President Obama recently visited the Department of Housing and Urban Development to speak on the transition of HUD Secretary Shawn Donovan to Julian Castro. He offered words of support and encouragement to HUD, but applicable to everyone working hard in the affordable housing industry. Thanks to Tom Cusack at the Oregon Housing Blog for posting it.
Reports on developments related to the National Housing Trust Fund (NHTF) are a regular feature in Memo to Members. National Low Income Housing Coalition (NLIHC) and our partners are pursuing multiple avenues to provide revenue for the NHTF. Several NLIHC members have requested a recap of the current state of play. Here’s a brief summary.
Responding to “state, local and tribal leaders who are working to increase the safety and security of their communities,” on June 14th announced the National Disaster Resilience Competition that, under HUD’s direction, will award “nearly $1 billion” to communities that experienced “Presidentially-declared major disaster in 2011, 2012, and 2013” to “help them rebuild and increase their resilience to future disasters.” $820 million will be available for applications from all such communities with the balance – some $180 million – will be made available to states affected by Hurricane Sandy to “address critical housing needs, building on the successful model set forth by HUD’s Rebuild by Design competition.”
HUD is expected shortly to publish a Notice of Funding Availability that will insure the funds support innovative resilience projects at the local level while encouraging communities to adopt policy changes and activities that plan for the impacts of extreme weather and climate change.” It appears that up to 50 areas in Alaska, Idaho, Oregon and Washington might qualify for the assistance. For more on the National Disaster Resilience Competition, visit http://www.whitehouse.gov/the-press-office/2014/06/14/fact-sheet-national-disaster-resilience-competition
National Low Income Housing Coalition, “Memo to Members,” May 23, 2014
Two identical HUD policy notices implement the FY14 Appropriations Act provision that set aside $5 million for tenant protection vouchers for low income households who may have to pay more than 30% of their income for rent at three categories of HUD-assisted multifamily properties in low-vacancy areas. Notice HUD 2014-7 is from the Office of Multifamily Housing Programs and HUD 2014-13 is from the Office of Public and Indian Housing.
The three types of eligible HUD-assisted multifamily housing are those that experienced:
- The maturity of a HUD-insured, HUD-held, or Section 202 loan during FY14 or previous years, and that required the permission of the Secretary in order to prepay a loan. These include Section 236, Section 221(3) Below Market Interest Rate (BMIR), and Section 202 Direct Loan programs.
- The expiration of a rental assistance contract for which the tenants are not eligible for enhanced voucher or tenant protection assistance under existing law. These include properties with a Rental Assistance Payment (RAP) contract that expired before FY12, or a property with a Rent Supplement (Rent Supp) contract that expired before FY2000.
- The expiration of affordability restrictions accompanying a mortgage or preservation program administered by the Secretary. These include Section 236, Section 221(d)(3) BMIR, or Section 202 Direct Loan mortgages that mature during FY14 or previous years, and for which permission from HUD is not required, but the underlying affordability restrictions expired with the maturity of the mortgages. This category also includes properties with stand alone “Affordability Restrictions” that expire in FY14 or that expired in previous years.
Other key provisions in the Notice include:
- Owners of eligible properties must apply for the assistance for residents.
- Requests from owners will be accepted on a rolling basis until funding has been exhausted.
- The tenant protection assistance may be either an enhanced voucher or a project-based voucher.
- Public housing agencies (PHAs) must administer the vouchers. A public housing PHA may decline to participate; if so, HUD will attempt to identify an alternative PHA willing to administer the vouchers.
The $5 million is a set-aside from the $130 million FY14 appropriation for all tenant protection vouchers. A $10 million set-aside was initiated in FY12 (see Memo, 3/23/12 and 4/19/13) by Senators Richard Durbin (D-IL) and Scott Brown (R-MA).
Notice HUD 2014-7 is at: http://1.usa.gov/1tilMec
Notice HUD 2014-13 is at: http://1.usa.gov/1peTFPt
National Low Income Housing Coalition, “Memo to Members,” May 23, 2014
The Office of Public and Indian Housing (PIH) sent a letter to all public housing agency (PHA) executive directors on May 22, reminding them that households with “enhanced vouchers” have a “right to remain” in their homes.
