October 9, 2017

In Case You Missed It: A Look at Recent National Housing Policy News

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MBA Preliminary Analysis of 2016 HMDA Data

The 2016 Home Mortgage Disclosure Act data were released, along with a separate Federal Reserve analysis of the data. Here are some initial highlights:

In the newly released HMDA data for mortgage activity during calendar year 2016, there were 6,762 reporting institutions, a 2 percent decrease from 6,913 institutions in 2015. This was significantly lower than the peak of 8,886 institutions in the industry during 2006 and relative to that year, the number of HMDA reporters was down by 24 percent.  Both home purchase and refinance originations increased in 2016. Purchase originations saw a 14 percent increase, to $1 trillion in 2016 from $876 billion in 2015. Refinance volume increased 24 percent to $949 billion in 2016 from $768 billion in 2015, as 30 year fixed rates stayed below the 4 percent mark for most of 2016 (9 out of 12 months), averaging 17 basis points lower than in 2015.

Five Things that Might Surprise you About the Fastest-Growing Segment of the Housing Market

  1. Single-family rental is the fastest-growing segment of the housing market.
  2. Changing demographics and housing market conditions will continue to fuel the rental growth.
  3. Institutional investors are tiny players in the single-family rental market.
  4. The geographic focus of institutional investing in SFRs has shifted.
  5. Future growth of institutional investors in SFRs is still up in the air.

Managing Mortgage Product Development Risk

The Mortgage Bankers Association's Research Institute for Housing America has released a new special report, Managing Mortgage Product Development Risk.

"Mortgage banking is a highly cyclical business, prone to expansion and contraction as market conditions change," Rossi said. "Mortgage product innovation is healthy for the industry and consumer so long as product risks and process quality are well understood." The paper noted intrinsic risks associated with mortgage products and processes amplified aggregate losses of mortgage originators, investors and servicers following the mortgage boom of 2004-2007. In many instances, product development acceded to market pressures as the economy expanded and regulatory oversight waned.

Freddie Mac’s Chief Diversity Officer on Diversity and Inclusion

In an effort to better represent underserved communities, as well as support ongoing diversity initiatives in the mortgage industry, Freddie Mac has announced the opening of a Borrower Help Center in McComb, Mississippi, according to a recent post by Dwight Robinson, SVP of Human Resources, Diversity and Inclusion, and Chief Diversity Officer at Freddie Mac. Robinson notes that this initiative isn’t new—it is the 14th center of its kind throughout the country; however, what makes this location unique is its locale. It is the first located in the lower Mississippi delta, serving a rural community with a median household income of $29,720. African-Americans also makeup 66 percent of the total population, and have a homeownership rate much lower than that of the regional average—50.0 percent—compared to 70.9 percent.

Distribution of Housing Types, Race and Ethnicity (Urban Areas and U.S.)

The diversity of urban housing markets can also be seen in their racial and ethnic make-up. Among the population of urban housing markets, 33 percent is Hispanic (compared to 17 percent of the nation as a whole), 17 percent is Black (compared to 12 percent of the nation as a whole), 10 percent is Asian (compared to 5 percent) and 3 percent is from other non-Hispanic, non-White racial and ethnic groups (compared to 3 percent). Only 38 percent of the population in urban housing markets identifies as non-Hispanic White.

October 5, 2017

Recent Groundbreakings

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Old Forest Village, Lynchburg 

Photo courtesy of Andrew Wilds Photography.
This development will provide affordable, accessible housing for people living with disabilities. VHDA provided Housing Credits.

Pictured left to right: Corbin Anderson (Virginia Community Capital); Art Bowen (Managing Director of Rental Housing at VHDA); Neal Sumerlin (Chair, Rush Homes Board of Directors); Treney Tweedy (Vice Mayor of Lynchburg); Willie Fobbs (DHCD); Delegate Scott Garrett, M.D.; Sandra Stanaitis (Rush Homes tenant, seated).

