July 18, 2008

The following Federal Housing News is courtesy of the National Low Income Housing Coalition (NLIHC) and the Housing Assistance Council (HAC).

NATIONAL HOUSING TRUST FUND CAMPAIGN

House Vote on Bill that Includes Housing Trust Fund Now Week of July 21

Legislation to establish a permanent housing trust fund, which has been shuttled between the House and Senate for several months, faced another delay this past week, but advocates are optimistic that passage is on the horizon.

The housing trust fund provision is included in H.R. 3221, the Foreclosure Prevention Act of 2008, a massive bill designed to address the foreclosure crisis.  House Committee on Financial Services Chair Barney Frank (D-MA) had been hopeful that the House could have moved on the legislation as early as the week of July 14, following its passage in the Senate on July 11. But the bill was held up this week when the Administration unveiled a proposal to address the sudden sharp drop in the value of Freddie Mac and Fannie Mae stock and Mr. Frank decided to attach it to the larger bill. House leadership decided to delay consideration of the whole bill until the week of July 21 so that provision could be considered.

The House Rules Committee is expected to vote on Tuesday, July 22, to allow H.R. 3221 to proceed to the full House for a final vote. Final passage of H.R. 3221 in the House could come as early as Wednesday, July 23, at which point it would need to return to the Senate for a final vote because of expected differences with the Senate passed version that are unrelated to the Housing Trust Fund.   

Once passed by the House, H.R. 3221 could at the earliest be presented to the Senate on Monday, July 28, where it will face two votes—a first on whether to limit debate to 30 hours, also known as invoking cloture, and a second to pass the bill. A final vote could be held on Tuesday, July 29 or Wednesday, July 30.

If the Senate then approves H.R. 3221 in the same form as sent over by the House, as is expected, it will then go to the White House for the President's signature.

Advocates should continue to call their Representatives, urging passage of the bill in the House.

Connecticut Mayor Endorses NHTF

Hartford, CT, Mayor Eddie Perez has endorsed the National Housing Trust Fund Campaign. Mr. Perez is the 57th mayor and 188th elected official to endorse the campaign. Advocates are encouraged to ask their elected officials to endorse the campaign; materials to do so are at www.nlihc.org/doc/nhtfendorserformelected.pdf

THE FORECLOSURE CRISIS

Giant Bill Will Address Foreclosures, GSEs, Other Housing Issues

H.R. 3221, the Foreclosure Prevention Act of 2008, originally expected to be considered by the House the week of July 14, was delayed in its consideration as the House took stock of a proposal from the Administration to deal with the sharp drop in the stock values of Freddie Mac and Fannie Mae stock that took place over the week ending July 11. 

The new White House proposal, designed to ensure that the two Government Sponsored Enterprises (GSEs) stay afloat, would increase the government’s line of credit available to Fannie and Freddie, and would give the Treasury the authority to buy an equity stake in the companies to keep them financially sound. The plan would also give the Federal Reserve a supervisory role over the GSEs. 

The plan was designed to be included in the larger housing package, which has been ping-ponging between the Senate and House since April. The week saw growing dissent among fiscally conservative Republicans in the House and Senate over the potential cost should the GSEs require a bail out. At a Senate Banking Committee hearing, Senator Jim Bunning (R-KY), a longtime critic of the GSEs, said, “When I picked up my newspaper yesterday, I thought I woke up in France.  But no, it turns out socialism is alive and well in America.” 

House Financial Services Committee Ranking Member Spencer Bachus (R-AL), requested more time to review the White House’s proposal. In a letter to Mr. Frank, Mr. Bachus wrote, “The sweeping changes contemplated in the proposal made by the Treasury Department over the weekend represent a far-reaching overhaul of the financial regulatory structure of our housing market.”  Mr. Frank countered that “we are on track to respond quickly to what the Bush administration tells us is an urgent request for standby financial authority regarding Fannie Mae and Freddie Mac without a public hearing. But this bill will not be on the floor of the House for more than a week after the President made the request, and there are a good many discussions going on about it.” 