Enhanced Vouchers (EVs) are provided to residents of properties with private, project-based assistance when an “eligibility event” takes place at the property. The most typical eligibility event occurs when a project-based Section 8 contract expires and the owner decides not to renew the contract, that is, the owner “opt outs.” Prepayment of certain unrestricted HUD-insured mortgages (generally Section 236 and Section 221(d)(3) projects) is another type of eligibility event.
There are two key features that make EVs enhanced:
- A household receiving an EV has the right to remain in its previously-assisted home, and the owner must accept the EV. Instead of accepting an EV, a household may move right away with a regular Housing Choice Voucher (HCV). A household accepting an EV may choose to move later, but then its EV converts to a regular HCV.
- An EV will pay the owner the difference between a tenant’s required contribution toward rent and the new market-based rent charged by the owner after the housing conversion action, even if that new rent is greater than the PHA’s basic voucher payment standard. A PHA’s regular voucher payment standard is between 90% and 110% of the Fair Market Rent (FMR). In most cases a household will continue to pay 30% of its income toward rent and utilities. However, households must continue to pay toward rent at least the same amount they were paying for rent on the date of the housing conversion action, even if it is more than 30% of their income.
The PIH letter states, “The purpose of this special payment standard is to allow the family to remain in the property after the eligibility event.”
The letter concludes, “Concerns have been raised to HUD that some families and owners may not be fully aware of the enhanced voucher “right to remain” in accordance with the Act, particularly after the initial year of assistance. When conducting the oral briefing with tenants and/or owners regarding the use of enhanced vouchers, it is important to emphasize to both parties that families have the “right to remain” pursuant to section 8(t) the Act, and that this ‘right to remain’ extends beyond the initial year of assistance.”
The National Alliance of HUD Tenants (NAHT) have been pressing for such a letter for several years, because its members have been threatened with eviction by owners who fail to recognize the statutory right to remain. NAHT awaits similar instruction from HUD’s Office of Multifamily Housing Programs.
Read the PIH letter at: http://1.usa.gov/1kbHVFs
More information about enhanced vouchers is on page 167 of NLIHC’s 2014 Advocates’ Guide: http://nlihc.org/sites/default/files/2014AG-167.pdf
from NACEDA Federal News bulletin, May 29, 2014
On May 21, the House Appropriations Committee approved its fiscal year (FY) 2015 spending bill for the Transportation, Housing, and Urban Development and Related Agencies (THUD) subcommittee. The legislation allocates $40.3 billion to HUD programs. Additionally, the House Appropriations Subcommittee on Agriculture passed its FY 2015 spending bill on May 20, with a total of $2.6 billion provided for rural development programs. The House THUD bill would:
- Cut Home Investment Partnerships Program (HOME) funding levels to $700 million, down 30% from $1 billion in FY 2014. This would be the lowest funding level for the HOME Program since it was authorized.
- Fund Community Development Block Grants (CDBG) at $3 billion, a 1% decrease from the FY
2014 enacted level of $3.03 billion.
- Fund the Choice Neighborhoods Initiative (CNI) at $25 million, 72.2% below FY 2014 enacted levels. The previous FY 2014 House bill, however, did not provide funding for CNI.
On May 22, the Senate Appropriations Committee unveiled its FY 2015 spending allocations, called the 302(b)s, for the twelve appropriations subcommittees. The Senate THUD 302(b) allocation is $54.44 billion, approximately $2.4 billion more than was allocated by the House THUD subcommittee. The FY 2015 Senate THUD spending bill will be considered in subcommittee on June 5
by Rooflines the Shelterforce Blog, on May 27, 2014
President Obama on Friday announced his new pick for HUD Secretary: San Antonio Mayor Julián Castro.
Before introducing Castro, Obama rattled off a list of Donovan’s accomplishments, saying he made HUD “smarter and more efficient” while focusing on building strong, sustainable neighborhoods for people with access to housing and good jobs. He said Donovan also reduced homelessness among veterans and was a leader in the recovery following Hurricane Sandy.
