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Federal Housing News

February 23, 2015

NATIONAL HOUSING TRUST FUND

House Financial Services Committee Debates NHTF Again

On February 13, the House Financial Services Committee (HFSC) discussed the National Housing Trust Fund (NHTF) during is consideration of its “Views and Estimates” on President Barack Obama’s FY16 budget request. The “Views and Estimates,” a paper that spells out the Committee’s views on programs under its jurisdiction, criticized the NHTF for being similar to the Home Investment Partnerships (HOME), Community Development Block Grant (CDBG), and other HUD programs. “The Committee rejects the need to create a duplicative federal bureaucracy to administer essentially the same program that could be achieved with several of the existing 160 housing programs identified by the (Government Accountability Office),” the paper states.

Representative Daniel Kildee (D-MI) proposed an amendment to strike this language and replace it with a description of the differences between the NHTF, HOME and CDBG and of the NHTF’s unique role in addressing the affordable housing needs of extremely low income people. “HOME and CDBG tend to overlook the affordable housing needs of extremely low income households. The NHTF fills this important void in the government’s overall housing assistance strategy,” Representative Kildee stated.

Committee Chair Jeb Hensarling (R-TX) countered that “(the NHTF’s) true purpose may be to be another ACORN-like slush fund.” Committee Ranking Member Maxine Waters (D-CA) defended the NHTF and expressed her support for the amendment. “When you talk about creative and new ways to address the lack of rental units, this is one of them,” she said.  Ms. Waters called Mr. Hensarling’s characterization of the NHTF as another ACORN-like slush fund “unbelievable.”

The Committee voted to defeat Representative Kildee’s amendment on a party line vote of 32 to 22. The vote on “Views and Estimates” was also partisan (see article).

Access the “Views and Estimates,” as well as the mark-up materials, http://financialservices.house.gov/calendar/eventsingle.aspx?EventID=398673

 

SPECIAL SECTION—FEDERAL BUDGET

House Financial Services Committee Votes to Send “Views and Estimates” to Budget Committee

On February 12 and 13, the House Financial Services Committee considered its “Views and Estimates” on President Barack Obama’s FY16 budget request for programs under the Committee’s jurisdiction. The “Views and Estimates” are submitted to the House Budget Committee for its consideration in formulating the FY16 budget resolution.  Overall, the Committee’s “Views and Estimates” are critical of HUD programs, stating, “… the sheer number of these programs and the amount of taxpayer money expended on them have fallen short of meeting their goals of eliminating poverty and providing affordable housing.”

Housing and Insurance Subcommittee Ranking Member Emanuel Cleaver (D-MO) offered an amendment to include language in the “Views and Estimates” on “the tremendous need for rental and homelessness assistance.” He stated: “HUD’s Worst Cast Housing Needs: 2015 Report to Congress reports that in 2013, 7.7 million very low-income unassisted families paid more than half of their monthly income for rent, lived in severely substandard housing, or both.”  He went on to note that HUD’s January 2015 Point-in-Time Count revealed 578,424 people experiencing homelessness on any given night in the United States, and that 17.7% of the nation’s rural population lives in poverty.

“In the richest country in the world, it is unconscionable that there are millions of American families for whom safe and decent housing is neither affordable nor available,” Mr. Cleaver said. “And while the private sector has played a critical role in funding and preserving affordable rental housing across the country, the free market is not a panacea to solving our nation’s homeless and rental housing crises.”

Chair Hensarling objected to the Cleaver amendment. “Many of us believe,” Mr. Hensarling said, “that the government is not the panacea.” He also objected to language in the Cleaver amendment that supported efforts to “fully fund” federal rental and homeless assistance programs. 

Mr. Hensarling offered Mr. Cleaver the opportunity to revise his amendment by removing its language that “the free market is not a panacea” and that federal rental and homeless assistance program be fully funded.  Mr. Cleaver declined to revise his amendment, which ultimately failed on a party line vote of 23 to 32.

