FHFA issued its anticipated Request for Input (RFI) on Fannie Mae and Freddie Mac’s (the Enterprises) single-family pricing framework and the process for setting upfront guarantee fees (G-fees). FHFA is requesting input on whether it is appropriate to link upfront G-fees (also known as Loan Level Price Adjustments) to the Enterprise Regulatory Capital Framework and whether a minimum threshold is appropriate for the Enterprises’ return on capital. G-fees are intended to cover costs of administration, expected credit losses, and the cost of capital to guarantee securities backed by single-family mortgage loans. NHC has advocated for Loan Level Price Adjustments to be eliminated altogether because G-fees are the appropriate mechanism for investors to pay for the guarantees on the timely payment of principal and interest on the mortgage-backed securities. Mortgage insurance premiums, required for Enterprise-backed mortgages with a Loan to Value greater than 80% already consider risk in pricing.

“Through this RFI, FHFA seeks input on how to ensure the pricing framework adequately protects the Enterprises and taxpayers against potential future losses, supports affordable, sustainable housing and first-time homebuyers, and fosters liquidity in the secondary mortgage market,” said FHFA Director Sandra Thompson. “We are committed to being transparent and to considering views from a diverse set of stakeholders and market participants.”

Comments are due to FHFA by Aug. 14. NHC is drafting a response to the RFI. If you are interested in joining NHC’s response working group, please reach out to bwebb@nhc.org.

Also last week, the House Financial Services Committee held a hearing, “The Current Mortgage Market: Undermining Housing Affordability with Politics,” examining the recent changes that featured testimony from Edward DeMarco, President of the Housing Policy Council, Kenny Parcell, President of NAR, Dr. Clifford Rossi, Professor-of-the-Practice and Executive-in-Residence at the Robert H. Smith School of Business of University of Maryland, and Janneke Ratcliffe, Vice President at the Housing Finance Policy Center of the Urban Institute.

NHC mourns the loss of Chester Hartman, a lifetime housing advocate whose work influenced progressive urban planning and housing policy for decades. Dr. Hartman served as Director of Research for the Poverty & Race Research Action Council (PRRAC) in Washington, D.C. He was a Fellow at the Institute for Policy Studies at the Transnational Institute in Amsterdam. Dr. Hartman held a PhD in City and Regional Planning from Harvard and served on the faculty of several prestigious universities. He also founded the Planners Network, a national organization of progressive urban and rural planners and community organizers. Dr. Hartman served on the editorial boards of Housing Policy Debate, Urban Affairs Quarterly, and Housing Studies, and authored several books on housing and urban planning.

“Chester was an integral part of a social justice movement that we all believed in, and that we hope is now re-emerging,” said PRRAC Executive Director Philip Tegeler. “Chester was a perfect match for PRRAC when we started up. He brought his prodigious organizing skills to build a broad network of social scientists, advocates and organizers to understand and attack the systemic challenges faced by poor people of color.”

“He was that rare Washington resource—a disciplined, passionate and progressive thinker and actor devoted to housing and social justice,” said NHC past-Governor Barry Zigas, who served as President of the National Low Income Housing Coalition (NLIHC) from 1984-1993. Hartman was a strong supporter of NLIHC since its inception and received the Cushing Niles Dolbeare Lifetime Service Award in 2013.

Sens. Todd Young (R-Ind.) and Brian Schatz (D-Hawaii) reintroduced the Yes In My Backyard (YIMBY) Act, a bill that looks to cut through discriminatory zoning policies and burdensome regulations that hinder housing and community development. The bill requires Community Development Block Grant recipients to report on their land use policies and submit plans for implementing policies in ways that benefit the jurisdiction, including encouraging high-density zoning, allowing manufactured homes in communities, reducing minimum lot sizes, and allowing single-room occupancy development where there is multifamily housing. It further requires explanations for community decisions not to adopt such policies to maintain transparency. A companion bill was introduced in the House by Reps. Brittany Pettersen (D-Colo.), Derek Kilmer (D-Wash.), Mike Flood (R-Neb.), and Emanuel Cleaver, II (D-Mo.). The YIMBY Act is supported by many state and local housing organizations, including NHC.

“Discriminatory local zoning and land use policies drive up housing costs in communities across America,” said Senator Young. “These policies exacerbate the housing affordability crisis and stifle the ability of Americans to move to areas of opportunity. My legislation will require cities, towns, and rural areas across America to face this reality under a new level of transparency and encourage them to cut these harmful regulations.”

Sens. Jon Ossoff (D-Ga.), Marco Rubio (R-Fla.), and Sherrod Brown (D-Ohio) reintroduced the Homes for Every Local Protector, Educator, and Responder (HELPER) Act of 2023, a bipartisan bill intended to help first responders and teachers achieve homeownership. Reps. John Rutherford (R-Fla.) and Bonnie Watson Coleman (D-N.J.) reintroduced companion legislation in the House of Representatives. The HELPER Act would create a new FHA financing program for first responders and teachers who are first-time homebuyers and eliminate requirements for a downpayment and mortgage insurance premium for these buyers.

“I’m working across the aisle to support Georgia’s teachers, first responders, and law enforcement officers by making homeownership more affordable for public servants who teach our kids and protect our families,” said Ossoff.

“Homeownership is a cornerstone of the American Dream. Our public servants’ ability to reside in the neighborhoods they serve is crucial to the strength and resilience of our communities. As already high housing prices continue to rise, the HELPER Act would ensure that our teachers and first responders can own a home in the communities they dutifully serve,” said Rubio.

The Senate bill’s cosponsors include Sens. Raphael Warnock (D-Ga.), Bob Menendez (D-N.J.), Richard Blumenthal (D-Conn.), and Catherine Cortez Masto (D-Nev.). The HELPER Act was initially introduced in the House and Senate in 2021.

The FHA announced its finalized new policies for faster payment of funds to mortgagees who assign a Home Equity Conversion Mortgage (HECM), or reverse mortgage, to HUD. HECM allows mortgagees to assign HECM mortgages to HUD when the mortgage reaches 98% of the Maximum Claim Amount. The new policy allows individuals with FHA mortgages to submit a request for Preliminary Title Approval when the HECM reaches 97%, reducing the time between eligibility and payment.

“Today’s changes simplify processes and pay mortgagee claims more quickly, providing meaningful relief to program participants as they navigate the unique challenges of today’s economic environment,” said Assistant Secretary for Housing and FHA Commissioner Julia Gordon.

HUD released its 2023 income limits that determine eligibility standards for both HUD and Low-Income Housing Tax Credit (Housing Credit) programs. A change in HUD’s methodology caused many to eagerly anticipate the release of this year’s limits. HUD updated its methodology due to the 2020 American Community Survey not being available, which typically informs the calculation.

The A Call To Invest in Our Neighborhoods (ACTION) Campaign is circulating a sign-on letter calling on Congress to support the newly reintroduced Affordable Housing Credit Improvement Act (AHCIA). ACTION is a coalition of over 2,400 national, state, and local affordable housing stakeholders, including NHC. The group strongly supports passing AHCIA to help address the affordable housing supply crisis.

“The bill would finance an estimated 1.94 million additional affordable homes over the next ten years. In all, the AHCIA includes over two dozen provisions, including changes that would help preserve existing affordable housing, facilitate Housing Credit development for extremely low-income households and in hard-to-serve communities, provide state Housing Credit allocating agencies new tools to strengthen program administration, and more,” the sign-on letter reads.

NHC encourages interested members to sign-on to the letter. Signatures are due by 5 pm ET on May 22.