Secretary Henry Paulson, Jr., Mr. Frank, and Senate Committee on Banking, Housing, and Urban Affairs Chair Chris Dodd (D-CT), continue to negotiate with Congressional Republicans for the entire package. Followed a meeting with Secretary Paulson, House Minority Leader John Boehner (R-OH) acknowledged that “I don’t think there’s any question that this will become law, and become law soon.”  

H.R. 3221 would primarily expand the Federal Housing Administration (FHA) to help homeowners facing foreclosure, in a Hope for Homeowners provision expected to cost $300 billion. The bill would also create a permanent housing trust fund. If enacted, funds intended for the housing trust fund created by the bill will be diverted to pay for the Hope for Homeowners program. In the first year of the housing trust fund, which is a year after passage, 50% of the available funds will go to the fund. Seventy-five percent will go to the trust fund in the next year, and 100% each year after that. 

The bill that the House will consider is also expected to include $3.9 billion in Community Development Block Grants (CDBG), one-quarter of which must be used to assist very low income households, for the purchase and resale of foreclosed properties to prevent neighborhood blight. The White House had threatened to veto the bill over the CDBG funds, but now that the Democrats have agreed to include Mr. Bush’s GSE bail out plan in the bill, the threat of a veto is significantly reduced.

The bill as passed by the Senate also contained some miscellaneous housing-related provisions, as follows: 

• One provision would address the treatment of deferred veteran’s disability benefits in determining annual income for the purposes of the public housing and Section 8 programs by providing that such benefits would be excluded in a manner similar to the way in which back Social Security/SSI benefits are treated.
• Another section excludes a service member’s basic allowance for housing from incomes under certain limited circumstances.  

As the House considers this bill, Members expected to add back in provisions dropped from the Senate bill. In particular, the House will probably include provisions to amend various HUD programs to better coordinate them with the Low Income Housing Tax Credit. These provisions were in the House-passed version of H.R. 3221, but dropped as the Senate considered the bill. Among other things, these provisions would expedite HUD’s and the Rural Housing Service’s approval of multifamily projects funded in connection tax credits, eliminate duplicative subsidy layering reviews and property inspection requirements; increase the maximum section 8 voucher contract from 10 to 15 years, allow project-based voucher rents in tax credit projects to be increased to the maximum voucher rent, and authorize project-based vouchers in coops and building with elevators.

Advocates Urge Renter Protection Provisions in Potential Supplemental Bill

As plans for a second supplemental spending bill to focus on domestic priorities are being made in Congress, advocates are seeking to have two provisions added to the bill that would assist renters affected by the foreclosure crisis. 

As proposed, the first provision would provide a one-time appropriation of $300 million for the Emergency Food and Shelter Program (EFSP) for homeless prevention in connection with foreclosure. As the foreclosure crisis has deepened, experience on the ground and the data show that a significant number of the families losing their homes as a result foreclosure are renters, as the owners of the homes default on their mortgages. Often these families are evicted with little notice and with no ability to get back their security or other deposits. These evictions can be especially devastating for lower income families with no financial cushion to pay for moving expenses, security and utility deposits or a double rent payment, and the result can be homelessness. The EFSP program offers an established mechanism for getting funds quickly to organizations in local communities to help prevent homelessness in these situations. 

The second provision would require 90 days’ notice before eviction for renters in a foreclosed property, would allow tenants to remain during the terms of their lease under some circumstances, and would address the particular needs of tenants with housing choice vouchers. Occupants of rental housing subject to foreclosures often receive little or no notice of the foreclosure, and in most areas of the country, can be summarily evicted. In addition, when the tenant has a housing choice voucher the problem is exacerbated because even if the voucher holder is allowed to remain in the property, the new owner is not required to continue the contract with the voucher administrator, which can result in a loss of assistance for the tenant. 

Stand-alone legislation that includes these provisions has been introduced in the House as H.R. 5963 and in the Senate as S. 3034.   

These proposals will be discussed at a Hill briefing on July 23 (see following article).

NLIHC, Others to Host Briefing on Impact of Foreclosure Crisis on Renters and Very Low Income People

NLIHC will host on Wednesday, July 23, a briefing for Congressional staffers and other interested parties on the impact of the foreclosure crisis on tenants and very low income people, and the policy options for addressing these impacts. 

