Federal Tax Legislation
This advisory from Hawkins Delafield & Wood LLP provides a concise side-by-side summary of the House and Senate private activity bond provisions.
The 9% Low-Income Housing Tax Credit (LIHTC) program escaped change in both the House and Senate tax reform bills. In light of continuing support for LIHTCs, Senator Kaine has joined Senator Maria Cantwell of Washington and Senator Orrin Hatch of Utah as a sponsor of the Affordable Housing Credit Improvement Act of 2107. This bill would expand and enhance the LIHTC program to better address the nation’s substantial shortage of affordable rental housing.
HUD/FHA Administrative Challenges
FHA’s high insurance premiums and life-of-loan coverage requirements are spurring a substantial run-off of quality loans from its homeownership portfolio due to prepayments. This is driving efforts to reduce the FHA premium (rumored to happen soon) and/or repeal of the life-of-loan coverage requirement (see October 31, 2017 postings).
HUD continues to struggle in replacing/upgrading its legacy IT systems and processes that put the administration of its programs at risk. This article summarizes the findings of a recent Inspector General report finding HUD in noncompliance with the federal Digital Accountability and Transparency Act’s required reporting deadline.
Lack of adequate affordable home purchase inventory poses a challenge to Fannie Mae and other affordable housing lenders, including VHDA, in meeting first-time homebuyer needs. In response, Fannie Mae is considering a new pilot single family construction loan program to help address some of the challenges faced by buyers seeking both construction and permanent financing.
J.D. Power’s 2017 U.S. Primary Mortgage Origination Satisfaction Survey revealed that the mortgage industry’s promise of technology creating a faster and easier mortgage origination process does not appear to be fully recognized, as customer satisfaction fell due to perception of slower loan processing.
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