October 28, 2016

Beyond Bricks and Sticks

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A weekly digest of current trends in housing and community development. The discussion examines topics from infrastructure to community fabric.

Next Steps for the Rural Housing Network

(RECAP: Housing Virginia has wrapped up the rural housing provider discussion forums around the state, carried out in partnership with local Realtors® associations, and has begun work on a final report to be released at the Governor’s Housing Conference in November. The report tracks the changes in a range of data points to present the new picture of rural housing in Virginia. It also includes an analysis of the needs and gaps identified by housing providers in each region.)

Overcoming NIMBY

(RECAP: The tools for overcoming NIMBYism (Not In My Back Yard) include transparent communication, dispelling myths with facts and finding community supporters who understand the benefits that quality housing can bring to their neighborhood. This portal gathers all of Housing Virginia’s Overcoming NIMBYism programs and materials for easy access.)

Revitalization without Displacement

(RECAP: Communities large and small are looking for ways to create prosperity for everyone. Smart Growth America’s Revitalization without Displacement Technical Assistance is designed to assist your community, poised for redevelopment, by identifying where public policy or programs could help to mitigate negative effects of neighborhood revitalization in anticipation of incoming change.)

Think Outside the Public Meeting

(RECAP: If you wait for people to come to you, you will have a meeting composed primarily of the most informed, vocal and angry individuals in the community. Give everyone a chance to participate. Try reaching your target community with surveys, flyers and activities at hidden-in-plain-sight community gathering spots like high school football games and farmers’ markets.)

Four Takeaways from the White House Housing Development Toolkit

(RECAP: While Constitutional limits on the federal government’s role in local land use policy mean that this toolkit is mostly advisory in nature, it does send a powerful message that there is much that local and state governments can do to achieve more equitable housing development.)

October 27, 2016

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

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Rep. Brady Plans to Move Tax Reform Legislation in 2017

The House’s top taxwriter wants to pursue tax reform legislation next year, according to the Ways and Means Committee’s Republican chief tax counsel. “The committee is now focused on the ongoing work of building tax reform legislation based” on the tax blueprint under the House GOP’s “Better Way” policy platform, said Barbara Angus, chief tax counsel for Rep. Kevin Brady. “The plan for Chairman Brady is to move tax reform legislation as early as 2017,” Angus said in a panel at the Tax Executives Institute conference in Philadelphia. The counsel’s announcement comes as the federal government marks the 30th anniversary of the Tax Reform Act of 1986, a major overhaul of the tax code by the Reagan administration and Congress. “Chairman Brady often says that tax reform is something that happens only once in a generation,” Angus said. “With 30 years gone by since ‘86 Act, the time has really come.”

HUD Proposes Energy Benchmarking Requirement for Multifamily Housing  

HUD issued a notice in the Federal Register October 4 requesting public comments on a proposed requirement for owners of HUD-funded multifamily housing to implement energy benchmarking in their properties, consistent with the President's Climate Action Plan and other Administration and HUD initiatives to improve energy efficiency in HUD-assisted properties. Utility benchmarking—the practice of tracking the utility consumption of a development on an on-going basis, calculating energy and water efficiency of the development, and comparing its efficiency to similar developments—would allow owners to better understand their buildings' energy and water performance, prioritize operational and capital improvements, verify the return on those investments, and plan future budget needs. HUD plans to use the information to develop a more accurate picture of energy usage across a variety of construction and subsidy types.

MBA: Multifamily Lending Up 28% in 2015

Nearly 3,000 lenders provided $249.8 billion for five-plus unit apartment buildings last year--a 28 percent jump year-over-year--the Mortgage Bankers Association reported this morning.
"Multifamily mortgage borrowing and lending set a new record in 2015," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "Demand for mortgages was driven by strong property fundamentals, increasing property values, a robust transaction market and low interest rates." Woodwell noted that the sector's mortgage capital came from record lending by banks, Fannie Mae, Freddie Mac and life insurance companies. "As we look at 2016 and 2017, those factors appear to remain in place," he said. Multifamily mortgages originated in 2015 went to a variety of investors, Woodwell said. By dollar volume, the greatest share--35 percent--went into commercial bank, thrift and credit union portfolios. MBA reported 63 percent of active lenders made five or fewer multifamily loans during the year.

