Weekly update from the National Housing Conference

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In this issue

November 5, 2023

Issue 92-39

· NHC hosts Vice Chair Barr for conversation on CRA

· Enterprises meet 2022 housing goals, fall short on Duty to Serve

· FOMC maintains current federal funds rate

· CFPB issues report on state CRA laws

· FHA consolidates HECM guidance

· FHA aligns manufactured home appraisal requirements

· HUD Proposes Rule to Lift Fair Housing Tester Conviction Limits

Chart of the week: Worst-case housing needs hits new record in 2021

Housing opportunities for all veterans

By David M. Dworkin, President and CEO

My father Edward Dworkin spent his teenage years working in the junkyard his father ran on a rented lot in Detroit during the Great Depression. His father spoke two languages fluently, as well as the broken English I struggled to understand. When he turned 18, my father enlisted in the Marines and traveled 8,000 miles from his home in Detroit to serve his country.

The sacrifice of that Greatest Generation is legendary, captured in countless movies and books. Sixteen million Americans served in World War II – a quarter of the U.S. population. More than 405,000 never made it home. Those who survived the Second World War were rewarded for their service with the G.I. Bill of Rights, which offered the opportunity of a college education and subsidized homeownership. As a result, my father was the first person in his family to go to college and own his own home. He wasn’t alone. The U.S. homeownership rate increased from 41.2% to 66.4% between 1940 and 1960, creating wealth for millions for the first time.

However, not everyone benefited. Over a million people of color, most of them Black, also served in World War II. Nearly all of them were excluded from receiving benefits under the G.I. Bill because the same federal government that created the G.I. Bill of Rights also excluded people of color from receiving mortgages with VA and FHA loans. Between 1940 and 1960, the gap between Black and White homeownership increased by over five points from 21.9 to 27.3. Today, that gap is more than 30 points.

It’s easy to think of this injustice as ancient history. With the passage of the Civil Rights Act of 1965 and the Fair Housing Act of 1968, discrimination in housing and education has been illegal. So why has the gap increased rather than shrunk? There are a lot of reasons, but one of the most impactful is the tremendous influence of multigenerational wealth, created by multigenerational homeownership and attendance at college – without student loan debt – that grew out of the G.I. Bill of Rights.

Multigenerational homeownership creates three significant advantages that can make the difference between building multigenerational wealth or remaining in the lowest rung of the middle class. More...

News from Washington | By Brittany Webb

NHC hosts Vice Chair Barr for conversation on CRA

NHC hosted a forum with Michael Barr, Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, to discuss the new Community Reinvestment Act (CRA) and how it brings CRA into the 21st century. The forum began with a conversation between NHC President and CEO David Dworkin and Vice Chair Barr that spanned topics from changes to how housing credit programs are evaluated under CRA and mortgage-backed security churning to the future of branch banking.


“CRA officers need to know that this deal is going to count,” Barr explained, noting the set of illustrative activities spelled out in the new rule. “It’s also important for communities. If you’re a community member, to be able to come to a bank and say I’ve got a deal that’s a qualifying CRA deal, I need your help. That kind of clarity is really important.”


After the discussion, a panel of housing and banking industry representatives reacted to the discussion and the new CRA rule. Panelists were Lindsey Johnson, President and CEO, Consumer Bankers Association; Michael J. Novogradac, CPA, Managing Partner, Novogradac; and Lisa Rice, President and CEO, National Fair Housing Alliance. The group discussed the implications of new data analysis, use of AI in housing, racial equity, and how to best leverage the new rule to drive investments in underserved areas.

Enterprises meet 2022 housing goals, fall short on Duty to Serve

The Federal Housing Finance Agency (FHFA) released its 2023 Annual Housing Report, which determined that Fannie Mae and Freddie Mac (the Enterprises) met their 2022 housing goals. The report analyzes the Enterprises’ affordable housing and mission-driven activities. It provides an overview of the Enterprises’ affordable housing goals, changes to credit score and valuation models and approvals, updates to the single-family pricing framework, and the Equitable Housing Finance Plans. The report noted that since the Equitable Housing Finance Plans took effect, more than 834,000 families have been assisted through associated programs. 