Keith Wardrip of NLIHC will present new research on how the foreclosure crisis has affected lower income families and tenants. Other speakers include Patrick Jackson of the United Way of America, Thomas Shellabarger of the United States Conference of Catholic Bishops, and NLIHC President Shelia Crowley. 

In addition to NLIHC, the briefing is sponsored by the Center on Budget and Policy Priorities, the Consumer Federation of America, the Corporation for Supportive Housing, the Evangelical Lutheran Church in America, the National Alliance to End Homelessness, the National Coalition for the Homeless, the National Housing Conference, the National Law Center on Homelessness & Poverty, the National Policy and Advocacy Council on Homelessness, the United Jewish Communities, and the United States Conference of Catholic Bishops.   

The briefing will be held in room 485 Russell Senate Office Building at 2 pm. NLIHC members are encouraged to contact the housing staff of their Senators and Representatives and urge them to attend.

MORE CAPITOL HILL

Details of Senate Appropriation Committee HUD Bill Available

While the Senate Committee on Appropriations voted out the FY09 Transportation, HUD and Related Agencies (T-HUD) appropriation bill on July 10, few details about funding levels for specific programs were available until the committee-passed bill and report were released July 16. Following are funding amounts and other details for key HUD programs:  

Tenant Based Rental Assistance. The committee-passed bill would provide $14.86 billion for the renewal costs for Section 8 contracts, including an advance appropriation of $4.2 billion from FY10. However, $800 million of this amount is offset by reductions in agency voucher reserves, which means that the committee level is $100 million less than the President’s budget request and only $118 million more than the FY08 enacted level. The committee’s report states that the amount provided is sufficient to fully fund all renewals, but the Center on Budget and Policy Priorities estimates that $15.26 billion is needed to fully fund all vouchers in use in FY09. The committee also continued the Section 8 renewal formula established in FY08, which is based on the data from the most recently completed federal fiscal year and which is acceptable to advocates. 

Tenant Protection Vouchers. The committee would provide $200 million for tenant protection assistance, $50 million more than the President’s budget request and equal to funding in 2008. The committee also included a provision requiring replacement vouchers for any unit occupied in the 24 months before demolition, disposition or conversion, subject to the availability of funds. 

HUD-Veterans Affairs Supportive Housing Program. The committee bill would provide $75 million for the HUD-Veterans Affairs Supportive Housing (HUD–VASH) program. This is the same amount as the FY08 enacted level. 

Project-based Rental Assistance. The committee would provide a total appropriation of $6.7 billion for FY09 and an advanced appropriation from FY10 of $1.75 billion for the project-based account. The funds available for renewal of contracts in FY09 would be $8.208 billion.  Including the advanced appropriations, this funding is $1 billion more than the President’s budget request, and $2 billion more than FY08. The committee expressed significant displeasure with HUD’s inability to provide information about the full cost of this program. “For over 2 years, the committee has attempted without success to work with HUD to determine the full costs needed to renew all expiring project-based contracts for their usual 12-month term,” the report stated. “These efforts have made it clear to the committee that both HUD and OMB have been deliberately misleading the Congress and the public on these actual program costs.” 

The committee noted that HUD’s and OMB’s actions have adversely affected owners and called “into question the government’s commitment to this long-term rental assistance program. In so doing, HUD has put hundreds of contracts at risk covering thousands of tenants across the nation.” Finally, the committee stated that while the amounts provided in the bill will not be sufficient to allow HUD to return to the practice of renewing all expiring contracts for 12 months, they should “restore some stability to the program by allowing the Department to enter into longer term contracts with owners. Such stability should provide greater certainty that tenants will be able to stay in their homes.” 

Public Housing Capital Fund. The bill would provide $2.444 billion for the Public Housing Capital Fund, including $20 million for emergency capital needs such as safety measures to address crime and drug related criminal activity. This funding level is $420 million more than the President’s budget request and $5 million more than the FY08 level. 

Public Housing Operating Fund. The Committee provided $4.4 billion for this account, $100 million more than the budget request and $200 million more than the FY08 level. 

HOPE VI. The Committee rejected the President’s attempt to once again cut this program, and provided $100 million for the HOPE VI account. This amount is the same as the FY08 enacted level. 