Housing Spotlight: The Long Wait for a Home

NLIHC's new report Housing Spotlight: The Long Wait for a Home about Housing Choice Vouchers (HCVs) and Public Housing waiting lists. An NLIHC survey of Public Housing Agencies (PHAs) indicated that 53% of HCV waiting lists were closed to new applicants and another 4% were open only to specific populations, such as homeless individuals and families, veterans, persons with a disability, or local residents. Sixty-five percent of closed HCV waiting lists had been closed for at least one year, more than half did not think the list would reopen within the next year, and wait times for HCVs often spanned years. The findings make clear that we must expand housing resources for our nation’s lowest income renters. HCV waiting lists had a median wait time of 1.5 years for housing assistance. Twenty-five percent had a wait of at least 3 years. Twenty-five percent of the largest PHAs (5,000+ vouchers and public housing units combined) with HCV waiting lists had a wait time of at least 7 years. The average HCV waiting list consisted of 2,013 households. Public Housing waiting lists had a median wait time of 9 months. Twenty-five percent of them had a wait time of at least 1.5 years. Public Housing waiting lists had an average size of 834 households. Extremely low income (ELI) households, whose incomes are at or below 30% of the area median income, accounted for 74% of households on the average HCV waiting list and 67% of households on the average Public Housing waiting list.

Here are the Top 5 Trends in Real Estate Over the Past 35 Years

Thirty-five years ago the housing market looked drastically different, with the word “internet” nowhere to be found and the thought of less than a 4% mortgage rate crazy. The National Association of Realtors, however, has followed the changes every step of the way, releasing its Profile of Home Buyers and Sellers survey since 1981.  “When the Profile of Home Buyers and Sellers made its debut 35 years ago, consumers and Realtors navigated a much different real estate landscape,” said NAR President Tom Salomone on the upcoming survey results. The survey is the longest-running series of national housing data which evaluates the demographics, preferences, motivations, plans and experiences of recent homebuyers and sellers.
In anticipation of the 2016 survey release on Oct. 31, NAR identified five noteworthy real estate trends since the survey’s inception.

October 20, 2016

Beyond Bricks and Sticks

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A weekly digest of current trends in housing and community development. The discussion examines topics from infrastructure to community fabric.

Best Practices — Housing Trust Funds 

(RECAP: These easy-to-understand fact sheets, compiled by Housing Virginia, illustrate some of the best practices in Virginia’s affordable housing. The fact sheets are listed by name of the featured organization, and are also grouped into 5 major categories.)

A Champion For Kids

(RECAP: Under Thaler McCormick’s leadership, Norfolk’s ForKids has developed a host of public, private and nonprofit partnerships that have helped to make it one of the largest, most effective services providers for homeless families in the state.)

New Tax Credit Proposal Aims at Affordable Housing Shortage

(RECCAP: Sen. Wyden (D-OR) has released draft legislation of the proposed Middle-Income Housing Tax Credit (MIHTC) of 2016. Inspired by the Low-Income Housing Tax Credit program, Wyden’s legislation would direct federal funds to state housing authorities that would, in turn, provide tax credits to developers for the creation or renovation of new affordable rental housing.)

Smart Communities Require Smart Planning

(RECAP: Planners have more types of data available to them than ever before. Learn how GIS software giant — and APA partner — Esri is helping communities unlock the power of that information by connecting people, data, and tools regionally and locally.)

5 Ways for Nonprofits to Tell an Ethical Story

(RECAP: Storytelling is inherently value neutral, and it can be victimizing or empowering depending on what the narrative says and how it is used. Here are five ways we can all be more empowering storytellers.)

October 19, 2016

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

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America’s New Normal Will Look Pretty Slow, Fed Economist Says 

The new normal for long-run U.S. economic growth could be 1.5 percent to 1.75 percent a year, a major slowdown from the 1990s and early 2000s as an aging population, more gradual gains in education and weak productivity growth take their toll. In a new paper, Federal Reserve Bank of San Francisco economist John Fernald takes a stab at projecting the future normal rate of growth given long-term trends in the economy. The historically slow pace he comes up with would have major implications for America’s future prosperity. With slower economic growth, worker wages and living standards would improve more slowly than in the past, and business sales would grow more slowly. Fiscal policy makers would be held back by more modest growth in tax revenue, and monetary policy makers would face a lower neutral rate of interest -- the one that neither stimulates nor stokes the economy -- meaning less room to cut rates to spur the economy in the event of a crisis.

