GSE reform is happening: Are people paying attention?
The disagreement on what comes next
Congress recently adopted so-called government-sponsored enterprise “Jump Start” legislation. Since the bill actually restricts actions to facilitate GSE reform, this is somewhat of a misnomer. But the goal is understandable. Congress wants to reserve to itself the right to make the big picture GSE reform decisions, like whether there should be a federal guarantee and whether and in what form Fannie Mae and Freddie Mac should survive. But no one should be misled by the lack of comprehensive Congressional action into thinking that GSE reform is on hold. Fundamental reforms already have or are now taking place – reforms that reduce risk, protect taxpayers and build on lessons we learned from the 2008 crisis. The most fundamental reform is loan quality. The GSEs would not have gone into conservatorship if they simply hadn’t made no doc (Alt A) loans and purchased MBS securities. With QM and strong underwriting standards, Alt A is a thing of the past. And GSEs have not only stopped making portfolio purchases, they are unwinding their existing portfolio holdings.HUD Proposes Changes to FHA-HFA Multifamily Risk-Sharing Program Regulations
HUD published a proposed rule in the Federal Register amending existing regulations for the Section 542(c) Housing Finance Agency (HFA) Risk-Sharing Program. HUD explains in the proposed rule that the existing regulations were last updated in 2000 and some aspects have since become outdated. The proposed rule, largely informed by dialogue with NCSHA and a working group of HFAs, is intended to better align the regulations with current industry and HUD policies and practices and provide greater flexibility for program participants. The proposed rule seeks to align the Risk-Sharing program with other HUD program requirements, thereby streamlining and facilitating program administration by HFAs and HUD oversight. First, HUD proposes that certain loans made by Level I HFAs (those that assume 50 percent or more of the risk of the loans) do not need to be regularly amortizing, provided that the loans have a minimum term of 17 years and HUD approves the HFA's underwriting standards, loan terms and conditions, and asset management and servicing procedures. In its explanation of the proposed rule, HUD says non-fully amortizing loans are not unusual in multifamily lending and this change would align the Risk-Sharing program with conventional industry practices, particularly for Housing Credit transactions. HUD also proposes to amend the program so that supportive housing developments financed by Level I HFAs would be subject to the same underwriting standard as Section 202 developments for the elderly, thereby allowing the use of contract rents in the loan underwriting process.HUD Awards $1.6 Billion For Local Homeless Programs
Funding support to thousands of local homeless housing and service programs - Virginia $23,471,202U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro awarded $1.6 billion in grants to provide funding to 6,400 local homeless housing and service programs across the U.S., Puerto Rico, Guam and the U.S. Virgin Islands. The Tier 1 Continuum of Care (CoC) grants announced today support the Obama Administration’s efforts to end homelessness by providing critically needed housing and support services to individuals and families experiencing homelessness. HUD will award approximately $300 million in “Tier 2 grants” in the spring to support hundreds more local programs.
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