FHFA also reported that neither Enterprise received high ratings on all their Duty to Serve requirements, which require the Enterprises to serve very low-, low-, and moderate-income families in three underserved areas: manufactured housing, affordable housing preservation, and rural housing. The agency determined Fannie Mae to be below target for its goals for manufactured homes titled as real property and communities not privately owned, as well as Section 515 and Rental Assistance Demonstration goals. Freddie Mac was below target for resident-owned communities in manufactured housing, USDA 515 transactions in affordable housing preservation markets, seasoned small balance loans from small financial institutions, and Section 515 properties under rural housing.

Early bird registration closes Nov. 8

On Dec. 7, the National Housing Conference will host its Solutions for Affordable Housing convening at the National Press Club in Washington, D.C. National Economic Council Director Lael Brainard will join attendees to discuss the work the Biden Administration is doing to increase affordable housing for all Americans including the Administration’s Housing Supply Action Plan and work on racial equity. FHFA Director Sandra Thompson will participate in a fireside chat to discuss FHFA’s initiatives to expand homeownership and rental opportunities for all Americans through its oversight of the Federal Home Loan Banks, Fannie Mae, and Freddie Mac. Early bird registration closes on November 8 - don't miss out on these savings!

Solutions for Affordable Housing serves as a platform for fostering connections among a diverse range of affordable housing stakeholders, encompassing officials from municipal bodies, charitable foundations, non-profit organizations, real estate developers, lenders, and beyond. Our focus is on housing priorities that are tangible, impactful, and achievable.

This year’s sessions include discussions on timely topics such as the influence of climate on housing insurance, housing concerns within the AAPI community, special purpose credit programs, mortgage servicing tactics to support families in keeping their homes, and what to expect with the 2024 policy agenda, among other pertinent subjects.


FOMC maintains current federal funds rate

The Federal Reserve Board of Governors’ Federal Open Market Committee (FOMC) agreed to hold the current target federal funds rate steady at 5.25-5.50% after they met last week, the second consecutive pause this year following 11 prior rate hikes.


“After picking up somewhat over the summer, activity in the housing sector has flattened out and remains well below levels of a year ago, largely reflecting higher mortgage rates. Higher interest rates also appear to be weighing on business fixed investment. The labor market remains tight, but supply and demand conditions continue to come into better balance,” said Federal Reserve Chairman Jerome Powell during a press conference. He later referenced mortgage interest rates nearing 8% and the significant effect the rates have on the housing market. 

CFPB issues report on state CRA laws

A new report from the Consumer Financial Protection Bureau (CFPB) summarizes the existing state-level Community Reinvestment Act (CRA) laws. The report comes just a week after federal regulators issued new CRA regulation, the first comprehensive interagency update since 1995. The states with existing laws are Conn., Ill., Mass., N.Y., R.I., Wash., W.V., and D.C. The report found that some states apply an affirmative lending and investment obligation to mortgage companies and deposit-taking institutions, not only banks. Further, some states conduct independent performance examinations while others review federal evaluations in conjunction with state reporting. State-level enforcement mechanisms include limitations on mergers, acquisitions, and branching and licensing, similar to the federal law.


“The financial market has changed considerably since the passage of the Community Reinvestment Act, and nonbanks are now capturing a large share of the mortgage market,” said CFPB Director Rohit Chopra. “States have responded by creating reinvestment obligations for mortgage companies and have tailored state reinvestment requirements to meet the needs of their local communities.”

FHA consolidates HECM guidance

The Federal Housing Administration (FHA) announced it consolidated, for the first time, Home Equity Conversion Mortgage (HECM) program guidelines into one resource. The Single-Family Housing Policy Handbook 4000.1 is a single, centralized resource for all HECM program requirements. The move makes it easier for lenders and servicers to understand and implement the program.

“Home Equity Conversion Mortgages (HECM) are one of the strongest tools we have to ensure thousands of seniors can age in place. This new guidance will give people one single place to easily access the information needed to obtain and maintain a HECM,” said HUD Secretary Marcia Fudge.