Click here to see a video of the President’s nomination speech, as well as Shaun Donovan’s moving speech. As the President joked, “It’s very rare where an announcement about an OMB confirmation gets people choked up.”
“Shaun has earned a reputation as a great manager, a fiscally responsible leader, and somebody who knows how the decisions we make here in Washington effect peoples lives all across the country,” Obama said.
As mayor, Obama called Castro a “leader in housing and economic development” for his work revitalizing San Antonio with new housing developments and by attracting investment.
NCLR president and CEO Janet Murguía called Obama’s nomination a “home run.”
“Julian Castro has become a respected and nationally acclaimed leader on urban revitalization and economic development, the issues at the heart of the Department of Housing and Urban Development’s work. We especially look forward to working with him to complete the department’s unfinished business of alleviating once and for all the housing crisis that continues to affect millions of Americans, especially in communities of color,” said Murguía.
from Enterprise’s Capitol Express e-newsletter, May 7 2014
On May 7, the House Appropriations Subcommittee on Transportation, Housing, and Urban Development (THUD) approved by voice vote its fiscal year (FY) 2015 appropriations bill. The spending legislation contains a $40.3 billion dollar budget for the Department of Housing & Urban Development (HUD), approximately $2 billion below the President’s FY 2015 Budget Request and $770 million below currently enacted FY 2014 spending levels. These lower spending levels reflect the disparity between the Office of Management & Budget (OMB) and Congressional Budget Office’s (CBO) estimates of FY 2015 Federal Housing Administration (FHA) receipts, which have served as major source of revenue for the THUD spending bills in recent fiscal years. Appropriators are required to comply with CBO’s estimates, which projected that FHA would generate $4.3 billion less in FHA receipts than OMB had anticipated.
The full House Committee on Appropriations will mark up the FY 2015 THUD bill the week of May 19, at which time amendments will be offered.
Overview of HUD Programs
Rental Assistance Programs
The House bill provides $9.75 billion for Project-Based Rental Assistance (PBRA), a 1.7% reduction from the current FY 2014 funding level of $9.92 billion. This funding level is equivalent to the amount proposed in the President’s FY 2015 budget. The spending bill does not explicitly shift to a calendar year funding cycle for renewal contracts in FY 2015, as was proposed in the President’s budget request. A transition to calendar year funding, according to the Administration, will allow for all existing contracts to be funded for a full 12 months at the proposed spending level of $9.75 billion. The House bill does not provide funding for the Rental Assistance Demonstration (RAD) program nor does it increase the number of public housing units that can be converted to Section 8 project based assistance, both of which were requested by the Administration.
Tenant-Based Rental Assistance (TBRA) is funded at $19.36 billion, a 1% increase over the FY 2014 enacted level of $19.18 billion. Slightly more than $17.69 billion is allocated to Housing Choice Voucher contract renewals, which is an approximately 2% increase over FY 2014. Initial analysis indicates that this funding level is not adequate to fully fund all existing vouchers without public housing agencies (PHAs) implementing additional cost savings measures. HUD-Veteran Affairs Supportive Housing (HUD-VASH) vouchers for homeless veterans are level funded at $75 million. Tenant Protection Vouchers are also level funded from FY 2014 at $130 million.
Public Housing Capital & Operating Funds
The House bill provides $1.775 billion for the Public Housing Capital Fund in FY 2015, 5.3% below the FY 2014 enacted level of $1.875 billion. The Public Housing Operating Fund is level funded at $4.4 billion, as is the Job-Plus Pilot Initiative at $15 million.
