Todman, Thompson testify before Congress

The Senate Committee on Banking, Housing, and Urban Affairs held a hearing entitled “Oversight of the Federal Housing Regulators” that featured testimony from Federal Housing Finance Agency (FHFA) Director Sandra Thomspon and Acting Secretary of the U.S. Department of Housing and Urban Development (HUD) Adrianne Todman on the actions that the agencies are taking to help make housing more affordable. Insurance costs featured prominently in the hearing as members of Congress sought answers on how to address increasing premiums and coinciding natural disaster events. The Committee also discussed the cost of environmental regulation and the role of FHLBanks. In her testimony, Todman highlighted the need to increase affordable housing supply, promote homeownership and wealth-building, advance sustainability and equitable development, and strengthen HUD’s internal capacity to deliver its mission.

“FHFA is working to ensure its regulated entities take steps to address barriers to affordable and sustainable housing,” said Thompson. “For homeowners, this work includes efforts to responsibly reduce closing costs, modernize underwriting and home valuation processes, increase efficiencies in loan origination and servicing, and identify products that meet the needs of historically underserved and rural communities. For renters, this work includes efforts to enhance tenant protections, provide access to better information and data, streamline the application process, as well as to strengthen asset management capabilities.”

Chairman Sherrod Brown (D-Ohio), in his opening remarks, highlighted some of the work both agencies are doing, such as HUD’s updated loan limits for manufactured housing and FHFA’s elimination of some up-front fees for home purchasing, but also emphasized the role that lawmakers play. “Congress also needs to do its part,” Brown said. “Last month, this Committee had a hearing on legislative proposals to help expand our housing supply and bring down the cost of housing. We must continue our bipartisan work to move forward commonsense proposals that will help expand housing options and reduce costs, and I look forward to continuing to work with Ranking Member Scott and our colleagues on this Committee toward that goal.” Ranking Member Tim Scott (R-S.C.) criticized some recent federal actions during his opening remarks, including proposals for rent control and updating energy efficiency standards and environmental mandates. 

Senate Subcommittee hears housing preservation strategies

The Senate Banking Committee’s Subcommittee on Housing, Transportation, and Community Development held a hearing on challenges preserving U.S. housing stock. Members asked witnesses about strategies to preserve affordable housing across the country and maintain affordability for existing affordable units. Witnesses for the hearing included Jesse Ergott, President and CEO of NeighborWorks Northeastern Pennsylvania; Robin Davey Wolff, Senior Director, Rural Communities at Enterprise Community Partners; and Chrisopher Volzke, Deputy Executive Director at Wyoming Community Development Authority.

Topics discussed included major repairs and rehabilitations for deteriorating homes, aging in place for seniors, Tribal housing, program layering, the challenges of using HOME funding as is, and a focus on rural areas that need investment. The Rural Housing Service Reform Act was also brought up as a way to improve rural housing and enable rental assistance to continue after mortgages mature on USDA Section 515 properties. 

In their written testimony, Wolff and Volzke mentioned the Neighborhood Homes Investment Act as an essential tool for achieving these goals. “Preservation is faster and more cost effective than new construction,” noted Wolff. “It also provides housing stability and prevents displacement of existing residents, homeowners and renters alike. For this reason, the inclusion of homeownership and home repair and the preservation conversation is very important and appreciated. The need for single family home repair is especially true in rural communities, where we see higher rates of homeownership and homes in need of significant repair.”

Volzke also discussed Fannie Mae and Freddie Mac as so-called Tax-Exempt Controlled Entities, a classification Volzke said forced Fannie Mae to withdraw from multi-investor funds, which negatively impacts housing credit investment.  

NFHA urges Administration to release final AFFH rule

The National Fair Housing Alliance (NFHA), along with almost 300 civil rights, housing, faith, environmental organizations, and local officials, including NHC, sent a letter to the Biden Administration urging the release of the U.S. Department of Housing and Urban Development’s (HUD) final “Affirmatively Furthering Fair Housing” (AFFH) rule. The AFFH rule, proposed in Jan. 2023, would take steps toward HUD, ensuring everyone can live in affordable, healthy, well-resourced neighborhoods free from racial disparities. NHC strongly supports the AFFH rule and its reinstatement with improved policies, as explained in its 2019 comment letter. 

“As you yourself have recognized, the AFFH rule is a vital tool to ensure that there are equitable and affordable housing opportunities and stronger, more viable neighborhoods for low-income residents and communities of color across the country,” NFHA’s letter reads. “In doing so, it can strengthen the U.S. economy as a whole while redressing the legacy of state-sponsored segregation and discrimination. We implore the White House to follow through on its commitments and release the final AFFH rule as soon as possible so that more communities can have affordable and accessible housing options that offer access to fresh air, clean water, good public transportation, quality care and schools, living wage jobs, quality healthcare, healthy foods, and affordable credit, free from discrimination.”

FHFA releases 2023 Housing Mission Report

The Federal Housing Finance Agency (FHFA) released its 2023 Housing Mission Report, which describes how Fannie Mae and Freddie Mac (the Enterprises), and the Federal Home Loan Banks (FHLBanks) are promoting access to financing for affordable and equitable housing, as well as economic development.

According to the report, the Enterprises purchased over 136,000 single-family mortgages for low- and moderate-income borrowers through their core affordable housing programs in 2023, and each introduced new enhancements to the programs. They also purchased a collective 15,000 Special Purpose Credit Program loans supporting underserved community borrowers. Fannie Mae reported over $5 million in downpayment or closing cost assistance through HomeReady First, and Freddie Mac reported close to $4 million in downpayment or closing cost assistance through BorrowSmart Access. The Enterprises also invested over $1.7 billion in Low-Income Housing Tax Credit (LIHTC) equity and partnered with rent payment data collection vendors to format rent information to disseminate to credit bureaus as part of their Equitable Housing Finance Plans. Finally, the report notes that the FHLBanks awarded $446.9 million through their Affordable Housing Plans in 2023, about $180 million more than in 2022. The FHLBanks have been undergoing a comprehensive review by FHFA on their role in bolstering affordable housing nationwide.

“FHFA maintains a keen focus on ensuring the entities we regulate fulfill their missions to support access to housing opportunities in a safe and sound manner,” said FHFA Director Sandra Thompson. “Ongoing affordability challenges throughout the country only heighten the importance of this responsibility.”

HUD boosts homeownership opportunities in Tribal communities

The U.S. Department of Housing and Urban Development (HUD) unveiled a final rule to expand lender engagement in the Section 184 Indian Housing Loan Guarantee program. The initiative strengthens oversight to meet the program’s growing demands, ensuring its sustainability as a critical resource for Native American families aspiring to homeownership. HUD collaborated closely with Tribal leaders and stakeholders to fortify the program, pivotal in fostering homeownership across Indian Country.

“The Section 184 program is a vital tool to so many Native American homebuyers,” said HUD Principal Deputy Assistant Secretary for Public and Indian Housing Richard Monocchio. “The new regulations will bring additional transparency and predictability to this important program and is another example of the actions this Administration has taken to expand homeownership opportunities.” 

The Section 184 program allows eligible borrowers to access mortgage loans for various purposes, from purchasing their first home to financing community housing projects. With over $10 billion in guaranteed mortgage loans, the program is a vital tool for Native American homebuyers, offering flexible terms, minimal down payments, and reduced fees. The updated regulations enhance borrower protections and promote broader lender participation to expand access to mortgage capital in Indian Country.