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Community Lodgings, Alexandria 

This apartment building and learning center constructed in 1940 is getting a much-needed renovation. When complete, it will have seven units, including two reserved for homeless families. Community Lodgings also provides youth education, budget mentoring, employment counseling, family therapy and more. Since 1987, their mission has been to lift families out of homelessness and instability and provide a path to independence and self-sufficiency. VHDA provided a $700,000 loan, the City of Alexandria is granting $300,000 toward the project, and BB&T will be the construction lender.

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Representatives from VHDA, City of Alexandria, Richmond American Homes, Brookfield Residential, HomeAid Northern Virginia, MITRE Corporation and Community Lodgings were among those celebrating the groundbreaking.

Gilliam Place, Arlington 

The vision for Gilliam Place began when Arlington Presbyterian Church decided to put their faith into action and their property into mission service, by dedicating their site for affordable housing. When complete, this will be an attractive and economically viable housing option for low- and moderate-income families. VHDA has committed more than $8.9 million in VHDA tax-exempt bond financing to Arlington Partnership for Affordable Housing (APAH) for Gilliam Place East & West, plus another $4.3 million in taxable bond financing and $8.7 million in REACH loan funds. (REACH, also called REACH Virginia, is VHDA's internally generated resource that provides vital funding for affordable housing. Each year, VHDA contributes a substantial portion of its net revenues into this program.)

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On hand for the groundbreaking were representatives from Arlington Presbyterian Church, VHDA, Enterprise Community Partners, APAH, Arlington County, Capital One and the National Capital Presbytery.

Cypress Landing, Chesapeake 

Cypress Landing will provide quality, affordable housing for 50 disabled, low-income and homeless veterans. VHDA provided a $2.6 million loan as well as Housing Credits.

Congratulations to Second Act Communities and all of our partners, including the Department of Housing and Community Development (Virginia Housing Trust Fund), Federal Home Loan Bank of Atlanta, City of Chesapeake, Home Depot Foundation, Hampton Roads Community Foundation and Chesapeake Redevelopment and Housing Authority.

October 3, 2017

From Homeless Shelter to Home: VHDA's Renter Ed Helps Pave the Way

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After 35 years in the business of helping others, Deb Rapone will tell you she was skeptical that an online program could have any real value in helping people move out of a homeless shelter. But Rapone, who directs the SERVE Family Shelter in Northern Virginia, has become a fan of VHDA's online Renter Education program. The program features a nine-chapter eBook, "How to be a Successful Renter," and Rapone is using it to help shelter guests prepare for the eventual transition to renting a home and independent living.

Shelter guests face many challenges when looking for rentals, according to Rapone. The biggest challenge is actually locating affordable rooms, apartments or houses to rent. But shelter guests face other barriers as well, including limited income, previous evictions or judgments, debt, poor credit scores and in some cases, past convictions.

"Some have failed so many times relative to renting that they think they will never find a place and cannot succeed as a renter," Rapone said. But the VHDA program is bringing back hope.

"We use the program's Certificate of Completion as a tool with landlords, and it has helped us many times," said Rapone. "When we have a landlord who is on the fence with accepting a certain guest due to any of their past challenges, we use the certificate as a demonstration of the guest's commitment to bettering their situation and educating themselves about their responsibilities as a tenant."

According to LaDonna Cruse, VHDA's Housing Education Manager, the effort to improve shelter-to-rental conversions began in 2013, when eight statewide roundtable discussions were held to assess the needs of more than 700 industry professionals. The resulting Renter Education program covers renters' rights and responsibilities, common misunderstandings, challenges, barriers, landlord/tenant issues, and Fair Housing concerns. The eBook is sprinkled with tips, alerts, examples and resources, and focuses on three core principles: pay your rent on time, maintain the property, and adhere to all lease provisions. The eBook is available as a free download at vhda.com/RenterEd, and can be used by property managers, housing counselors, educators and others to enhance their own housing programs, as Rapone is doing at the shelter.