These new sections encompass FHA policies from origination through post-closing and endorsement of HECMs (Section II.B) and policies related to servicing HECMs and options for assisting borrowers facing mortgage payment challenges (Section III.B). “This body of work follows extensive engagement and feedback from HECM lenders, servicers, consumer advocates, and other housing industry participants over the last two years—engagement that was instrumental in helping us move this initiative to completion,” said HUD Deputy Assistant Secretary for Single-Family Housing Sarah Edelman. 

FHA aligns manufactured home appraisal requirements

FHA announced updates to its appraisal requirements for manufactured homes certified under Fannie Mae’s MH Advantage™ and Freddie Mac’s CHOICEHome® programs, aligning the requirements with industry standards. The revisions will improve the valuation process for borrowers seeking FHA-insured mortgages for these homes, in line with the Biden-Harris Administration’s Housing Supply Action Plan, which aims to increase the availability and affordability of manufactured housing.

“The critical step we’re taking today ensures HUD is in alignment with our industry partners, and it will make more quality affordable housing available to people across the country,” said HUD Secretary Marcia Fudge. Effective immediately, the updated policy requires appraisers to use the most appropriate site-built-home comparable sales when fewer than two comparable sales of certified manufactured homes are available. These changes are part of FHA’s broader effort to enhance financing flexibility and contribute to a more diverse housing market.

“Updating FHA appraisal requirements to align with the Fannie Mae and Freddie Mac certification programs supports our comprehensive efforts to increase both the supply and affordability of manufactured homes,” said Federal Housing Commissioner Julia Gordon.

HUD Proposes Rule to Lift Fair Housing Tester Conviction Limits

The U.S. Department of Housing and Urban Development (HUD) introduced a new rule, outlined in a Notice of Proposed Rulemaking, to remove restrictions on fair housing testers. The proposed changes would eliminate restrictions for individuals with prior felony convictions or other criminal records participating in the Fair Housing Initiatives Program (FHIP) and Fair Housing Assistance Programs (FHAP).

“We trust fair housing testers to identify bias and discrimination in housing so we can fulfill our mission to root it out. Through this new rule, we can ensure people with criminal records who want to participate in this important work aren’t facing unnecessary barriers,” said HUD Secretary Marcia Fudge. The proposed rule strives to make HUD’s programs more inclusive and empower FHIP and FHAP-funded entities to investigate potentially discriminatory screening policies. HUD is seeking public comment with a Dec. 29 submission deadline through Regulations.gov.

Chart of the week

Worst-case housing needs hits new record in 2021

HUD’s Office of Policy and Development Research released its 2023 Worst Case Housing Needs 2023 Report to Congress, showing that worst-case housing needs reached a record high of 8.53 million renter households in 2021. The report measures the extent of unmet needs for rental housing through two factors: households living in inadequate physical conditions and those paying more than half of their income on rent. The previous record high had been reached in 2011 at 8.48 million renters. 

What we're reading

HousingWire wrote an article on an event co-hosted by NHC and AARP last week, Building Livable Communities for All Generations, that brought together housers, planners, advocates, and other stakeholders to discuss how communities can be thoughtfully designed. The event featured opening remarks from HUD Deputy Secretary Adrianne Todman, who explained, “Building livable communities is about making space for people to thrive.”

A paper from the Joint Center for Housing Studies of Harvard University examines the impact of housing policies on the health of pregnant people and infants. It finds that desegregation-focused housing policies that aim to reduce neighborhood disparities may also reduce disparities in health outcomes. The paper won the Center’s 2023 Best Paper on Housing Prize.

The New York Times published a perspective article on the difficulties of finding and maintaining accessible housing in New York City. The author, who is a wheelchair user, reports that they have personally spent over $18,500 to make the places they live accessible for them, despite landlords being legally required to provide such accommodations. It stresses the need to understand Fair Housing laws and the rights of individuals that are too often ignored. 