Housing Opportunities for Persons With AIDS. The committee bill would provide $315 million, $15 million more than both the FY2008 enacted level and the budget request. 

Office of Rural Housing and Economic Recovery. The committee included $30 million for the Office of Rural Housing and Economic Development, which is $13 million more than FY08 funding, and in doing so rejected the Administration’s attempt to defund this program.  

Community Development Block Grants.  For the CDBG account, the committee will would provide $3.889 billion, $889 million more than the budget request and $23 million more than the FY08 level. 

Home Investment Partnerships Program.  The Committee included $1.967 billion for the HOME program. This amount is equal to the budget request, and $262 million more than the comparable level for FY08. 

Homeless Assistance Grants. The bill would provide $1.667 billion for this account, $81 million more than the FY08 enacted level and $31 million more than the President’s request. Within this account, the committee provided $10 million for HUD to conduct a demonstration program in coordination the Veterans Administration and the Department of Labor to test the effectiveness of strategies to prevent veterans from becoming homeless. 

Section 202 Housing for the Elderly. The Committee bill would provide $765 million for the Section 202 program. This level is $225 million more than the budget request and $30 million more than the FY08 level. 

Section 811 Housing for Persons with Disabilities. The Committee included $250 million for the Section 811 program, $90 million more than the budget request and $13 million more than the FY08 level. 

The committee bill also includes a provision that would allow HUD to make all Notices of Funding Availability (NOFAs) available only online beginning in FY09, and one that would require HUD to increase the number of Moving to Work Agencies by three. 

As reported, the House Appropriations Committee has postponed and not yet rescheduled a mark up of its bill. In addition, no date has been set for the Senate bill to come to the floor. It is unlikely that either chamber will move on its bill before the Congressional August recess, and the possibility remains strong that Congress will pass one or more continuing resolutions to fund these and other federal programs from the date that FY09 begins on October 1 until a new administration begins in January.  

The updated budget chart can be found at www.nlihc.org/doc/FY09%20Budget-Chart-THUD-senate-comm..pdf

New Legislation

Representative Earl Blumenauer (D-OR) introduced H.R. 6495, the Transportation and Housing Choices for Gas Price Relief Act of 2008, on July 15. This bill would support programs and activities that endorse affordable transportation and housing options, including the establishment of location-efficient mortgage goals for Fannie Mae and Freddie Mac and the use of grant funds for public housing units located near public transportation. 

H.R. 6495 was referred to the House Committee on Transportation and Infrastructure as well as the Committees on Ways and Means, Financial Services, and Oversight and Government Reform for further review.    

HURRICANE RECOVERY

Advocates Weigh in on Second Supplemental

The Katrina Housing Group, led by NLIHC and comprised of several dozen organizations, has weighed in on the FY08 supplemental spending bill the Senate Committee on Appropriations is expected to mark up on July 22.  

The Senate leadership decided to draft a second supplemental appropriations bill focusing on domestic priorities, after the House scrapped many of the domestic spending provisions passed by the Senate in H.R. 2642, the FY08 war supplemental spending bill. Although $73 million was included in the final version for permanent supportive housing vouchers in Louisiana, additional funding for Mississippi and Alabama was stricken from the final bill.   

The Katrina Housing Group on July 18 sent a letter to Senate Committee on Appropriations Chair Robert Byrd (D-WV); Appropriations Committee Ranking Member Thad Cochran (R-MS); Senate Appropriations Subcommittee on Transportation, Housing, and Urban Development (T-HUD) Chair Patty Murray (D-WA), and the Ranking Member of the subcommittee, Senator Christopher “Kit” Bond (R-MO) requested that the new supplemental bill include $110 in CDBG funding for Alabama; $5 million for case management in Louisiana, $50 million for project-based vouchers in Mississippi; and $100 million in CDBG funding for Texas. Senator Byrd has indicated that the bill will include aid for Gulf Coast hurricane recovery.  

Senate Majority Leader Harry Reid (D-NV) does not anticipate the full Senate considering the measure until late September.  

