each GSE’s multifamily business in 2023 to be for affordable housing or other mission-driven activities. An appendix lists the various activities that count as mission-driven, which once again include loans on properties financed by the Housing Credit. FHFA released a fact sheet summarizing the new caps in more detail.

FHA Annual Report Touts Agency’s Covid-19 Loss Mitigation Activities, Lending to Disadvantaged Communities
The Federal Housing Administration (FHA) Tuesday released its 2022 Annual Report to Congress. The report finds FHA continued to play a critical role in supporting home financing for first-time home buyers and other underserved borrowers in fiscal year 2022. Eighty-four percent of the home purchase mortgages endorsed in FY 2022 went to first-time home buyers, 37 percentage points higher than other market participants. Compared to other market participants, FHA served three times as many Black borrowers by share of its total forward mortgage insurance endorsements than the rest of the market and two times as many Hispanic borrowers. The report also says the financial wealth of FHA’s Mutual Mortgage Insurance Fund (MMIF) increased $41.2 billion in FY 2022 to $147.7 billion. During a call for stakeholders, FHA Commissioner Julia Gordon said the MMIF’s improving financial health has prompted FHA to consider adjustments to mortgage insurance premiums, but no decision would be announced until after Congress passes HUD’s FY 2023 appropriations bill. See NCSHA’s blog for more information.

NeighborWorks America Extends Housing Stability Counseling Program
NeighborWorks America announced on November 4 it would extend the performance period for grantees receiving funds through its Housing Stability Counseling Program (HSCP). HSCP is a $100 million fund established through the American Rescue Plan Act of 2021 to provide grants for housing counselors working to stabilize their communities in the wake of the Covid-19 pandemic. The new performance period will begin April 1, 2023, and run through March 31, 2024. NeighborWorks also announced a reallocation option for grantees who have already fully expended their grant funding. There will be a mandatory virtual meeting on December 7 for HFAs interested in participating in the program’s extension period. If you are an HSCP grantee and have not received access details for this meeting, contact Glenn Gallo.

Research Efforts Continue on Emergency Rental Assistance Program
HUD recently announced funding awards to Abt Associates, Princeton University, and the University of Pennsylvania in collaboration with the University of California at Berkeley to assess the impact of the Emergency Rental Assistance (ERA) program, “with a focus on housing stability and eviction outcomes.” Data and research published by the Treasury Department earlier this fall show ERA administering agencies, which include 28 state HFAs, have assisted seven million households, with assistance overwhelmingly serving population groups at highest risk of eviction, including Black renters, renters with the lowest incomes, and female-headed renter households. Preliminary results of a study by the University of Pennsylvania and the National Low Income Housing Coalition indicate state-run programs had fewer documentation requirements and more readily embraced administrative flexibilities to expand access, such as “fact-specific proxies” for determining eligibility, than local programs.

NCSHA in the News
Cleveland.com, 11.7.22, On the Move

Looking Ahead…

Legislative and Regulatory Activities

NCSHA, State HFA, and Industry Events

  • December 1 – 2 | Novogradac 2022 Tax Credit Housing Finance Conference | Las Vegas, NV
    Jennifer Schwartz will speak at this event.
  • December 5 | Hotel Room Block Closes and Early Registration Discounts End | NCSHA’s HFA Institute 2023 | Washington, DC
  • January 8 – 13 | NCSHA’s HFA Institute 2023 | Washington, DC

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