The week ahead

Monday, November 6

School of Mortgage Banking II (Mortgage Bankers Association), 11 AM – 1:30 PM ET

Mobilizing the Community Development and Design Field to Advance Equity (NextCity), 2 – 3 PM ET

National Call on HoUSed: Universal, Stable, Affordable Housing (NLIHC), 2:30 PM ET

Tenant Talk Live (NLIHC), 6 PM ET


Tuesday, November 7

Lending Conference (NAFCU), in person in New Orleans, La.

NHCMA Annual Meeting (NHCMA), in person in Birmingham, Ala.

School of Mortgage Banking II (Mortgage Bankers Association), 11 AM – 1:30 PM ET

Get to Know MISMO – The Key to Accelerating the Industry’s Digital Future (Mortgage Bankers Association), 12 – 1 PM ET

Aging Without Housing: Addressing the Rising Tide of Senior Homelessness (Bipartisan Policy Center), 1 – 2 PM ET

The Definitive Guide for New Executive Directors (NAHRO), 1 – 4 PM ET

The Future of Cities, Design and Community Education (NextCity), 1 – 2 PM ET

MAA Quarterly Webinar: Townhall Legislative Update (Mortgage Bankers Association), 2 – 3 PM ET


Wednesday, November 8

Black Summit (NAREB), in person in Birmingham, Ala.

Commercial/Multifamily Technology Officer Roundtable 2023 (Mortgage Bankers Association), in person in Washington, DC

Lending Conference (NAFCU), in person in New Orleans, La.

NHCMA Annual Meeting (NHCMA), in person in Birmingham, Ala.

Office of Housing Counseling 2023 Regional Meeting – Atlanta, Ga. (HUD Exchange), 8:45 – 4:30 PM ET

New Ways Forward: 2023 Annual Policy & Practice Conference (NAAHL), 8 AM – 5 PM ET

School of Mortgage Banking II (Mortgage Bankers Association), 11 AM – 1:30 PM ET

Accelerating City Equity Project ‘Starter Kit’ for Practitioners (NextCity), 12 – 1 PM ET

The Definitive Guide for New Executive Directors (NAHRO), 1 – 4 PM ET

Reviewing Audits of Lower-Tier LIHTC Partnerships Webinar (Novogradac), 1 – 3 PM ET

DHRC’s Disaster Recovery Working Group (NLIHC), 2 PM ET

The Future of Journalism and Community Storytelling (NextCity), 2 – 3 PM ET

Navigating Compliance with the Endangered Species Act for HUD-Assisted Projects in Alaska (HUD Exchange), 2 – 4 PM ET

Manufactured Housing Webinar Series: Overview of the Updated CPD Notice on CDBG Housing Activities (8 November 2023), 3 – 4 PM ET

Our Places of Impact: An Overview of Funding Opportunities for Community-Led Initiatives (HUD Exchange), 3 – 4 PM ET

Equal Opportunity Dinner (National Urban League), 6 PM ET, in person in New York City, N.Y.


Thursday, November 9

Black Summit (NAREB), in person in Birmingham, Ala.

Commercial/Multifamily Technology Officer Roundtable 2023 (Mortgage Bankers Association), in person in Washington, DC

Lending Conference (NAFCU), in person in New Orleans, La.

Office of Housing Counseling 2023 Regional Meeting – Atlanta, GA (HUD Exchange), 9:30 AM – 12:30 PM ET

School of Mortgage Banking II (Mortgage Bankers Association), 11 AM – 1:30 PM ET

Faith-Based Community Development: The Evolution of a Movement (Enterprise Community Partners), 12 – 4 PM ET

HUD’s Build America, Buy America Virtual Outreach Event for Grantees (HUD Exchange), 12 – 2 PM ET

Using the Municipal Bond Racial and Social Equity Scorecard to Advance Equity in the Bond Market (Urban Institute), 1 – 2 PM ET

CREF Career Conversations (Mortgage Bankers Association), 2 – 3 PM ET

When Federal Reparations Have Yet To Be Realized, Local Institutions Step Up (NextCity), 2 – 3:30 PM ET

NMHC Emerging Leaders Virtual Event (NMHC), 3 – 4 PM ET


Friday, November 10

Black Summit (NAREB), in person in Birmingham, Ala.

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