The Committee agreed, by voice vote, to an amendment offered by Representative Joyce Beatty (D-OH) supportive of the Housing Choice Voucher (HCV) program. The amendment adds language to the ”Views and Estimates” that “The Committee fully supports the HCV program, and looks forward to working with the Administration on strengthening the program.”

An earlier version of the amendment by Mrs. Beatty included “expanding” the voucher program, but Mr. Hensarling opposed the expansion language. “For millions, the Section 8 program is invaluable.  It’s critical to their lives. But HUD does not track or measure how these program funds are used,” Mr. Hensarling said. “How many lives are lifted from government dependency (by the voucher program)?” he asked.

The Committee voted to approve the “Views and Estimates” on a party line vote of 32 to 22.

Read all Views and Estimates materials: http://financialservices.house.gov/calendar/eventsingle.aspx?EventID=398673.

Read HUD’s Worst Case Housing Needs:  2015 Report to Congress, Executive Summary: http://www.huduser.org/portal/publications/affhsg/wc_HsgNeeds15.html.

 

Advocates Must Unite to End Sequestration

Actions are underway to end sequestration and prevent further cuts to non-defense discretionary programs, including HUD programs, in the FY16 federal budget.

On February 18, Non-Defense Discretionary (NDD) United sent a letter to Congress from 2,100 organizations, including more than 800 housing and community development organizations, urging Congress to replace sequestion and to avoid harming critical programs through additional budget cuts in FY16.  NLIHC represents housing, homeless, and community development organizations on the NDD United steering committee. 

Stopping the sequester cuts is one of the messages in a sign-on letter being circulated by the Strengthening America’s Value and Economy (SAVE) for All Campaign. SAVE for All is coordinated by the Coalition on Human Needs and NLIHC participates. The letter to members of the House and Senate will urge Congress to pass a budget resolution that adheres to SAVE for All’s four principles: (1) protect low income and vulnerable people, (2) invest in broadly shared prosperity that raises incomes across the economic spectrum, (3) increase revenues from fair sources, and (4) seek responsible savings by targeting wasteful spending in the Pentagon and elsewhere. Housing and homeless advocates are urged to join NLIHC in signing the letter by the March 12 deadline.

A new paper from the Center on Budget and Policy Priorities (CBPP), entitled Sequestration and Its Impact on Non-Defense Appropriations, succinctly describes how sequestration came to be and how more cuts would impact non-defense discretionary programs. According to CBPP, “the 2016 cap on non-defense appropriations is roughly at the 2015 enacted level for those appropriations, rising by just 0.2%.” Without a reversal of sequestration, as the President has proposed in his FY16 budget request, the “2016 cap would be 17% below the comparable 2010 level after adjusting for inflation,” the paper states.

Read the final NDD United letter to Congress, http://www.publichealthfunding.org/uploads/NDDUnited.SignOn.Feb2015.FINALwithSigs.pdf

Read and sign on to the SAVE for All letter, http://org.salsalabs.com/o/125/p/dia/action3/common/public/?action_KEY=17189

Read the CBPP paper on sequestration, http://www.cbpp.org/cms/index.cfm?fa=view&id=5272

 

House THUD Subcommittee to Hold Hearing on FY16 HUD Budget

The Transportation, Housing and Urban Development, and Related Agencies (THUD) Subcommittee of the House Appropriations Committee will hold a hearing on HUD’s FY16 budget request on February 25. HUD Secretary Julián Castro will be the hearing’s only witness. The hearing will take place at 1 p.m. in room 2358-A of the Rayburn House Office Building.

 

MORE CAPITOL HILL

Second Hearing on Federal Housing Administration in House Scheduled

The Housing and Insurance Subcommittee of the House Financial Services Committee will hold a hearing on “The Future of Housing in America: Oversight of the Federal Housing Administration (FHA) - Part II” on February 26. The full Committee held Part I of its hearing on FHA oversight on February 11 (see Memo, 2/17). Witnesses have not been announced. The hearing will take place at 10 a.m. in room 2220 of the Rayburn House Office Building.