CFPB Structure Is Unconstitutional, Court Rules

"The CFPB's concentration of enormous executive power in a single, unaccountable, unchecked director … poses a far greater risk of arbitrary decision-making and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency," said Judge Brett Kanavaugh. The single-director structure of the Consumer Financial Protection Bureau represents an unconstitutional concentration of executive power, a federal appeals court said Tuesday. But the court stopped short of disbanding the agency, instead giving the president more power to remove its leader. In a 110-page ruling, the U.S. Court of Appeals for the D.C. Circuit said that executive power vested in the president can be conferred onto heads of lower administrative agencies, but that in doing so there have to be limits to that power. Agency directors may serve at the pleasure of the president, or in the case of independent commissions like the National Labor Relations Board or the Securities and Exchange Commission, directors are limited by the voting power of their fellow board members.

Could the House Really Flip?

House Democrats are thinking the once unthinkable: They have a real shot at winning the lower chamber next month. Such a shift would require a robust wave, as the Democrats would need to steal at least 30 seats from the largest Republican majority in decades. But the implosion of Donald Trump's presidential bid — and the Republican civil war sparked by his incendiary campaign — has left Democrats with fresh new hopes that the GOP nominee will doom the Republicans down ballot and return the Speaker's gavel to Rep. Nancy Pelosi (D-Calif.) after six years in the minority wilderness. On Wednesday, Democrats blasted out their first bit of evidence in the form of an internal poll finding that Stephanie Murphy, a Florida Democrat, has taken a 2-point lead over Rep. John Mica (Fla.), a 12-term Republican who has endorsed Trump.

Here's How Student Loan Debt Plays a Role in the Future of Housing
How does it impact housing starts?

Student loan debt is playing its biggest role in the mortgage process yet, and it doesn’t look like it’s changing anytime soon. After all, many Millennials have yet to finish college, and the tail end of the generation is barely 18. But while student debt has a bigger role, it’s not necessarily the worst thing to ever happen to housing. Currently, new data from NeighborWorks America’s fourth annual housing survey found that nearly one-third (30%) of Americans know someone who has delayed the purchase of a home because of student loan debt, up from 28% in 2015 and just 24% in 2014. The data also cited that more than half (53%) of potential home buyers with student loan debt said the debt was somewhat or very much an obstacle to buying a home, down slightly from 57% in 2015, but above the 49% rate in 2014.

October 13, 2016

Beyond Bricks and Sticks

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A weekly digest of current trends in housing and community development. The discussion examines topics from infrastructure to community fabric.

Better Housing Coalition Buys A Quality Inn? One Nonprofit Developer’s Shift in Strategy

(RECAP: Best known for investing in rundown, vacant properties with the goal of neighborhood revitalization and drawing investors, the Better Housing Coalition in Richmond is trying a new tactic. In “their largest investment to date,” the nonprofit recently acquired a former Quality Inn in the neighborhood called Scott’s Addition through a competitive bidding process, with plans of creating an entire block of mixed-income apartments.)

The First Principles of Urbanism: Part I

(RECAP: if we have any hope of guessing how technology will change cities  —  and of shaping that change with good policy and planning  —  we need to strip away our historical understandings, our focus on existing technology, and our personal preferences. In short, we need to get to first principles. And that requires looking first at the essential elements of a city: people and space.)

Better Plans for Better Places

(RECAP: How the Sustainable Communities Initiative — the most comprehensive federal support for community and regional planning in recent history — changed the way the country plans for a prosperous and sustainable future.)

How HUD and public housing authorities can support students

(RECAP: Public schools and public housing authorities share the work of serving the nation’s poorest children. Given their shared population, it is not surprising that some school districts and housing authorities are finding ways to work together. And HUD’s Moving To Work designation allows housing authorities policy and funding flexibility to pursue non-housing initiatives.)

Are solar roadways on the road to reality?

(RECAP: Beyond turning highways into green energy generators, the panels would also heat themselves, eliminating the need for salt and snow plows, and contain lights that could replace street signs or deliver warnings to motorists. Most importantly, the solar roads would pay for themselves.)

October 12, 2016

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

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Senator Wyden Formally Introduces Middle-Income Housing Tax Credit Legislation

Senate Finance Committee Ranking Member Ron Wyden (D-OR) introduced S. 3384, the Middle Income Housing Tax Credit Act of 2016 after circulating a discussion draft of the legislation earlier that day. The bill as introduced is identical to the discussion draft, which NCSHA described in our September 22 blog post. NCSHA has not taken a position on the legislation. Although Senator Wyden has formally introduced the bill, he still is seeking comments on it. Based on those comments, Senator Wyden may modify the bill before reintroducing it in the next Congress. Comments are due by December 21, and should be sent to MIHTC@finance.senate.gov. To inform NCSHA's comments, please send your feedback on the bill to NCSHA's Jennifer Schwartz by December 1.

