Administration extends FFB risk-sharing program indefinitely; takes action to support manufactured homes

The Biden Administration announced a series of new actions to boost housing supply and lower costs as part of its overall commitments made through the Housing Supply Action Plan and the Blueprint for a Renters Bill of Rights. Chiefly, the fact sheet revealed that the Administration is indefinitely extending the Federal Housing Administration (FHA) and Federal Financing Bank (FFB) Risk Sharing program and that HUD will issue a proposed rule to improve the HOME Investment Partnerships program (HOME). It also includes new guidance regarding non-rent fees and preventing evictions. The National Association of Affordable Housing Lenders (NAAHL), NHC, and others have advocated for the FFB program to be made permanent for the past five years. However, the Mortgage Bankers Association expressed their concern that the program undermines the FHA Multifamily Accelerated Processing program and creates “unfair competition with the private sector”.

The FFB risk sharing program, which provides low-cost capital to housing finance agencies, lapsed in 2019 despite being considered successful. The Biden Administration reinstated the program in 2021 with an expiration date of September 2024.

“FFB funding is an excellent source for state and local housing finance agencies (HFAs) to access long-term, fixed-rate financing to construct and preserve affordable multifamily rental housing,” said NHC President and CEO David Dworkin in a press release lauding the decision. “Since its inception, the FFB Risk Sharing Program has closed or committed $4.9 billion for 42,000 apartments. With the program’s reinstatement in 2021 and now indefinite extension, it will ensure continued access to funds for HFAs to facilitate the creation of new affordable housing units.”

NHC joined a recent industry letter led by the NAAHL asking key officials to immediately extend FFB funding indefinitely under existing legislative authorities. The extension of the program will produce an estimated 38,000 additional housing units over the next decade, according to the announcement.

“Today’s action solidified an efficient and effective tool to boost housing supply – and we need to protect and strengthen every tool in our toolbox,” said Sarah Brundage, President and CEO of NAAHL. “Next, we look forward to continuing to work with the Administration on expanding and strengthening the program – notably expanding the program to qualified community development financial institutions (CDFIs) as lenders.”

The fact sheet detailing the Administration’s announcements notes a new $225 million funding opportunity for manufactured housing through HUD called the Preservation and Reinvestment Initiative for Community Enhancement (PRICE) Program. The program will support the preservation and revitalization of manufactured housing communities through services for home rehabilitation, replacement of dilapidated units, infrastructure upgrades, climate resilience, and additional sustainability services, including housing counseling and eviction prevention.

Additionally, FHA published a new draft policy for public feedback to promote the preservation and affordability of manufactured homes and communities. When implemented, the changes will allow resident-owned cooperatives and other entities to utilize FHA-insured financing under the Multifamily 223(f) program, which can be layered with PRICE grant funding to support individuals and families. HUD also announced an update to FHA’s Title I Manufactured Home Loan Program, adjusting calculations for loan limits to meet current market pricing for manufactured homes. 

In a coordinated effort alongside FHA, Ginnie Mae also announced revisions to its Title I Loan Securitization program to reduce barriers to entry and increase lender participation in its loan program. The alignment with FHA to make tandem improvements to manufactured housing lending is expected to act as a force multiplier to expand the availability of affordable housing options.

FHFA revises credit reporting requirement timeline

The Federal Housing Finance Agency (FHFA) announced it is aligning the implementation of its bi-merge credit reporting requirement and the transition from the Classic FICO credit score model to the FICO 10T model. Both implementation efforts will occur in the fourth quarter of 2025 to support market participants with the change process. The move comes after stakeholders expressed concern with the initial timeline. FHFA is also accelerating the timeline to publish historical data of VantageScore 4.0 to this year’s third quarter. Initially, the data would not be available until the first quarter of 2025. Industry feedback, which emphasized the importance of using historical data to allow for robust analysis of the new models, influenced FHFA’s decision.

“Synchronizing bi-merge credit reporting with the implementation of the new credit score model requirements will reduce complexity for market participants, which is a key objective of our transition efforts,” said FHFA Director Sandra Thompson. “The release of historical data on tens of millions of Enterprise loan acquisitions affirms the commitment of FHFA and the Enterprises to a robust, transparent implementation process.”

$300 million announced for Housing Trust Fund, Capital Magnet Fund

FHFA announced that the Housing Trust Fund (HTF) and Capital Magnet Fund will receive $301 million for affordable housing initiatives from Fannie Mae and Freddie Mac (the Enterprises) for FY 2025. The numbers are notably smaller than previous years, a 42% drop from last year’s $545 million. The total allocation for 2021-2022 surpassed $1 billion. The funding amounts are allocated based on new business purchases by the Enterprises. Market conditions, such as high interest rates, reduced the overall purchases the Enterprises’ made in 2023.

The HTF, which allocates funding to states and entities to produce or preserve affordable housing through acquisition, construction, or rehabilitation, is set to receive $196 million. The CMF, overseen by the Treasury Department and competitively awards funds to finance affordable housing, economic development, and community service facilities, will receive $105 million.  

HUD, VA announce $14 million to house homeless veterans

HUD and the US Department of Veterans Affairs (VA) announced $14 million in funding for HUD-Veterans Affairs Supportive Housing (HUD-VASH) vouchers. The funds will provide over 1,400 vouchers to 66 Public Housing Agencies (PHAs) to help veterans and their families obtain permanent, sustainable housing to prevent homelessness. “HUD-VASH has been one of the most effective tools in our toolkit, empowering VA and HUD to provide more housing and wraparound services to more homeless and at-risk Veterans than ever before. Together, we will not rest until Veteran homelessness is a thing of the past,” said VA Secretary Denis McDonough.

PHAs currently administer over 110,000 HUD-VASH vouchers. Joint efforts by HUD, the VA, and the United States Interagency Council on Homelessness have delivered a 4% decrease in veteran homelessness since 2020 and a 52% decrease since 2010. Additionally, HUD and the VA announced they permanently housed more than 46,000 homeless veterans in 2023, surpassing last year’s goal by 22.5%. “These HUD-VASH voucher awards help us to reach that goal. We will continue to work with our local Veterans Affairs Medical Center partners at public housing agencies across the country so we can get veterans and their families off the streets and into affordable housing,” said HUD Secretary Marcia Fudge.