 


HAC NEWS

FY16 FUNDING PROCESS BEGINS. On February 2 the Obama Administration released its budget request for FY16, which begins October 1, 2015. The total for discretionary programs exceeds the Budget Control Act’s caps. The next step will be congressional hearings. More details about the budget’s housing portions are on HAC’s website. HAC will present a rural housing budget webinar on February 6, which will be archived online for later listening.


RURAL HOUSING BUDGET REQUESTS MORE RENTAL FUNDING, LESS FOR SELF-HELP, AND MINIMUM RENT FOR TENANTS.
The budget would keep many of USDA’s rural housing programs at or near their FY15 levels, and would increase funds for some. Only $10 million is requested for Section 523 self-help; RD officials told HAC they expect to have enough carryover funds available to renew expiring contracts. Like last year’s budget, this one proposes some changes in the Rental Assistance program, including a $50 minimum rent. Some Section 515 funds would be available for new construction. Section 542 voucher funding would be more than doubled, and vouchers would be available for tenants of Section 515 properties leaving the program for any reason, not just foreclosure. 

USDA Rural Dev. Prog.
(dollars in millions)

FY13
Approp.a

FY14
Approp.

FY15 Admin. Bdgt.

FY15
Approp.

FY16 Admin. Bdgt.

502 Single Fam. Direct
Self-Help setaside

$900
5

$900
5

$360
0

$900
5

$900
0

502 Single Family Guar.

24,000

24,000

24,000

24,000

24,000

504 VLI Repair Loans

28

26.3

26.3

26.3

26.3

504 VLI Repair Grants

29.5

28.7

25

28.7

26

515 Rental Hsg. Direct Lns.

31.3

28.4

28.4

28.4

42.3

514 Farm Labor Hsg. Lns.

20.8

23.9

23.9

23.6

23.9

516 Farm Labor Hsg. Grts.

7.1

8.3

8.3

8.3

8.3

521 Rental Assistanceb

907.1

1,110

1,089

1,089

1,172

523 Self-Help TA

30

25

10

27.5

10

533 Hsg. Prsrv. Grants

3.6

3.5

0

3.5

0

538 Rental Hsg. Guar.

150

150

150

150

200

Rental Prsrv. Demo. (MPR)

17.8

20

20

17

19

542 Rural Hsg. Vouchers

10

12.6

8

7

15

Rural Cmnty. Dev’t Init.

6.1

6

0

4

4

a. Figures shown do not include 5% sequester or 2.5% across the board cut. b. The final FY13 appropriation for RA included a $3 million 514/516 setaside; the final appropriations for FY14 and FY15 have no setasides.


HUD PROPOSED BUDGET FOR 2016 BOOSTS FUNDING.
The budget proposes increases above 2015 appropriated levels in almost all HUD programs. CDBG would be cut, but it and many others are proposed at the same levels as in the President’s FY15 budget. The maximum CDBG setaside for Southwest border colonias would increase to 15% from the current 10%. No funds are requested for the Rural Innovation Fund or the Rural Housing and Economic Development program. For the third year in a row, the budget proposes to make SHOP a $10 million setaside within HOME. Also proposed is a new $300 million “Local Housing Policy Grants” program for localities “to support new policies, programs, or regulatory initiatives, such as design options, process changes, and land use regulations.”

HUD Program
(dollars in millions)

FY13
Approp.a

FY14
Approp.

FY15
Admin. Bdgt.

FY15
Approp.

FY16
Admin. Bdgt.

Cmty. Devel. Fund
CDBG

3,308
2,948

3,100
3,030

2,870
2,800

3,066
3,000

2,880
2,800

HOME 
SHOP setaside

1,000
b

1,000
b

950
10

900
b

1,060
10

Self-Help Homeownshp. (SHOP)

13.5

10

b

10

b

Tenant-Based Rental Assistance
VASH setaside

18,939.4
75

19,177.2
75

20,100
75

19,304
75

21,123
c

Project-Based Rental Asstnce.