House Speaker Nancy Pelosi (D-CA) said she believes that a second stimulus bill may move in the House around the same time frame in which the full Senate might consider the supplemental. Key House Members are visiting the Gulf Coast this weekend to assess the remaining damage and recovery efforts.  

While not directly saying whether he would sign a second stimulus or supplemental into law, President Bush said, “We’re always open-minded to things…let’s see how this stimulus package works, and let us deal with the housing market with a good piece of housing legislation, and the energy issue with good energy legislation, and the trade issue with good trade legislation.” 

When passing an appropriations bill for FY09 last week, the Senate THUD Subcommittee included $39 million for the Disaster Housing Assistance Program (DHAP), although estimates are that the $39 million number represents a gross under-financing.  There are approximately 27,650 families enrolled in DHAP, and that number continues to grow.  

For a copy of the letter from the Katrina Housing Group to Senate appropriators, click here: www.nlihc.org/doc/second.supplemental.letter..pdf   

HAC NEWS

HOUSE SUBCOMMITTEE VOTES TO MAINTAIN MOST USDA HOUSING LEVELS. Most of the amounts approved by the House Agriculture Appropriations Subcommittee on June 19 (see HAC News, 7/2/08) have been obtained by the National Rural Housing Coalition. The Senate Appropriations Committee is scheduled to mark up its bill July 17. HAC will post updates at http://www.ruralhome.org/infoAnnouncements_2009appropsUSDA.php.

(a) Figures shown for FY 2007 are before 1% across-the-board cut.
(b) Rental Assistance contracts were for four years in FY 2006, for two years in FY 2007, and for one year in FY 2008. They will be for one year in FY 2009.
(c) The Sec. 514 and 516 Farm Labor Housing loans and grants are funded from a single account containing $21.54 million.
(d) Sec. 504 grants and Sec. 533 HPG are funded from one account (Rural Housing Assistance Grants) containing $43.5 million.
(e) $19.9 million would be appropriated for MPR and the bill would also rescind $10 million from past MPR appropriations.

SENATE COMMITTEE PASSES FY 2009 HUD SPENDING BILL. After a July 9 subcommittee mark-up, the full Appropriations Committee approved a bill on July 10. Most programs would receive increases above FY 2008 levels. HOME would get a $262 million boost. In the HUD rural housing program, a new $12 million initiative would provide funds for Native American economic development activities including housing. Most final 2009 appropriations decisions are almost certain to be postponed until after the November elections. For updates and links visit http://www.ruralhome.org/infoAnnouncements_2009appropsHUD.php.

(a) Figures shown for 2007 are before 1 percent across-the-board cut.
(b) Housing counseling moved to separate account.
(c) Includes an advance appropriation.
(d) Figures not yet released by House subcommittee.

SENATE SENDS HOUSING BILL BACK TO HOUSE. On July 11 the full Senate passed a version of H.R. 3221, renamed the Foreclosure Prevention Act. It differs in several ways from the House’s version, passed on May 8 (see HAC News, 5/21/08), including by providing $4 billion in CDBG funds for purchase and rehabilitation of foreclosed properties. Major news outlets report that aid for Fannie Mae and Freddie Mac is likely to be added to this bill.

HOUSE BILLS WOULD HELP SMALL PHAS, HOMELESS VETS. H.R. 6216 would exempt PHAs with under 500 units from asset management requirements. The Homes for Heroes Act, H.R. 3329, would authorize supportive housing and vouchers for veterans. Both bills passed the full House July 9 and are available at http://thomas.loc.gov.

DISASTER ASSISTANCE INFORMATION OFFERED.  • HUD’s Research and Resources for Flood Recovery Toolkit includes research reports, other publications, and links and is free at http://www.huduser.org/publications/destech/midwest_flood_recovery.html. Print copies are free for Midwest flood area residents from 1-800-245-2691, option 1.  • The Farmers’ Guide to Disaster Assistance is free from the Farmers’ Legal Action Group, http://www.flaginc.org.  • HAC’s guide to rural housing resources for disasters, Picking Up the Pieces,is free at http://www.ruralhome.org/infoReportsAlpha.php#disasterguide. Print copies are free for those in disaster areas and $5.00 for others from Luz Rosas, HAC, 202-842-8600, luz@ruralhome.org.