April 26, 2016

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

Senate Banking Committee Chair Asks GAO and CBO to Examine GSEs 

Senate Banking Committee Chair Richard Shelby (R-AL) requested that both the Government Accountability Office (GAO) and the Congressional Budget Office (CBO) compose reports on matters relating to the Federal Housing Finance Agency (FHFA) and the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. In a press release announcing the requests, Shelby suggests that the reports will help Congress adequately oversee FHFA and the GSEs and, "ensure that Congress takes steps to protect American taxpayers from risk." In a letter to Gene L. Doldaro, who administers GAO as Comptroller General of the United States, Shelby expresses concerns that recent FHFA actions, including authorizing the GSEs to offer principal reduction to a limited set of borrowers and reinstating the GSEs' annual contributions to the Housing Trust Fund, risk increasing the GSEs' role in the housing market. "Overall," Shelby argues, "these FHFA actions raise questions about the goals of the conservatorship and whether its ultimate purpose has changed." Shelby asks GAO to examine and report on how these recent policy decisions could impact the GSEs' market presence, the ability for competitors to enter the secondary housing market, and the risk that the GSEs may have to receive federal assistance in the future.

Representative Kuster Introduces Bill to Preserve Rental Assistance for Certain USDA Section 515 Properties 

Representative Ann McLane Kuster (D-NH) introduced the Rural Housing Preservation Act of 2016, H.R. 4908, which seeks to provide relief to rural multifamily developments financed under the U.S. Department of Agriculture (USDA) Section 515 Rural Rental Housing Loan Program that will lose rental assistance in the future due to pre-paid or maturing mortgages. Existing USDA rental assistance contracts on multifamily developments financed with Section 515 loans terminate when the loans are fully paid. There are 11,576 properties in the Section 515 program that will have their rental assistance expire over the next ten years due to mortgages fully maturing or owners pre-paying those mortgages, affecting over 215,000 units and 344,000 individuals. Using data provided by USDA, NCSHA has prepared a summary chart showing how many mortgages USDA expects to mature over the next four years in each state.

IRS Publishes MRB Purchase Price Limits and Safe Harbors for 2016 

The Internal Revenue Service (IRS) released Revenue Procedure 2016-25, which establishes the nationwide average purchase price limits and average area purchase price safe harbors for the Mortgage Revenue Bond (MRB) and Mortgage Credit Certificate (MCC) programs. The Revenue Procedure sets the national average purchase price at $266,400, an increase of just over four percent from last year's limit of $255,300. HFAs and other MRB and MCC issuers must use the national purchase price figure when computing the housing cost/income ratio, which provides for an upward adjustment to the percentage limitation in high housing cost areas.

Senate Approves Measure to Consider Energy Efficiency in FHA Mortgage Underwriting Process 

The Senate passed an amendment that would allow lenders to account for a home's energy efficiency and expected monthly utility bill savings when determining borrowers' eligibility for Federal Housing Administration (FHA) insured single-family loans. The amendment, sponsored by Senators Johnny Isakson (R-GA) and Michael Bennet (D-CO), would require FHA to create new guidelines that enable lenders issuing FHA-insured loans to take into account expected energy savings from monthly utility bills when calculating borrowers' debt-to-income and loan-to-value ratios. In floor statements, Isakson and Bennet emphasized that the initiative would be voluntary. Under it, mortgage applicants could request an energy audit to determine the energy efficiency of a home and the expected savings on monthly utility bills compared to other homes in the area. The bill also directs FHA to establish an advisory group consisting of representatives from the housing and energy efficiency sectors to help it develop and administer the new energy efficiency guidelines.

Senators Cantwell and Schumer Press for Expanded Housing Credit Authority at New York City  

Senators Maria Cantwell (D-WA) and Charles Schumer (D-NY) were joined by New York City Housing Development Corporation President Gary Rodney, New York State Homes and Community Renewal Commissioner and Chief Executive Officer James Rubin, and other New York Housing Credit stakeholders for a rally in support of expanding the Housing Credit at a New York City Credit-financed supportive housing development for young people aging out of foster care. The event highlighted the need for more affordable rental housing and Senator Cantwell's forthcoming legislation that would increase Housing Credit authority by 50 percent and include other proposals to strengthen the program. NCSHA is working closely with Senator Cantwell's office as they develop the legislation. The ACTION Campaign, which NCSHA co-chairs with Enterprise Community Partners, is organizing nationwide grassroots support for this effort.                

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