Federal News

My Central Oregon: How Buying Your First Home Just Got More Affordable

Wednesday, January 21st, 2015

The president continued his State of the Union preview tour Thursday in the American southwest, this time focusing on the housing market with a mortgage announcement the administration hopes will add a needed boost to new home sales.

“Buying a home has always been about more than buying a roof and four walls,” President Obama told a packed gymnasium at Phoenix Central High School.

It’s about “that sense of accomplishment that you were building something, for your family and your future.”

Obama has directed his Federal Housing Authority to reduce the fees attached to government loans for home buyers by half a percent, from 1.35 to 0.85 percent. It may seem like a paltry figure, but the White House estimates the lowered premium will put $900 back into the pockets of the average borrower, annually.

The administration says it will also push 250,000 homes into the hands of those who may not be able to afford it otherwise.

In all, Obama expects the move will affect 800,000 homeowners across the United States. The FHA is a popular lender for new buyers and those annual fees are tacked on to each month’s mortgage bill. But they have jumped significantly in the past five years, being a low 0.55 percent in 2010.

The president continues to strongly support long-term housing finance overhaul through legislation that requires private capital to take the risks and rewards in mortgage lending while preserving broad and affordable access for all creditworthy families.

The president also said his administration would continue to cut “red tape” between lenders and borrowers, and promised to preserve “sound underwriting standards” to assure homeowners receive loans they can fully pay. And he touted the Consumer Financial Protection Bureau’s elimination of the “worst practices of the past.”

“Right now, Michelle and I live in rental housing. We don’t own where we live; we’ve got two years remaining on our lease. I’m hoping I get my security deposit back,” Obama quipped. “Although Bo and Sunny have been tearing things up occasionally.”

Before arriving at the high school, the president and Housing and Urban Development Secretary Joaquim Castro visited a single-family housing complex owned by a local nonprofit, Chicanos Por La Causa. The subdivision has received nearly $2 million since 2010 in federal grants related to the Recovery Act.

Prior to the group’s involvement, the neighborhood held 25 vacant and overgrown lots, according to a White House statement. The lot aims to sell homes to families that make $40,000 to $60,000 a year.

The Phoenix suburbs were emblematic of the 2008 housing bubble. For example, the nearby city of Maricopa, with its tiny population of 1,000 at the turn of the millennium, saw a boom to over 33,000 residents by the burst.

Then, suddenly, one in 10 homes was empty again. Dwellings that hadn’t yet lost their “new home smell” were void of life. Since the recovery, the city’s population growth has leveled out, sitting at 45,000 today.

Obama came to this city as the second leg of a three-part tour outlining his upcoming State of the Union address. In Detroit Wednesday, he touted the recovery of the auto industry; Friday he will conclude in Knoxville, Tennessee, to speak on job skills and education.

The decision to give these State of the Union spoilers is an unusual one. Typically, presidents keep the major points of the address under wraps until the night of the annual speech, then tour to promote them afterwards.

Omnibus Spending Bill Signed Into Law; FY 2015 HUD Program Funding Determined

Thursday, January 8th, 2015
On December 16, President Obama signed a $1.1 trillion spending bill to fund the federal government through September 2015. The law provides $45.4 billion for HUD programs. This is $90 million less than the amount allocated to HUD in 2014.
The final FY2015 law avoids the deep cuts to the Housing Choice Voucher administrative fees, public housing capital funding and the HOME Program that were in the House bill. However, the HOME Program was reduced from $1 billion in FY2014 to $900 million in FY 2015, its lowest funding level in the program’s history. CDBG is funded at $3 billion, slightly below the 3.03 billion enacted in FY 2014. The Section 4 Capacity Building for Affordable Housing and Community Development Grants program is level funded at $35 million. The Choice Neighborhoods Initiative is funded at $80 million, a $10 million decrease below its FY 2014 funding level. Go to Enterprise’s summary and budget chart for a detailed overview of housing and community development funding levels.

President Obama Speaks to HUD

Sunday, August 3rd, 2014

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.


National Housing Trust Fund (NHTF) State of Play

Thursday, July 3rd, 2014

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.


HUD to Release NOFAs for $820M for Disaster Resiliency

Thursday, July 3rd, 2014

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

Notices Implement $5 Million Tenant Protection Voucher Set-Aside

Wednesday, June 4th, 2014

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:

  1. 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.
  2. 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.
  3. 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

Letter Reminds PHAs About Enhanced Voucher “Right to Remain” Provision

Wednesday, June 4th, 2014

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:

  1. 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.
  2. 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

House and Senate Advance FY 2015 Spending Bills

Thursday, May 29th, 2014

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.

Read the Enterprise budget chart and summary of House allocations for housing and community development.

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

President Obama Names Julian Castro to Lead HUD; Sean Donovan to Head OMB

Thursday, May 29th, 2014

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.

Current HUD Sec. Shaun Donovan has been chosen to lead the Office of Management and Budget.

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.

THUD Approves FY 2015 Appropriations Bill

Wednesday, May 7th, 2014

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.