Homeless and Supportive Housing Programs
McKinney-Vento Homeless Assistance Grants are level funded at the FY 2014 enacted level of $2.1 billion. This amount includes a $1.8 billion set aside for the continuum of care and rural housing stability assistance programs, at least $200 million for Emergency Solutions Grants and $5 million for a National Homeless Data Analysis Project. The House bill increases funding for the Housing for the Elderly (Section 202) program to $420 million in FY 2015 from $383.5 million in FY 2014, representing a 9.5% increase. Of this amount, the Administration proposes up to $70 million to fund service coordinators and the continuation of existing congregate service grants for residents of senior assisted housing. The Housing for Persons with Disabilities (Section 811) program would be funded at $135 million, a 7.1% increase over the FY 2014 enacted level of $126 million. The Housing Opportunities for Persons with AIDS (HOPWA) program is funded at $303 million, an 8.2% decrease from $330 million in FY 2014.
Community Planning and Development Programs
The House bill funds Community Development Block Grants (CDBG) at $3 billion, a 1% decrease from the FY 2014 enacted level of $3.03 billion. $60 million of this amount is designated for grants to Indian tribes and up to $3.96 million is available for health and safety emergency measures.
The House bill cuts HOME Investment Partnerships Program (HOME) funding levels to $700 million, down 30% from $1 billion in FY 2014. This would be the lowest funding level for the HOME Program since it was authorized. The House adopted the Administration’s proposal to set aside the Self-help Homeownership Opportunity Program (SHOP) within the HOME Program account and provide up to $10 million for SHOP in FY 2015.
The House bill level funds the Section 4 Capacity Building for Community Development and Affordable Housing Grants program at $35 million, of which at least $5 million is set aside for rural capacity building activities.
Placed Based Initiatives
The Choice Neighborhoods Initiative (CNI) is funded at $25 million, 72.2% below FY 2014 enacted levels. The previous FY 2014 House bill, however, did not provide funding for CNI. No additional funding is provided for the Integrated Planning & Investment Grants program, which has not been funded since FY 2012.
Housing Counseling and Other Key Programs
Housing Counseling Assistance is level funded at $45 million, including $4.5 million for administrative contract services. The House bill provides $50 million for the National Foreclosure Mitigation Counseling program administered by NeighborWorks America, a 25% decrease from the FY 2014 enacted level of $67.5 million. The Native American Housing Block Grants program is level funded at $650 million, but no funding is allocated to Native Hawaiian Housing Block Grants program, which is currently funded at $10 million in FY 2014. The budget also zeroes out funding for the Transformation Initiative (TI), currently funded at $40 million in FY 2014.
See Enterprise’s budget chart for an overview of housing and community development program funding levels in the House FY 2015 THUD spending bill.
By Miriam Axel-Lute, Shelterforce, May 6 2014
What is the affordable housing world making of the Johnson-Crapo housing finance reform? So far here on Rooflines, Dan Immergluck gave us a good overview of its provisions and cautioned community developers not to ignore it, and economist Dean Baker told us it’s an impressively bad worst of both worlds. The bill was scheduled to be marked up by the Senate Banking Committee on April 29, but was delayed, perhaps for lack of votes to move it out of committee. Meanwhile, what are the various advocacy organizations saying about it? More
from Enterprise eConnect Enewsletter, 3/19/2014
JOHNSON-CRAPO HOUSING FINANCE REFORM BILL
Sens. Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho) released the discussion draft of the Housing Finance Reform and Taxpayer Protection Act of 2014 recently.
Terri Ludwig’s Statement: How the Bill Would Provide Essential Reforms While Preserving Vital Components
Blog: Four Takeaways from the Bill, by Andrew Jakabovics, Senior Director, and John Griffith, Senior Analyst
[Btw, here is a counterpoint from the Rooflines Shelterforce Blog]:
THE CRAPO-JOHNSON HOUSING FINANCE BILL IS A DISASTER
By Dean Baker, Rooflines Shelterforce Blog, 4/1/2014
Less than a decade after we saw a meltdown in the mortgage market that almost sank our financial system, Congress seems intent on creating a system of mortgage finance where the problem of moral hazard will be even more serious than in the pre-crisis system. Under the system being proposed in the Crapo-Johnson bill, which enjoys wide bi-partisan support, private issuers will be able to market mortgage backed securities (MBS) advertising a 90 percent government guarantee. Proponents of this system apparently believe… More