9,339.7

9,516.6

9,346

9,330

10,360

Public Hsg. Capital Fund

1,886

1,875

1,925

1,875

1,970

Public Hsg. Operating Fund

4,262

4,400

4,600

4,440

4,600

Choice Neighbrhd. Initiative

120

90

120

80

250

Native Amer. Hsg. Block Grant

650

650

650

650

660

Homeless Assistance Grantsd

2,033

2,105

2,406.4

2,135

2,480

Hsg. Opps. for Persons w/ AIDS

334

330

332

330

332

202 Hsg. for Elderly

377

385.3

440

436

455

811 Hsg. for Disabled

165

126

160

135

177

Fair Housing

70.8

66

71

65.3

71

Healthy Homes & Lead Haz. Cntl.

120

110

120

110

120

Housing Counseling

45

45

60

47

60

Local Housing Policy Grants

-

-

-

-

300

a. Figures shown do not include 5% sequester. b. In FY13, FY14, and FY15 SHOP was funded under the Self-Help & Assisted Homeownership Opportunity Program account. Recent Obama budgets have proposed making the program a setaside in HOME. Congress has rejected that proposal. c. VASH vouchers for homeless veterans would be part of a new $177.5 million account of incremental rental vouchers for families, veterans, and tribal families experiencing homelessness and for victims of domestic violence. d. Includes the Rural Housing Stability Program, which is not yet operational.


HUD ISSUES HOUSING TRUST FUND INTERIM RULE.
HUD will request public comments on the interim rule after funding is available and states gain experience administering the HTF. Contact Marcia Sigal, HUD, 202-708-2684. HUD has also launched an HTF resource page and an email list. HTF funding is expected to be available from Fannie Mae and Freddie Mac (see HAC News, 12/22/14), although H.R. 574, introduced in Congress, would block those monies.


PROPERTY OWNERS MUST NOTIFY TENANTS BEFORE FINAL PAYMENT ON SECTION 515 OR 514 LOANS.
An Unnumbered Letter dated Jan. 16, 2015 provides a form letter for property owners, requiring them to notify tenants 12 months before a USDA loan will be paid off in the regular course of business. (It does not apply when a loan is prepaid.) The form letter lists provisions to be included in the letter to tenants. HAC recommended this action in a letter to USDA last August (see HAC News, 8/20/14). Contact Laura L. Horn, 386-328-5051, ext. 100.


GUIDANCE ISSUED TO HELP RD STAFF SET VOUCHER AMOUNTS.
Section 542 vouchers – for tenants in properties with prepaid or foreclosed Section 515 mortgages – are based on rents for modest apartments in the same market area. An Unnumbered Letter dated Jan. 16, 2015 explains how to calculate these comparable market rents. Contact Thomas Ale, USDA, 202-720-1620.


RD ANNOUNCES FY15 FUNDING POLICY FOR SEC. 523 SELF-HELP GRANTS.
A message sent to USDA RD’s single-family email list explains that grantees funded in FY14 at 90% of their request can request the remaining 10%. Existing grantees performing satisfactorily may renew at the same amount as their current grants. One new grantee will be selected in each region and new grantees can also replace grantees that have left the program. Contact an RD office.


CFPB HOPES TO FACILITATE SMALL CREDITOR AND RURAL LENDING.
Comments are due March 30 on a proposed rule that would expand the definitions of small creditors and rural places in the Consumer Financial Protection Bureau’s mortgage regulations. It would also make some time frames more flexible for small creditors and those serving rural or underserved places. Contact Amanda Quester, CFPB, 202-435-7700.


SUPPORTIVE SERVICES FOR VETERAN FAMILIES GRANTEES CAN APPLY FOR RENEWALS.
Nonprofits and consumer cooperatives with existing SSVF programs can apply by March 17 for grants to prevent veteran homelessness. Contact the VA’s SSVF staff, 877-737-0111, SSVF@va.gov.


FHFA PROPOSES MINIMUM FINANCIAL THRESHOLDS FOR NON-BANKS.
These new eligibility requirements include net worth, capital, and liquidity criteria for mortgage seller/servicers to do business with Fannie Mae and Freddie Mac. FHFA is accepting comments before finalizing the criteria in the second quarter of 2015, but has no specific deadline.

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