January 31, 2018

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

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Federal Housing Policy

Three Big Policy Trends for 2018

At the Mortgage Bankers Association (MBA) Independent Lenders Conference, the consensus was that GSE reform, tax reform and regulatory reform will keep the industry busy in 2018. This panel discussion overview provides a summary of views on what to expect in each over the coming year with the overall conclusion being that the status quo is going to end.

Rental Housing

U.S. Regulators Ready to Ease Check on Property Values

U.S. bank regulators plan to relax commercial real estate lending rules by allowing more deals to go ahead without an independent appraisal of the property’s value. Under existing rules, commercial real estate worth more than $250,000 must have an independent third-party appraisal. That threshold would double to $500,000 under proposed reforms.


HUD to Consider Eliminating Manufactured Housing Regulations

HUD has announced that it is launching a “wholesale review” of its manufactured housing rules as part of a “broader effort to identify regulations that may be ineffective, overly burdensome, or excessively costly given the critical need for affordable housing.”  For the next 30 days, HUD will accept public comments to help the department identify regulations that may be “outmoded, ineffective or excessively burdensome” and should be “modified, streamlined, replaced or repealed.”

Housing Market Conditions

Amazon Pick for Second HQ Likely in Already Overheated Housing Market

CoreLogic monitors the health of the housing economy through historic home price changes and other market conditions including sustainability of prices in the market, referred to as the CoreLogic Market Condition Indicators (MCI).  In reviewing conditions in the 20 second round markets chosen by Amazon, CoreLogic concludes that  half, including Northern Virginia, are currently overvalued.

January 23, 2018

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

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Federal Housing Policy

What a Government Shutdown Means for Housing

A summary of shutdown impacts on the mortgage industry. Despite substantial reductions in HUD staffing, most key federal mortgage market functions would continue, but some mortgage closings could be significantly delayed.

What Does a Shutdown Mean for Washington Region’s Economy?

An economic and housing market data analysis to gauge the potential economic impacts of government shutdowns of varying durations.

Federal Housing Trust Fund

Housing Trust Fund at Risk Due to Tax Reform 

Due to unintended impacts from the “Tax Cuts and Jobs Act” signed into law in December, Fannie Mae and Freddie Mac (the Enterprises) have announced they will likely need an advance from the U.S. Treasury – a move that, under current Federal Housing Finance Agency (FHFA) policy, risks a suspension of the Enterprises’ statutorily required funding for the national Housing Trust Fund.

Government Sponsored Enterprise (GSE) Reform

Is the Senate Planning to Move Fannie, Freddie into Receivership?

The Senate is examining a plan from the Federal Housing Finance Agency that could turn Fannie and Freddie into utilities with access to an explicit government guarantee against catastrophic loss.  However, the Senate bill would differ significantly from the FHFA’s proposal.  It would replace the GSEs with at least 10 private-market guarantors.

Rental Housing Programs

Fannie Mae Wants Affordable Housing Developers to Focus on Resident Wellbeing

Last year, Fannie Mae launched a program designed to increase the development of healthy living options for residents of affordable, multifamily rental properties. The program, called Healthy Housing Rewards, targets developers and offers them an incentive to include healthy design features, like including common spaces, community gardens, playgrounds, into the design of newly constructed or rehabilitated affordable, multifamily rental properties. Now, Fannie Mae is rolling out a new feature of the program that encourages developers to focus more on the health and wellbeing of their residents..

Seven Predictions for the Multifamily Sector in 2018

“Stable” is the word that encapsulates the anticipated state of the multifamily sector this year.  Little change is expected by most market experts.

Apartment Rent Gains Slow

U.S. multifamily rents held steady in December, finishing 2017 at $1,359 on average--up 2.5 percent for the year.  "While that represents a solid gain, it also is the smallest annual increase since 2010," the YardiMatrix Rent Survey said, noting rents have grown by at least 3.3 percent every year since then, peaking at 5.4 percent in 2015 and declining to 3.4 percent in 2016.

Homeownership Programs

House Passes Bill That Eases HMDA Requirements for Smaller Lenders

The House of Representatives this week passed a bill that exempts some smaller lenders, community banks, and credit unions from the additional HMDA reporting requirements that went into effect at the beginning of this year.

January 18, 2018

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

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Federal Housing Policy

Top Democrats Want Credit Reporting Agencies Severely Punished for Equifax-style Breaches 

Two Senate Democrats want there to be much stiffer penalties should any credit reporting        agency, Equifax included, fail to protect consumer data again. On Wednesday, January 10, Sens. Mark Warner, D-Virginia, and Elizabeth Warren, D-Mass., introduced a bill that would increase oversight of credit reporting agencies and allow the government to impose financial penalties on the agencies for failing to secure consumer data.