Congress Passes Continuing Resolution Through December 9

Just two days before the government would be forced to shut down for lack of funding — Congress approved a short-term continuing resolution (CR) to fund the federal government through December 9. The CR will fund all federal agencies at Fiscal Year (FY) 2016 levels with a 0.5 percent reduction to stay within the spending limits imposed by the budget agreement Congress reached last year, which applied to FY 2016 and FY 2017 spending. The CR passed in the Senate by a vote of 72 to 26 and in the House by a vote of 342 to 85. In addition to funding at FY 2016 levels for HUD programs, the CR includes $500 million of Community Development Block Grant funds for disaster flood relief in Louisiana and other states. It also includes a provision allowing the U.S. Department of Agriculture to pay ongoing debt service for rental assistance contracts under the Section 514 and Section 516 multifamily direct loan programs.

A Simpler Path to Housing Finance Reform?

A former top regulator of Fannie Mae and Freddie Mac wants to abandon the development of the common securitization platform and use the existing Ginnie Mae platform to issue government-guaranteed mortgage-backed securities. Edward DeMarco, a former director of the Federal Housing Finance Agency, argues in a new paper that utilizing Ginnie would make for a smoother transition to a new system. "We believe that using Ginnie Mae's platform and world-recognized nameplate as a U.S. government backstop guarantor of MBS, but with private capital upfront, provides an easy transition" to a reformed secondary market, he said. Under the plan, Ginnie would still securitize Federal Housing Administration, Department of Veterans Affairs and Rural Housing Service guaranteed loans in addition to those of the government-sponsored enterprises.

NAR Forecasts Heated Housing Market in 2017

Home sales to continue to increase next year
Predictions from the National Association of Realtors, the Mortgage Bankers Association, Fannie Mae and Freddie Mac show that home sales are going to heat up in 2017, according to a blog by NAR. NAR predicted existing home sales will reach 6 million in 2017, an increase from this year’s forecast of 5.8 million, according to the blog. But this is on the low-end of the predictions. MBA predicted home sales will reach 6.5 million and Fannie and Freddie forecast home sales will come in at 6.2 million. A huge wave of Generation Yers, who have delayed home buying, are emerging into their key buying years. They are predicted to keep home sales and condo sales strong well into 2020, according to economists.

Do we Have a Generation Stuck in Starter Homes?

You may have heard that the share of first-time homebuyers has declined in recent years. That’s true if you’re looking just at the housing market since 2008, but you have to look behind the numbers and at a longer time frame to see that first-timers have fared well recently compared with repeat homebuyers who have truly stalled. The first-timers’ share of all government-sponsored enterprise (GSE) and Federal Housing Administration (FHA) loans declined from 59 to 57 percent between January and June 2016, and the share hasn’t been above 60 percent since hitting highs of 62 and 63 percent in 2009 and 2010.

October 10, 2016

Housing Credit ‘How to Apply Workshop’ is Now ‘Q.A.P. Workshop’


News from the Housing Credit Department

VHDA’s “How to Apply Workshop” has been renamed! After hearing from our business partners, we’re proud to announce our new Q.A.P. Workshop:
Q. (answering your) Questions
A. (about Housing Credit) Administration
P. Policy and Procedures

Our revamped workshop still covers Q.A.P. and program changes, rules of ranking and the program schedule.  In addition, it now also delves deeper into components of the Reservation, Allocation and 8609 applications, including a tab-by-tab review of the supporting documents required to be submitted with each application.

This workshop is designed for staff members who need to understand exactly what information and documentation are required for a successful Housing Credit application in Virginia, as well as how to submit this information.

Q.A.P. workshops will be presented:

  •  December 8, 2016 in Fairfax, Va. (Fairfax Marriott)
  • January 2017 in Richmond (VHDA’s Virginia Housing Center, Glen Allen, Va., with a simultaneous web broadcast available for viewing at VHDA’s Southwest Virginia Housing Center in Wytheville, Va.)
  • January 2017 in Norfolk, Va. (note the new location: Doubletree Hilton Norfolk Airport).

Please join us! Register to attend.

October 7, 2016

Three Upcoming Training Opportunities for Homeownership Partners

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VHDA is offering three training opportunities for our Homeownership partners in Southwest Virginia on Oct. 19 and 20. Please see our website for registration: vhda.com/partnertraining.

