FHFA announced it’s delaying the effective date of higher upfront fees for borrowers with a debt-to-income (DTI) ratio above 40 percent. The three-month delay pushes the change’s effective date from May 1, 2023, to Aug. 1, 2023. FHFA said the delay is in response to feedback from mortgage industry stakeholders about operational challenges to implementing the DTI-based fee. The delay will help “ensure a level playing field for all lenders to have sufficient time to deploy the fee.”

FHFA initially made the changes in January with a revamped loan-level price adjustment (LLPA) matrix that differentiated loan pricing by their purpose. Some praised the new matrix for its mission-focused pricing adjustments for certain second homes and LLPA waivers for first-time homebuyers and buyers using certain loan products. However, the matrix also drew criticism for including LLPA for loans with a DTI of 40 percent or higher. The Mortgage Bankers Association sent a letter arguing that DTI ratios are not strong indicators of a borrower’s ability to repay and that fluctuations in income can present operational challenges for the underwriting process.

Several stakeholders are calling for a full repeal of the DTI fee. NHC also expressed concerns about the impact of changes in pricing on borrower confidence in the homebuying process.

“FHFA was very responsive to the concerns of lenders and other stakeholders in extending the effective date and committing to work to resolve outstanding issues that may cause unintended consequences,” said NHC president and CEO David M. Dworkin. “We will use the extra time offered by the change in the effective date to continue working with FHFA to explore alternatives that will not pose undue hardships on borrowers and lenders,” said MBA President and CEO Bob Broeksmit in a statement. The MBA led the advocacy to address the DTI issue.

The Treasury Department released a report on the second anniversary of the American Rescue Plan (ARP), offering new data analysis on ARP’s economic recovery impact. The review shows that governments have used State and Local Fiscal Recovery Funds (SLFRF) to prevent cuts in government services and respond to immediate pandemic consequences, but also to invest in housing, with almost $16 billion going to 2,100 projects across the United States. In addition, SLFRF dollars spurred a 29 percent increase in housing investments after Treasury issued new guidance that allowed for more flexible housing use.

The report also states that the Emergency Rental Assistance (ERA) program made $46.55 billion available for housing stability, with $25 billion coming from the ERA1 program. And $21.55 billion came from the ERA2 program established by the ARP. The report also notes that the ERA program catalyzed a broader expansion of lasting eviction-prevention infrastructure, stating that at least 180 jurisdictions across 36 states launched or strengthened their eviction diversion programs. Finally, the report says that the Homeowner’s Assistance Fund (HAF) provided a lifeline for over 230,000 homeowners at risk of foreclosure by providing $10 billion in direct assistance for loss mitigation.

HUD announced the establishment of two new offices “to better serve communities who face the direct impacts of weather-related disasters. The agency is creating the Office of Disaster Management (ODM) in the Office of the Deputy Secretary and the Office of Disaster Recovery (ODR) in the Office of Community Planning and Development. HUD said these new offices would help expedite disaster recovery and the allocation of $3.3 billion in Community Development Block Grant-Disaster Recovery (CDBG-DR) funds.

HUD Secretary Marcia L. Fudge announced the new offices in Jackson, Ky., a state receiving nearly $300 million in funds. And HUD Deputy Secretary Adrianne Todman made the announcement in Ft. Myers, Fla., a state receiving more than $2.7 billion. HUD’s creation of these new offices follows its request for public feedback on simplifying and modernizing CDBG-DR and CDBG-mitigation funds to ensure a more equitable distribution of funds. According to HUD’s Climate Action Plan, the agency is committed to equitable allocation of funds for underserved communities and communities of color.

“We know that far too often, not-so-privileged households bear the brunt of weather-related disasters. We will ensure they have access to the resources they need to rebuild and recover, equitably. Today’s announcement sends a strong message: equity is elemental to the disaster recovery work of HUD and the Biden-Harris Administration.” said Fudge. You can see the list of CDBG-DR allocations here.

HUD announced it is awarding nearly $6 million to public housing agencies and state housing authorities to improve the safety and health of low-income families’ homes. The agency will distribute the money via ten Radon Testing and Mitigation Demonstration program grants. HUD said the funding would protect more than 6,500 people in low-income families from cancer risk caused by exposure to radon. “In addition, we are investing in increasing energy efficiency to address health and safety risks in the home as well as supporting coordination with other funding streams,” said HUD Secretary Marcia Fudge. You can see the full funding breakdown here.