The SERVE Family Shelter is part of Northern Virginia Family Service (NVFS), which also receives housing counseling and homeless assistance grants from VHDA. With 92 beds, it's the area's largest family homeless shelter, and more than 40 percent of the residents are children. The shelter offers its guests a short-term place to stay, as they work toward independent living.

"Everything we do here for each guest who comes through our doors is intended to address and assist in resolving whatever is preventing them from getting into stable housing," said Rapone. "Not only has [VHDA's Renter Education program] become a very important educational tool for us, but it also helps keep the guests focused on why they are here: HOUSING!"

Since its publication in 2015, VHDA's free Renter Education eBook has been downloaded more than 2,600 times.

October 2, 2017

In Case You Missed It: A Look at Recent National Housing Policy News

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Joint Administration-Congress Tax Reform Framework Preserves Housing Credit 

The Administration and Republican leaders in both the House and Senate together released their Unified Framework for Fixing Our Broken Tax Code, a broad tax reform outline intended to serve as a template for the tax-writing committees to develop tax reform legislation. We are excited to report that the Administration and congressional leaders propose to retain the Low Income Housing Tax Credit, saying that "the framework explicitly preserves business credits in two areas where tax incentives have proven to be effective in promoting policy goals important in the American economy: research and development (R&D) and low-income housing."
The Framework does not speak to municipal bonds; however, NCSHA has learned from both congressional and industry sources that, when asked explicitly about the authors' intentions regarding municipal bonds, a White House spokesperson speaking at a press briefing yesterday said that the authors of the Framework intend to protect them. NCSHA is working to clarify whether private activity bonds, which are type of municipal bonds, would be preserved.

IRS Proposes Changes to PAB Public Notice Requirements; Special Standards for MRBs 

The Internal Revenue Service (IRS) published in the Federal Register a proposed rule that would simplify the public approval requirements that apply to tax-exempt Housing Bonds and other private activity bonds (PABs). The proposal also includes an NCSHA-supported special exemption from certain public approval requirements for single-family mortgage revenue bonds (MRBs). Under current IRS regulations, issuers of Housing Bonds and other PABs are required to hold a public hearing on a potential PAB issuance before the issuance can be approved. The issuer is required to notify the community impacted by the PAB issuance of the public meeting via either newspaper, television, or radio at least 14 days before the public meeting is to take place. The proposed rule would amend this requirement to allow HFAs and other issuers to meet the public notice requirement through electronic sources, as long as such methods comply with a state's open meeting requirements.

FHFA Proposed Strategic Plan for 2018-2022 Would Direct GSEs to Work with HFAs 

The Federal Housing Finance Agency (FHFA) released its proposed Strategic Plan for Fiscal Years 2018-2022. The plan outlines FHFA's goals and priorities for overseeing Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBs). The proposal identifies three major performance goals: ensuring safe and sound regulated entities; ensuring a liquid, stable, and accessible housing finance market; and managing the enterprises' ongoing conservatorship.

NLIHC and PAHRC Launch Updated National Housing Preservation Database

NLIHC and the Public and Affordable Housing Research Corporation (PAHRC) released a major update to the National Housing Preservation Database (NHPD). The update includes new data and a new user interface, as well as profiles of the federally funded affordable housing preservation needs for all 50 states and the District of Columbia. There are almost 5 million federally assisted rental homes nationally. Nearly 500,000 of these rental homes will reach the end of their current subsidy contracts and affordability restrictions for low income families in the next five years. About one in four of these homes are funded by Low Income Housing Tax Credits (LIHTCs), and three-fifths are funded by HUD Project Based Rental Assistance (Section 8) contracts.