Financial Services Groups Ask Congress to Pursue New Data Breach Rules

The trade groups that represent the financial services companies impacted by the Warner-Warren bill are also asking for the government to enact new data security rules. In a letter sent to House Energy and Commerce Committee Chairman Rep. Greg Walden, R-Oregon, and Rep. Bob Latta, R-Ohio, the chairman of the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection, a collection of 22 trade groups say that they support new data security legislation because their member companies take data security “very seriously. The groups also lay out their vision for how that data security legislation should look.

Former FHA Head Joins Calls for Reverse Mortgage Separation

There continues to be concerns about the negative impact that reverse mortgages are having on FHA’s capital reserves. Carol Galante, former head of FHA, is among the growing chorus of housing experts who believe the federally backed reverse mortgage program should be separate from the Federal Housing Administration’s other loans.

MBA Calls for Improved Policing of VA Loan “Churning”

There is growing concern in Congress about serial cash-out refinancings of mortgage loans to veterans through the VA program. Mortgage Bankers Association Chairman David Motley, in testimony before a House subcommittee, said lenders who engage in serial refinancing ("churning") of Veterans Affairs loans run counter to sound lending practices and expressed support for measures that result in stronger policing of such practices.

Bill Would Rein in Mortgage Companies Targeting Veterans

U.S. Sens. Elizabeth Warren and Thom Tillis have introduced a bill aimed at cracking down on mortgage lending companies targeting veterans, and say the measure is gaining support.

Homeownership Programs

HousingWire—Student Loan Crisis Could be Worse Than Originally Thought

In response to the release of a new study by the Brookings Institute regarding the scope of the student loan default “crisis” (see  below), HousingWire conducted further analysis to determine the potential scope of negative impacts on the first-time home purchase market.

Brookings—The Looming Student Loan Default Crisis is Worse Than We Thought
This report analyzes new data on student debt and repayment, released by the U.S. Department of Education in October 2017. Previously available data have been limited to borrowers only, follow students for a relatively short period (3-5 years) after entering repayment, and had only limited information on student characteristics and experiences. The new data allow for the most comprehensive assessment to date of student debt and default from the moment students first enter college, to when they are repaying loans up to 20 years later, for two cohorts of first-time entrants (in 1995-96 and 2003-04).

The Unintended Effect of New Tax Laws on Property Tax Servicing

The Tax Reform Bill, which caps the amount of state and local taxes that can be withheld, has caused disruption of mortgage escrow accounting protocols for some servicers in high housing cost/property tax areas, including Northern Virginia, where borrowers have attempted to pre-pay their tax liability.

State of U.S. Interest Rates, Broken Down by Credit Scores

Most tracking of mortgage interest costs focus on average rates such as reported weekly by Freddie Mac. However, actual rates paid vary significantly by credit score. LendingTree recently conducted a study which analyzed the actual rates lenders offered to borrowers to see the average interest rate broken down by credit scores.

A New Approach to Mortgage Design

Since the mortgage crisis, there has been growing interest in mortgage structures that accelerate equity growth for borrowers. Currently, the GAO is studying the issue at the request of Congress.  This article lays out one conceptual approach for achieving this goal.

Demographic Trends Impacting Housing

What is the Biggest Demographic Trend in Virginia?

Behind all of the demographic trends being tracked and reported on by the Demographics Research Group at UVA, there is one significant driving factor: aging. The aging of Baby Boomers is not only swelling the 65+ population, but is also having a ripple effect across all age groups, slowing growth in the working-age population and often causing decline in the school-age population. This report summarizes UVA’s findings regarding this trend.

January 9, 2018

So Tax Reform Passed… What Happens to Private Activity Bonds?

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As you likely heard, the affordable housing community was scrambling to figure out how to deal with the potential loss of Private Activity Bonds (PABs) under the tax reform legislation, as first proposed.  PABs are tax-exempt bonds issued by VHDA to finance rental housing. PABs are also convertible into Mortgage Credit Certificates (MCCs) for use in our Homeownership program. The House version of the bill completely eliminated PABs. Well, good news for PABs: In the tax reform legislation as signed into law, PABs as they existed before tax reform were entirely preserved.

What does this mean for VHDA and its customers?

Both our Homeownership and Rental programs will continue to operate as they have in the past, including the issuance of MCCs for home loans, and the issuance of tax-exempt housing bonds (PABs) with the associated 4% Low Income Housing Tax Credits (LIHTC) for affordable rental housing.

While the entire LIHTC Program was preserved in the legislation, there is concern that demand for tax credits due to the decreased corporate tax rate (formerly at 35%, now at 21%) will reduce the price.  This would result in less equity funding for rental developments. This is still “TBD,” but stay tuned as we determine the impact of tax reform legislation in 2018.


Contact Toni Ostrowski in homeownership at toni.ostrowski@vhda.com or JD Bondurant in the rental division at jd.bondurant@vhda.com.

January 8, 2018

Study Confirms Housing's Role in Virginia Economy

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A recently completed study shows how vital housing is for our economy. The full report was shared at the Governor's Housing Conference in November. Commissioned by the Governor's Housing Policy Advisory Council, the research was conducted by a coalition of state universities including Virginia Tech, George Mason, VCU and William & Mary.

