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

Fannie Mae: Tax Reform Poses Positive Risk to Economy in 2018

The recent hurricanes did not cause a major shift in the outlook on economic growth in 2017 or beyond, according to the Fannie Mae Economic and Strategic Research Group’s October 2017 Economic and Housing Outlook. The GSE explained that going into 2018, Fannie Mae predicts economic growth will moderate to 1.8%. While it sees an upside risk from potential tax reform, this is offset by the potential downside risk from restrictive trade policy and geopolitical tensions. During the third quarter, the report explained consumer spending growth likely weakened, and residential investment declined sharply. However, this was partially offset by increases in business equipment investment, inventory investment and trade. But despite all these changes, Fannie Mae kept its full-year economic growth forecast unchanged at 2.2%.

MBA: 2016 Multifamily Lending Up 8% 

Multifamily lending rose by 8 percent year over year in 2016, with nearly 3,000 different multifamily lenders providing a record $269.2 billion in new mortgages for apartment buildings with five or more units, the Mortgage Bankers Association reported. MBA Vice President of Commercial Real Estate Research Jamie Woodwell said the MBA Annual Report on Multifamily Lending reflected strong lending fundamentals. "In 2016, strong property performance, rising property values and low mortgage rates all meant greater access to mortgage credit for apartment property owners," Woodwell said. "The $269 billion in lending that took place shows the breadth of the market--with loans ranging in size from tens of thousands of dollars to hundreds of millions and the largest lender closing more than 7,500 loans while 61 percent of active lenders closed five or fewer loans. Market momentum has continued in 2017, with strong demand from borrowers and a strong appetite to lend by lenders, especially of loans going to government-related entities."

U.S. Senate: Credit Bureaus Data Security and Equifax

The U.S. Senate Committee on Banking, Housing, and Urban Affairs met in an open session titled “Consumer Data Security and the Credit Bureaus” to address how credit bureaus intend on protecting consumer data—specifically in light of the recent Equifax data breach. U.S. Senator Mike Crapo (R-Idaho), Chairman of the committee delivered the opening remarks. “As a follow-up to our hearing on the Equifax data breach, we will receive testimony on the protection of consumer data at credit bureaus,” Sen. Crapo said. At the Equifax hearing, Crapo said that members expressed interest in better understanding how credit bureaus are regulated, how they protect consumer data, and whether there are gaps that Congress needs to fill. “It is critical that personal data is protected, consumer impact in the event of a breach is minimized, and consumers’ ability to access credit is not harmed,” Sen. Crapo said. “Credit bureaus play a valuable role in our financial system by helping financial institutions assess a consumer’s ability to meet financial obligations, and also facilitating access to beneficial financial products and services.

Homebuyers Want Online Mortgage Resources, but Still Prefer a Personal Touch

Although homebuyers are relying more and more on online resources to get information, a new study from Fannie Mae shows they still place more faith in real estate professionals and other personal interactions. With the market moving more toward fully digital mortgages, it may appear as though consumers would like more digital interaction and less person-to-person. A new report from the Fannie Mae Economic and Strategic Research Group shows buyers do, indeed want more online resources during their mortgage-shopping experience. A survey showed respondents want to use mobile devices nearly twice as often in the future. However, that does not mean they place less value on real estate professionals and other person-to-person interactions, the survey showed.

EXCLUSIVE: Nation's Top Mortgage Lenders Reveal Their Secrets to Success

What makes these companies tick? We asked, they answered

The top mortgage lenders of 2016 are sharing their secrets to success, explaining what pushed them into a position in the top 10. The latest Home Mortgage Disclosure Act data from the Federal Financial Institutions Examination Council shows which lenders are dominating the mortgage origination market. The No. 1 originator’s advice to small lenders just starting their journey? “Focus on your company’s culture,” Walters said. “Whether it’s a good culture or a bad culture, every company has one and it will affect your business.”

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

Written Testimony of Dr. Ben Carson, Secretary of Housing and Urban Development Before the House Financial Services Committee

Chairman Hensarling, Ranking Member Waters, and members of this Committee, thank you for inviting me to discuss the work we do at the Department of Housing and Urban Development (HUD), and my plans for fulfilling our mission with fidelity to our Congressional mandate and the best interests of the American people.
First, please know that, right now, HUD is involved in the federal response to Hurricanes Harvey, Irma, and Maria that damaged and devastated areas of Texas, Florida, Georgia, Puerto Rico, and the U.S. Virgin Islands. On a daily basis, in our interagency leadership role as the Coordinating Department for the Housing Recovery Support Function, HUD’s team is coordinating with our Federal, State, territorial, and local agency partners in the field, providing temporary and long-term housing solutions for survivors, and helping HUD-assisted clients and FHA-insured mortgage borrowers. In the long-term, HUD will play a key role in the recovery efforts in these disaster impacted regions as they rebuild. Helping the impacted communities in the aftermath of these storms is and will remain a priority for me and this Administration.