These trainings include:

VHDA Train the Trainer PLUS (Oct. 19, 9 a.m. – 12:30 p.m.) 

Southwest Virginia Association of REALTORS in Abingdon

Learn about VHDA's Homebuyer Education Class and how you can facilitate the class in your community. Once you complete this training, you’ll be listed as a VHDA Qualified Trainer on vhda.com. You’ll be trained how to teach or facilitate a VHDA Homebuyer Class and authorized to sign certificates of completion for individuals who have completed the class. Each borrower applying for a VHDA loan must take the Homebuyer Education Class, either in person or online.

VHDA  Real Estate Professional Training:  The Key to Serving First-time Homebuyers (Oct. 19, 1 p.m. – 3:30 p.m.)

Southwest Virginia Association of REALTORS in Abingdon

Attending both trainings? VHDA will provide lunch! In this second session, you’ll learn about two of our newest products and how they can help first-time homebuyers purchase a home with zero down. VHDA's Down Payment Assistance Grant (DPA) and Mortgage Credit Certificate (MCC) program are great ways to make buying a home more affordable. In addition, this two-hour course will also provide valuable information about all VHDA loans. After you complete the training, you're qualified to join VHDA's Real Estate Agent Connection program. Benefits include a free listing on vhda.com/FindARealEstateAgent. It's also great training for nonprofits that would like to gain a better understanding of VHDA loan products.

Please note: To attend either the Train the Trainer PLUS or Real Estate Professional training, please register for the Train the Trainer PLUS session. Attendees may choose to attend one or the other class, or both.

VHDA Habitat Train the Trainer (Oct. 20, 9 a.m. – 1 p.m.)
VHDA Southwest Virginia Housing Center in Wytheville

Learn about Habitat for Humanity’s Homebuyer Education Class and how you can facilitate, partner or provide oversight for the class in your community. This training is open to Habitat affiliates, educators, local governments and nonprofit HUD Housing Counseling Agencies. The Habitat Homebuyer Education Program is specific to Habitat homebuyers, and the curriculum differs from the VHDA Homebuyer Education class. This training will not qualify you to teach VHDA’s Homebuyer Education class, only the Habitat Homebuyer Education class. We encourage nonprofit partners to join us and consider the value of a partnership with a local Habitat affiliate.

Again, please see our website for registration at vhda.com/partnertraining.

October 6, 2016

Beyond Bricks and Sticks

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A weekly digest of current trends in housing and community development. The discussion examines topics from infrastructure to community fabric.

Homelessness Data Added to Sourcebook

(RECAP: Housing Virginia has added a new tool to Sourcebook: homelessness data for your jurisdiction. This new feature provides data from the most recent Point-In-Time Count and Housing Inventory Count for all available regions in the state. Sourcebook users can now see a regional snapshot of their jurisdiction’s homelessness data in one place and alongside a wide range of other data that reflect housing trends and needs in the community.)

Virginia’s National Housing Trust Fund Allocation Plan (2016 Draft)

(RECAP: The NHTF is a dedicated fund that will provide resources to build, preserve and rehabilitate housing for extremely low- and very low-income households. This HUD program will be allocated annually beginning in 2016. In Virginia, the NHTF will be administered by the Virginia DHCD. Virginia’s Consolidated Plan resources  include the Community Development Block Grant, the HOME Investment Partnership, Housing Opportunities for Persons with AIDS, the Emergency Solution Grant and the NHTF.)

Community For Adults With Disabilities Not Without Controversy

(RECAP: A housing project for people with intellectual disabilities plans to break ground in Virginia Beach in the next six months. The founder of Vanguard Landing says she’s made adjustments to ensure residents with Medicaid waivers can live there, but critics question whether the community will meet other government requirements.)

Has Planning Changed?

(RECAP: If planning hadn’t changed, the profession and practice would no longer be in existence. While planners remain loyal to the comprehensive plan as the bedrock of community planning, they’ve also invented a wide range of approaches to plans. Planning has truly become more integrative, more nimble and more specific to the culture and the circumstance of place.)

Field Notes: Modular Construction for Mid-Rise Affordable Multifamily Construction

(RECAP: Research has shown that modular multifamily construction is rapidly emerging as a competitive alternative for a number of reasons. The benefits potentially include higher financial return due to less construction interest carry and related time savings through shorter construction schedule and potentially reduced hard costs due to repeatable and higher efficiency construction methods, streamlined process, reduced material waste, innovation in sustainability and higher construction quality.)