The study confirms the impact of housing on Virginia's economy, including a statewide analysis showing how high household financial burdens for housing and transportation are linked to low regional economic recovery.

The data provided in this new report will help VHDA and our partners focus our combined resources to address the state's most pressing housing needs. Use the link below to check out the full report.

January 3, 2018

Jan. 4 Housing Credit Workshop Rescheduled

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Due to impending inclement weather, the Housing Credit Workshop scheduled for Jan. 4 in Hampton, Va has been rescheduled to Jan. 9 at the same location. The workshop will be held from 8:30 a.m. - 12:00 p.m. If you were registered for the Jan 4. event, your registration still stands. If you would like to register, please do so by Jan. 5 at 10 a.m. Please register on our website.

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

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Homeownership Programs

Genworth:  3% Down Mortgages Key to Lock In First-time Homebuyers in 2018

According to a new survey from Genworth Mortgage Insurance, the majority of respondents anticipate strong first-time homebuyer growth in 2018, with more than half (57%) believing that the first-time homebuyer market will grow at a faster pace than the overall housing market in 2018. And for the products that will be in high demand, respondents said that the majority (63%) of mortgage lenders believe demand for 97% loan-to-value products will grow in 2018.

Coastal Mortgage Time Bomb

Reauthorization of the National Flood Insurance Program is part of Congress’ unfinished business in the New Year, and a consensus has not yet emerged despite House passage of a bill in early December. With the cost of flood insurance rising, and the current program insolvent, there is growing concern about the long-term implications for mortgage lending in flood prone areas.

I celebrated holidays in a trailer.  Don’t put it down, it was home.

This USA Today op-ed piece by Suzanne Anarde, who is program vice president for Rural LISC and leads rural investments and programming for the Local Initiatives Support Corporation, speaks to the important role manufactured housing can play in affordable housing.

Rural Lending

Rural Business Owners Face a Dwindling Pool of Lenders

This article is part of the Wall Street Journal’s ongoing series of in-depth reports on conditions in rural America. It focuses on the significant loss of local banks in rural communities, whether community-based or branches of larger regional/national banks, and describes the severe impacts the loss is having on rural businesses and economies.
(subscription only)

Government Sponsored Enterprises (GSEs)

Fannie Mae, Freddie Mac Publish ‘Duty to Serve’ Plans

On December 18, the Federal Housing Finance Agency published ‘Duty to Serve’ program market plans for Fannie Mae and Freddie Mac for the next two years. These plans lay out the GSEs’ strategies for addressing the lending needs of underserved markets.

Fannie, Freddie Announce Final Plans to Serve Underserved Markets

A summary of the focus of the GSE duty to serve plans which include three priorities:  1) manufactured housing; 2) preservation of affordable rental housing; and 3) rural housing. Central Appalachia is one the GSEs’ priority underserved rural regions.

Fannie-Freddie Plan to Modify Credit Scoring, Servicing, Appraisals

On December 21, the Federal Housing Finance Agency (FHFA) announced the release of its 2018 Scorecard, which outlines the conservatorship priorities for the GSEs. These include: 1) if appropriate, to implement a new credit scoring model; 2) addressing mortgage servicing technology; and 3) appraisal process modernization.

Fannie-Freddie Talks Set Competition as the Cost of Freedom

Senator Mark Warner and Senator Bob Corker are working to develop a plan that would lower barriers to entry for secondary market competitors to the GSEs by removing some of the advantages Fannie Mae and Freddie Mac now possess.

January 2, 2018

Blueprint Virginia 2025 Features Housing Components

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The Virginia Chamber of Commerce recently released Blueprint Virginia 2025, a comprehensive initiative that provides business leadership, direction, and long-range economic planning for Virginia. In this report, housing is directly tied to providing a strong workforce and education, one of the six pillars of a growing economy.

Blueprint Virginia 2025 calls for housing programs that will support the needs of our growing population. According to the study, by 2025, Virginia’s population will add over 1 million more residents. Virginia will need a workforce to fill 800K more jobs, in addition to the 1 million jobs vacated by a retiring workforce.

To strengthen and secure the Commonwealth’s position as a global economic leader and the best state in the nation for doing business, the report provides the following recommendations for all stakeholders:

Enact policies to support workforce housing, including addressing land use issues and constraints on the construction and housing industries.
Continue to support state incentives and programs that promote housing development and redevelopment efforts in our communities.

VHDA Executive Director Susan Dewey served as a member of the Blueprint Virginia 2025 Advisory Council. As a stakeholder, VHDA will use the report to continue to support Virginia’s economy by providing quality, affordable housing.

Read the report: https://www.vachamber.com/advocacy/blueprint-virginia/   
Watch the video: https://www.youtube.com/watch?v=SQBwlUeQCwA&feature=youtu.be