Report Finds Direct Link between Housing and School Segregation in Richmond Region  

As the Richmond region continues to get more diverse, schools and housing continue to be segregated, a new report has found. “As part of our legacy of discrimination, students and their families from minority segregated communities face higher levels of poverty, higher unemployment rates, lower levels of educational attainment and worse health measures,” the authors of the report wrote. “Compounded, these differences have lasting influences on students’ educational attainment and future success.” The report, which was completed this summer after about three years of work, is being presented to local officials by the authors: Genevieve Siegel-Hawley, an education professor at Virginia Commonwealth University; Brian Koziol, the director of research and consulting services at Housing Opportunities Made Equal (HOME) of Virginia; John Moeser, a fellow at the University of Richmond; Taylor Holden, a technician in the Spatial Analysis Lab at the University of Richmond; and Tom Shields, the chair of graduate education at the University of Richmond.

New Poll Shows Virginians Strongly Favor Policies that Make Housing More Affordable

A majority of Virginians want to expand state funding for affordable housing and require utility companies to support efficiency upgrades that help families save on energy bills. The Campaign for Housing and Civic Engagement (CHACE), a statewide network of housing advocates spearheaded by the Virginia Housing Alliance and the Virginia Poverty Law Center working to elevate housing issues for the 2017 elections, revealed the results of a statewide public opinion survey on housing and energy efficiency issues conducted by the Judy Ford Wason Center for Public Policy at Christopher Newport University. The poll’s findings demonstrate that, by a wide margin, Virginians want a full spectrum of housing opportunities for all their neighbors. 82% of voters strongly believe that people who work in their community should be able to find a home there. 56% of voters agree that housing affordability is vital to their community’s economic success. 58% of voters also believe that ending homelessness is an important government priority.

Lessons from Past Storms Should Guide Mortgage Industry in Post-Storm Recovery

Homeowners in Texas, Florida and Puerto Rico have returned to their homes and have begun to assess the damage caused by hurricanes Harvey, Irma and Maria. As mortgage servicers begin to address the concerns of these homeowners, they should pay heed to lessons learned from Superstorm Sandy, which damaged or destroyed more than 650,000 homes in New York, New Jersey and Connecticut five years ago. The total estimated $71.4 billion cost of Sandy included not only repairs to homes but also significant repairs to public infrastructure and projects designed to prevent future storm damage. Moody’s Analytics estimates that Hurricanes Harvey and Irma caused between $75 and $95 billion in residential property damage alone and there are an estimated 4.3 million mortgage-encumbered homes in the Harvey and Irma-related FEMA disaster area counties. The impact of the 2017 hurricane season is thus likely to rival, if not dwarf, that of Sandy. Lenders and servicers can prepare by considering the immediate, short term and longer term impact of prior hurricanes, such as Superstorm Sandy, on their business.

September 28, 2017

Getting the Word Out to First-time Homebuyers

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As part of our public outreach, VHDA's Business Development and Training Manager Dan Kern made a number of media appearances to talk about VHDA and how our programs, including our unique Loan Combo, can help make homeownership a reality.

September 26, 2017

VHDA Grant Programs and Initiatives

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VHDA's Annual Grantee Training Event
VHDA's Grant Programs & Initiatives support Virginia's Affordable Housing Network. The Community Outreach Division recently hosted its second annual Grantee Training in August. Over the course of two days, 95 individuals from 70 grantee agencies learned about VHDA grant programs, resources and statewide housing initiatives. The meeting featured 17 workshops, 24 speakers and an evening networking session. Thanks to all who attended and presented.

Learn About VHDA Grants >>

September 21, 2017

VHDA/USDA Loan Program Helps Rural Home Buyers Purchase Existing Manufactured Homes

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Previously, Only New Manufactured Homes Were Eligible

The Virginia Housing Development Authority recently partnered with a federal agency to pilot a new home loan program in Virginia that helps low to moderate-income individuals and families buy manufactured homes in rural areas.

By agreeing to join the Existing Manufactured Housing Unit Financing Pilot Program offered by the United States Department of Agriculture’s Office of Rural Development, VHDA has been able to expand its existing VHDA/USDA loan program from financing only new manufactured housing – defined as one year old and newer – to financing existing manufactured housing that can be between one and approximately 10 years old. As a result, many more manufactured housing units are now available to be financed with the multiple benefits offered by VHDA and USDA.