Treasury Report Calls for Extensive Regulatory Relief to Finance Industry

The U.S. Department of the Treasury released its second of four reports which called for sweeping financial reform, including changes that would weaken the Dodd-Frank Act. Back in February, President Donald Trump signed an executive order directing the Treasury Secretary Steven Mnuchin to examine the nation’s financial laws. Now, the Treasury published its findings in a 232-page report, the second of a total of four reports. It released its first report back in June this year. The report claims regulations enacted after the Great Recession made it more difficult for financial institutions to recover, and made for one of the weakest economic recoveries in U.S. history.

Can Your Home Make You Healthier — if it’s Designed Right? 

Aria Apartments in Denver is a new kind of affordable housing project. And if “affordable housing” brings to mind dimly lit, dilapidated high-rises, then tweak the mental picture and visualize a project that consists of 72 two-story walk-ups paired with 13 market-rate town houses, all of them brightly colored and spacious with a sleek, modern design. A daylit fitness room in the on-site community center looks out onto a grassy walkway where residents sit, stroll and play. Renters and owners alike can plant and pick their own produce at the 1-acre garden or buy it at a pay-what-you-can food stand. On the ground floor of each unit is bike storage, which gives residents the affordable and calorie-burning option of cycling to school or work.

Senators Ask - What's the Cost of Not Addressing America's Affordable Housing Problems?

A bipartisan group of Senators sent a letter to the U.S. Government Accountability Office, asking them evaluate America’s “troubling” housing market.  And, to figure out where the government is letting down the American people in the housing market. The group of Senators includes Lindsey Graham, R-S.C., Susan Collins, R-Maine, Tim Scott, R-S.C., Johnny Isakson, R-Ga., Christopher Coons, D-Del., and Michael Bennet, D-Colo. The GAO, a nonpartisan agency that works for Congress, investigates how the federal government spends taxpayer dollars. By sending the letter, the senators are requesting the agency to figure out how much it would cost taxpayers to fix affordable housing. In the letter to Gene Dodaro, comptroller general and head of the GOA, it asks him to assess, “What is the cost of inaction?” Or, in other words, “What is the long-term impact of failing to respond to the current conditions in the housing market with effective public-policy interventions?” As it stands, the current states of the single-family and rental sectors are “troubling,” the letter said.

Rental Market Finally Starts Cooling Down

The national average rent held steady for the fourth consecutive month in September, indicating the market may be starting to cool off, according to the latest report from RENTCafé. This lack of growth over the past four months represents the longest period of stagnation in recent history and the slowest annual growth rate in six years, according to the report, compiled by the nationwide internet listing service that enables renters to find apartments and houses for rent throughout the U.S.

Who is the New Face of American Homeownership?

The U.S. homeownership rate remains lower than it has been for more than 20 years, even though housing markets have largely recovered from the Great Recession (U.S. Census Bureau 2017). Most of the drop in homeownership is due to fewer renters choosing to purchase first homes than prior to the crisis. Researchers and policymakers have posited several possible reasons for the apparent shift in behavior, including:

1. Increased regulation of mortgage lending and stricter underwriting criteria.
2. Weak labor markets for young workers, leading them to delay household formation and homeownership;
3. Millennials’ lower preferences for owning rather than renting; and
4. High levels of student loan debt among younger households.

VirginiaHousingSearch.com - The Housing Search Site That Provides Landlords With Big Benefits

“Having a ‘live person’ you can talk to, who is friendly and helpful, versus trying to deal with the frustrations of an automated system, is why so many landlords tell us they love the VirginiaHousingSearch.com Call Center,” said Crystal Kirby, director of outreach and regional support for Social Serve, the non-profit organization that hosts and maintains this service sponsored by VHDA.

Since its 2009 launch, this free online housing search site has become a key resource for Virginians seeking rental housing. Currently there are 135,000 rental units listed on the site, which receives an average of 23,000 monthly visits.

Maximum landlord benefits

In addition to useful tools that let potential tenants search for rental homes by preference — such as size and location — the site also provides big benefits for landlords. At the top of the list is the toll-free bilingual Call Center that assists landlords who want to advertise their properties on the site. The VirginiaHousingSearch.com Call Center is open from 9 a.m. to 9 p.m. Monday through Friday and provides landlord support that includes:

• Adding photos and maps to listings and checking for typos.
• Taking calls from potential renters when the landlord is unavailable. 
• Providing timesaving tips for managing multiple properties. 
• Helping create wait-lists to prevent unwanted calls. 
• Offering tools that make it easy to advertise rental units on other online classified services.
• Developing reports to see how often listings have been viewed, and how they compare to others in the area. 
• Regularly checking in with landlords to verify that listed properties are still available and making any needed listing adjustments.
• Re-activating listings. 

Here’s how to find out more 

To learn more about everything this free marketing service has to offer landlords, visit VirginiaHousingSearch.com or call toll-free 877-428-8844.

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

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.

Recent Groundbreakings

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).

Learn More >>

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.

Learn More >>

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.)

Learn More >>

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.

Watch the Video on YouTube >>

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

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.

• Get the Free Renter Education eBook >>
• Learn More About the SERVE Family Shelter >>

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

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.