The Senate passed by unanimous consent H.R. 3700, the Housing Opportunity Through Modernization Act (HOTMA), to streamline and reform several federal housing assistance programs. While there was a Senate version of this bill, as NCSHA reported on June 23, Senate passage of the House-passed version expedites the process and now H.R. 3700 is headed to the President's desk to be signed into law. When enacted, HOTMA will streamline Housing Choice Voucher program inspections, make project-basing vouchers more flexible, and provide public housing agencies (PHAs) greater flexibility to transfer funding between their operating and capital funds. HOTMA also makes several adjustments to federal single-family housing programs, including provisions designed to make it easier for condominium mortgages to be insured by the Federal Housing Administration and directing the U.S. Department of Agriculture (USDA) to adopt procedures that would allow certain lenders to directly endorse loans through the Section 502 Guaranteed Rural Housing Loans program. The Congressional Budget Office estimates that HOTMA will save the government $311 million over five years.
Senator Maria Cantwell (D-WA) and Finance Committee Chairman Orrin Hatch (R-UT) introduced S.3237, the Affordable Housing Credit Improvement Act of 2016. This comprehensive bill builds on Housing Credit legislation the two Senators introduced together in May, S.2962 (also titled the Affordable Housing Credit Improvement Act of 2016). The new bill includes the three provisions also contained in S.2962—a 50 percent increase in Housing Credit authority, minimum 4 percent rates for both acquisition and bond-financed properties, and an income averaging option—plus a host of additional programmatic changes intended to help the program reach more people and places and streamline its administration.
Senate Finance Committee Ranking Member Ron Wyden (D-OR) introduced the First-Time Homebuyer Credit Act of 2016, S. 3175, which would provide a refundable tax credit for first-time home buyers, subject to the purchase price and income limits described below. Under the bill, first-time home buyers would receive up to $10,000 in a refundable tax credit, equal to 2.5 percent of the purchase price for homes purchased for less than $600,000. Homes purchased for $600,000 – $700,000 would be eligible for a smaller credit determined by reducing the maximum credit by how much the purchase price exceeds $600,000. For example, a home purchased for $650,000 would be eligible for a $5,000 tax credit. Homes purchased for more than $700,000 are not eligible for the credit.
The House Committee on Financial Services held a hearing 13 to examine recent changes HUD made in its Distressed Asset Stabilization Program ("DASP"), which pools delinquent Federal Housing Administration (FHA)-insured single-family loans and sells them to investors, subject to requirements designed to help homeowners avoid foreclosure while boosting HUD's Mutual Mortgage Insurance (MMI) Fund. The witness, HUD Secretary Julián Castro, defended HUD's improvements to the DASP program and disagreed with some Republicans' accusations that he had approved the changes for political reasons. During the hearing, Committee member Keith Ellison (D-MN) focused on the country's rental crisis and asked Secretary Castro for suggestions on how Congress could address it. Castro acknowledged this rental affordability crisis and its unusual presence not just in metropolitan areas but "in towns big and small throughout the country."
Enterprise Community Partners (Enterprise) recently released Giving Due Credit: Balancing Priorities in State Low-Income Housing Tax Credit Allocation Policies, which considers how state Housing Credit allocating agencies are advancing cost effectiveness while still developing and preserving affordable housing that is well-located, durable, sustainable, and connected to good schools, jobs, transit, and health care. In preparing the report, Enterprise reviewed the qualified allocation plans (QAP) of Housing Credit allocating agency in all 50 states, the District of Columbia, New York City and the U.S. territories. Giving Due Credit identifies leading approaches for a series of key issues, including reducing the cost of development and preservation, creating incentives for innovative practices, and ensuring that Housing Credits produce quality, well-located homes. The report also addresses the impact of cost-related measures on affirmatively furthering fair housing, through efforts both to revitalize distressed communities and to build affordable homes in neighborhoods of opportunity.
An article published in the spring 2016 issue of Evidence Matters, HUD's quarterly research publication, highlights state HFAs' track record of supporting sustainable and affordable homeownership lending for low- and moderate-income consumers. The article, entitled "Increasing Access to Sustainable Mortgages for Low-Income Programs," examines HFA programs and similar initiatives administered by nonprofits that prove the viability of lending to creditworthy underserved borrowers. Citing NCSHA statistics, the article notes that HFAs have financed mortgages for over 3 million first-time home buyers since the 1960s. HUD then cites independent research conducted by Stephanie Moulton of Ohio State University that finds that HFAs are "highly effective" market participants who also succeed at fulfilling their affordable homeownership missions.
