The Senate Committee on Banking, Housing, and Urban Affairs held a hearing on Thursday called The State of Housing 2023. The hearing offered an overarching view of the housing market and the challenges and opportunities to advance affordable housing at a time when interest rates and rent costs are adding extreme pressure to family budgets. Witnesses for the hearing included Dr. Christopher Herbert, Managing Director of Harvard Joint Center for Housing Studies, Dr. Robert Dietz, Chief Economist and Senior Vice President for Economics and Housing Policy at the National Association of Home Builders, and Lance George, Director of Research and Information at the Housing Assistance Council. 

The discussion centered mainly on the need for more housing supply to help bring housing affordability under control. Other topics included the aging population and housing stock, flood insurance premiums, regulatory construction costs, and employer-assisted housing programs. Sen. Mark Warner (D-VA) mentioned the Low-Income Housing Tax Credit and the Neighborhood Homes Investment Act as options to help produce more housing. Drs. Herbert and Dietz agreed on the importance of such investments. 

“It’s necessary to prime the pump in these areas where demand has fallen,” said Dr. Herbert. “That’s an incredibly important use both for rehabilitation and new construction"

The CFPB issued an advisory opinion aiming to protect borrowers from mortgage comparison shopping platforms that provide misleading mortgage options. The opinion outlines how some sites can potentially violate the Real Estate Settlement Procedures Act (RESPA) by steering shoppers to lenders that use pay-to-play tactics. The announcement notes that rising interest rates are causing consumers to seek the best mortgage deal. Additionally, some platforms present consumers with ranked lists of mortgage providers, which some consumers assume is a fair and neutral presentation of the providers that best meet their needs. However, according to the CFPB, the website operator has put a thumb on the scale when consumers are led to lenders simply because that lender pays referral fees. As a result, consumers can end up with lower-quality lenders and higher costs.

“Given the rise in mortgage interest rates, it is even more important for homebuyers to shop and compare loan offers,” said CFPB Director Rohit Chopra. “We are working to ensure that online platforms are not manipulating their search results in order to coerce kickbacks from lenders.”

Last week, HUD announced new guidance to strengthen the importance of supportive service programs and the use of supportive services funds to assist independent living seniors. This guidance includes the scope, content, and timeline requirements for supportive services plans. In addition, this update seeks to provide eligibility clarifications for project-based rental assistance contracts and to support property owners in developing their program plans. Eligibility for this program under HUD’s Multifamily Section 202 Supportive Housing for the Elderly details servicing to include community common areas, such as fitness equipment that promotes senior residents’ health and independence.

“Supportive services that facilitate independent senior living, increase safe socialization opportunities, and provide health and wellness benefits are a key component of our efforts to provide and expand deeply affordable rental housing for the nation’s low-income senior population,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon.

Last week, a group of Senators sent a letter to FHFA Director Sandra Thompson urging her to review Fannie Mae and Freddie Mac’s (the Enterprises) nonperforming and reperforming loan sales programs and the overall effects on homeowners. Sen. Sherrod Brown (D-OH), chair of the Senate Banking Committee, penned the letter, and Sens. Jack Reed (D-RI), Ron Wyden (D-OR), Tina Smith (D-MN), and Elizabeth Warren (D-MA) signed it. The Senators called for more transparency on the outcomes of homeowners whose reperforming loans are sold, claiming that 60% of the loans sold to investors resulted in a homeowner’s displacement.

“With a severe shortage of available and affordable housing for aspiring homeowners, it is critical that the Enterprises remain committed to keeping families in the homes they have and to keeping our housing stock in the hands of individual homeowners, not institutional investors,” the letter reads. “Based on data reported from the Enterprises and the Federal Housing Finance Agency (FHFA), it is not clear that the nonperforming and reperforming loan sales programs meet that standard.”

Sens. Ben Cardin (D-MD) and Steven Daines (R-MT) introduced a bipartisan bill called The New Markets Tax Credit (NMTC) Extension Act that would permanently authorize the NMTC. The bill extends the NMTC program that provides a federal tax credit for businesses or economic development projects in areas with poverty rates of at least 20% or median incomes at or below 80% of the area median indefinitely. Currently, the program is set to expire in 2025. Sens. Chuck Schumer (D-NY.), Bill Cassidy (R-LA), Maria Cantwell (D-WA), Tim Scott (R-SC), Robert Menendez (D-NJ), and Marsha Blackburn (R-TN) cosponsored the bill. This is the sixth time an NMTC permanence bill has been introduced.

“The New Markets Tax Credit is a win-win-win – it has been an invaluable tool for encouraging investment into our communities, creating good-paying jobs in Montana, and spurring growth in local economies across the nation. It’s time we make a permanent commitment to helping our Montana communities thrive and economies grow,” said Senator Daines.

HUD Secretary Marcia Fudge announced that nearly 2 million homeowners kept their homes during the COVID-19 pandemic through FHA forbearance and home retention programs. HUD notes that of the 2 million, over 1.8 million FHA borrowers received forbearance, and over 1 million received a payment retention option. HUD’s data also provides a breakdown of assistance by race and state distributed between March 2020 through Dec. 2022. FHA recently announced that the COVID-19 toolkit would be available for 18 months to assist eligible borrowers struggling to remain in their homes.

“These impactful and effective foreclosure prevention tools will help struggling borrowers find the right option to help them get back on their feet and keep them in their home. These tools have been so successful already, which is why FHA worked to enhance them further and include more borrowers,” said Secretary Fudge.