“The beauty of this loan program is that it offers zero down payment, minimal cash out of pocket, a less expensive guarantee fee, and VHDA’s low interest rate – these benefits combined give rural home buyers a great deal,” said Allen Andrs, VHDA Mobile Mortgage Field Originator. “Because VHDA typically offers a below market interest rate and USDA offers the lowest loan guarantee fee available, I believe this is the best home loan program in the state, if not the country.”

Allen Andrs, VHDA Mobile Mortgage Field Originator and Tenesha Bullock, Virginia’s first borrower to use the VHDA/USDA loan program, stand beside VHDA’s Mobile Mortgage Office.

The pilot loan program became available in Virginia this year when Michael Urban, USDA Single Family Housing Program Director, transferred from Vermont and was able to have Virginia included with the eight other states in the pilot.

“This program’s out of pocket expenses are definitely less for home buyers,” said Urban. “Our financing is 100% of the appraised value, and then we allow closing costs to be rolled in if the property appraises high enough, so some of our candidates could truly get into their home with no money out of pocket, while other loan programs have down payment requirements. The bottom line is that this program is helping more people get into homeownership.

Michael Urban, Virginia’s Single Family Housing Program Director for USDA – Rural Development and Tenesha Bullock, Virginia’s first borrower to use the VHDA/USDA loan program, stand in front of her new manufactured home.

“We discussed this pilot program with VHDA, and it just so happened that at the time VHDA’s Mobile Mortgage Office was working with first-time home buyer Tenesha Bullock on the purchase of her manufactured home with another loan product,” he added.

Andrs noted that Bullock’s loan application fit the guidelines of the new program, because the house she was buying was a 14-month-old manufactured home that was a model on a dealer’s lot. “Under the current USDA Guarantee program, we can’t finance manufactured homes that are greater than 12 months old. As a result, many older units on dealers’ lots wouldn’t have qualified, so Tenesha wouldn’t have been eligible. Fortunately, she qualified under the pilot program, and we were able to help her buy that home. As a result, she became VHDA’s first borrower using the VHDA/USDA loan program,” he said.

Allen Andrs, VHDA Mobile Mortgage Field Originator, meets with Tenesha Bullock, Virginia’s first borrower to use the VHDA/USDA loan program, inside VHDA’s Mobile Mortgage Office.

“It’s the best thing that has ever happened to me,” said Bullock. “I would absolutely recommend this program to other home buyers, because it gives people who may have lower incomes a chance to obtain homeownership.”

Bullock added that the no down payment feature was key to her purchase of the house. “Instead of taking a couple of years to save the thousands of dollars needed for a down payment, I was able to pursue homeownership immediately through this program,” she said.

Andrs said that over the life of Bullock’s 30-year fixed rate loan, he estimates she will save over $18,000 as a result of Rural Development’s loan guarantee fee, which is the lowest on the market.
“I am very fortunate to be the first one in this program, and I’m glad that VHDA was able to switch me over to the VHDA/USDA loan before I closed on the other loan. They saved me a lot of money on my monthly payment – I couldn’t be happier,” Bullock concluded.

Tenesha Bullock, Virginia’s first borrower to use the VHDA/USDA loan program, stands on the front deck of her new manufactured home.  

In addition to new construction, the pilot program allows for financing to purchase an existing manufactured home, on a permanent foundation, that was manufactured after January 1, 2006.
Manufactured homes are defined as homes that are factory-built in the U.S. to federal construction standards. These homes are built on permanent chassis so they can be transported; however, they typically are not moved after they are installed. Most manufactured homes in Virginia are identified as vinyl-sided ranchers on masonry foundations.

To learn more about the VHDA/USDA loan program or find out about eligibility requirements, contact Allen Andrs, VHDA Mobile Mortgage Field Originator, at Allen.Andrs@VHDA.com or (804) 837-1879.

Homebuyers can also use VHDA’s “Find a Lender” search on VHDA’s website (vhda.com) to locate local lenders who can assist with VHDA loans and interest rates.