Media partnerships help reach far-flung residents

(RECAP: How can you cost-effectively educate residents who live across a large area? Lack of budget to purchase paid advertising does not have to be a limiting factor for community organizations when designing an effective outreach program. The executive director of this Oregon nonprofit tells how he has partnered with local media to solve the problem.)

October 4, 2016

VHDA Wins Two National Housing Awards

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VHDA recently won two national awards recognizing outstanding affordable housing programs from the National Council of State Housing Agencies (NCSHA).

Our Rapid Rental Loan Refinancing and Retention Program won in the Management Innovation – Financial category for creating a proactive approach to retaining loans in VHDA’s multifamily portfolio. By approaching multifamily mortgagors with a simplified and virtually cost-free refinance process before their loan prepayment dates become available, the program has been able to refinance and preserve more than 15,000 affordable housing units in Virginia. Find out more about our multifamily financing.

Also, our MCCs Made Simple entry won in the Communications – Creative Media category for creating an informative animated video to describe the benefits of our Mortgage Credit Certificate program. MCCs can boost the tax benefits of owning a home for first-time homeowners in Virginia – potentially saving them money at tax time every year – for as long as they live in their home.

“We were very pleased that both our multifamily loan retention program and MCC promotional efforts were nationally recognized,” said VHDA Executive Director Susan Dewey. “These awards reaffirm that our efforts are strongly supporting VHDA’s mission of helping Virginians obtain quality, affordable housing.”

The NCSHA’s Annual Awards for Program Excellence honors state housing finance agencies for their outstanding public purpose programs, projects, and practices. The mission of this prestigious awards program is to recognize exemplary HFA efforts, share information among HFAs, identify industry best practices, and encourage HFA innovation. The awards were presented recently during NCSHA’s Annual Conference and Showplace.

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

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HUD Issues Proposed State Fair Housing Assessment Tool; Announces Fair Housing Pilot Program in Collaboration with NCSHA 

HUD published for public comment an updated version of its proposed Affirmatively Furthering Fair Housing (AFFH) Assessment Tool for States and an accompanying Federal Register notice. NCSHA is currently evaluating the state assessment tool and will submit comments by HUD's October 28 deadline. HFAs should provide feedback to NCSHA's Jennifer Schwartz by Friday, October 14 to inform NCSHA's comments. The notice says that based on the extensive comments HUD received after it released the first proposed state assessment tool last March, HUD has decided to extend the comment process by adding a second 30-day comment period to provide further opportunity for the public to provide feedback to HUD. Publication of the notice starts the first 30-day comment period for the assessment tool, after which HUD will consider comments and then release an updated version of the assessment tool and provide a second 30-day comment period.

FHA Proposes New Condominium Loan Requirements

The Federal Housing Administration (FHA) released a proposed rule that would revise the requirements that condominium projects must meet for their single-family units to be eligible for FHA mortgage insurance.
The proposal contains several provisions that could allow FHA to insure more condominium mortgages. These include:

  • Adjusting Owner-Occupancy Standards 
  • Amending Limits on Commercial and Nonresidential Space 
  • Insuring Individual Condominium Loans 

Senators Introduce Bill to Classify Municipal Bonds as High-Quality Liquid Assets 

A bipartisan group of Senators introduced legislation (S. 3404) that would allow large banks to count some of their municipal bond investments as high-quality liquid assets under federal bank liquidity standards. The bill is sponsored by Senator Mike Rounds (R-SD), who introduced it with Senators Mark Warner (D-VA) and Chuck Schumer (D-NY). All three are members of the Senate Banking Committee. Other cosponsors include Jon Tester (D-MT), Mark Kirk (R-IL), Heidi Heitkamp (D-ND), Tim Scott (R-SC), Joe Donnelly (D-IN), Jerry Moran (R-KS), and David Vitter (R-LA). NCSHA joined several organizations, including the National Governors Association, Government Finance Officers Association, and National Association of State Auditors, Comptrollers and Treasurers, to co-sponsor this bill. S. 3404 would modify a regulation promulgated by the Federal Reserve, the Department of Treasury, and the Federal Deposit Insurance Corporation (FDIC). The regulation, set to take effect in January 2017, would ensure that large banks hold enough liquid assets to continue making payments during periods of financial stress. Under the rule, banks with at least $250 billion in assets (or $10 billion in foreign exposure on their balance sheet) must maintain a minimum liquidity coverage ratio (LCR) comprised of certain financial investments that are considered "High-Quality Liquid Assets" (HQLAs).