Federal Housing News
October 13, 2014
FHA Commissioner Carol Galante’s Last Day at HUD Will Be October 24
As previously reported, Federal Housing Administration (FHA) Commissioner and Assistant Secretary for Housing, Carol Galante planned to step down this fall (see Memo, 8/18). On October 10, Ms. Galante announced that her final day at HUD will be October 24.
In January, Ms. Galante will join the faculty at the University of California, Berkeley as the I. Donald Terner Distinguished Professorship in Affordable Housing and Urban Policy, the Director of the Berkeley Program in Housing and Urban Policy, and co-chair of the Fisher Center on Real Estate Policy Advisory Board.
Ms. Galante came to HUD in 2010 as Deputy Assistant Secretary for Multifamily Housing. She became acting FHA Commissioner and Assistant Secretary for Housing in June 2011, and was confirmed by the Senate in December 2012.
Prior to her appointment at HUD, Ms. Galante was President and Chief Executive of BRIDGE Housing Corporation, the largest nonprofit developer of affordable, mixed-income, and mixed-use developments in California. Before working at BRIDGE, she was the Executive Director of Eden Housing, Inc. in San Jose, California.
Biniam Gebre, currently the General Deputy Assistant Secretary for HUD’s Office of Housing, will serve as Acting Assistant Secretary and FHA Commissioner.
Ms. Galante’s announcement is in the October 10 issue of HUD Housing & FHA Monthly Review, http://nlihc.org/sites/default/files/HUD_Housing_and_FHA_Monthly_Review_1014.pdf
Proposed Rule to Implement Legislative Changes to Section 202 and Section 811 Programs
On October 7, HUD issued a proposed rule implementing legislative amendments to two programs, the Section 202 Supportive Housing for the Elderly program, and the Section 811 Supportive Housing for Persons with Disabilities program. The amendments were authorized by the Section 202 Supportive Housing for the Elderly Act of 2010, and the Frank Melville Supportive Housing Investment Act of 2010 (see Memo, 12/23/10).
The extensive, proposed rule would establish the requirements and procedures for:
· Using the new project rental assistance for supportive housing for persons with disabilities that provides funding to state housing finance agencies for rental assistance to extremely low income, non-elderly adults with disabilities. This new authority is separate from the existing project rental assistance that provides capital advances and contracts for project rental assistance.
· Implementing an enhanced project rental assistance contract (ePRAC), that would allow operating subsidies to pay debt service under specific circumstances not currently allowed. ePRACs would have 20-year terms for both the Section 202 and Section 811 programs; however, if a Section 811-assisted development also uses Low Income Housing Tax Credits, the ePRAC term would have to be 30 years.
· Allowing a set-aside for a number of units for elderly individuals with functional limitations in order to better align the Section 202 program with federal, state, and local health care initiatives that support very low income elderly individuals and provide for enhanced project rental assistance contracts. The exact percentage of the allowable set-aside would be determined through a Notice of Fund Availability.
· Implementing the new form of rental assistance called Senior Preservation Rental Assistance Contracts (SPRACs) to be provided in the refinancing of certain Section 202 projects where no debt service savings are anticipated and where unassisted residents would otherwise face potential rent increases.
· Modernizing the capital advance for supportive housing for persons with disabilities by authorizing the use of project rental assistance for emergency situations.
· Providing grants for applicants that do not have sufficient capital to prepare a housing site to compete for funding.
The proposed rule would also make significant changes for the prepayment of certain loans for supportive housing for the elderly. It would also add a new part 892 to establish regulations for the Service Coordinator in Multifamily Housing program. Section 811-assisted properties must make supportive services available to persons with disabilities, but these services do not have to be accepted.
Comments are due December 8, 2014.
The proposed rule is at http://www.gpo.gov/fdsys/pkg/FR-2014-10-07/pdf/2014-23276.pdf
See also, “Section 202 Supportive Housing for the Elderly,” page 145 of NLIHC’s 2014 Advocates’ Guide, http://nlihc.org/sites/default/files/2014AG-145.pdf
See also, “Section 811 Supportive Housing for Persons with Disabilities,” page 149 of NLIHC’s 2014 Advocates’ Guide, http://nlihc.org/sites/default/files/2014AG-149.pdf
HUD Paper Provides Overview of Children and Youth Homeless Definition
Because HUD regularly receives questions about how homeless youth qualify for its homeless assistance programs, HUD has created a three-page document providing an overview of its definition of homelessness and how that definition affects eligibility for emergency shelter and other resources.
A chart presents summaries of the four HUD categories of homelessness, which include: literal homelessness, imminent risk of homelessness, fleeing domestic violence, and homelessness defined under non-HUD statutes. Although only one of the categories mentions youth (homelessness defined under non-HUD statutes), the paper states that youth are eligible and much more likely to qualify for assistance under the other categories. Five hypothetical examples illustrate how youth might qualify under one of the four categories.
The document stresses that third party documentation of homelessness is not required in order for someone to be immediately admitted to an emergency shelter, to receive street outreach services, or to immediately receive shelter or services provided by a domestic violence victim service provider. HUD only expects self-certification.
The undated paper, “Children and Youth and HUD’s Homeless Definition” is at
FEDERAL HOME LOAN BANKS
Federal Home Loan Banks Report on Low Income Housing and Community Development Activities
On October 7, The Federal Housing Finance Agency (FHFA) released its annual report on the low income housing and community development activities of the twelve Federal Home Loan Banks (FHLBs). The FHLBs support these activities through the Affordable Housing Program (AHP), Community Investment Program (CIP), and Community Investment Cash Advance Program (CICA). In 2013, the banks distributed $322 million in AHP funds, assisting more than 37,000 low or moderate income households.
The Federal Home Loan Bank Act requires each FHLB to establish an AHP and contribute 10% of its net income from the previous year to the AHP. The minimum annual combined contribution by the twelve Banks must total $100 million. AHP must be used to purchase, construct, or rehabilitate housing. There are two AHP programs, the Competitive Application program that all FHLBs are required to offer, and the Homeownership Set-Aside Grant program, which a bank may choose to offer.
The Competitive Application program provides grants or reduced interest rate loans to a FHLB’s member financial institutions that apply on behalf of a housing sponsor. This program supports the development of rental and owner-occupied housing. The Homeownership Set-Aside program provides grants to a bank’s member financial institutions that in turn grant funds directly to households for downpayments, closing costs, counseling, or rehabilitation assistance. At least 20% of an AHP-assisted rental project’s units must be occupied and affordable for very low income (VLI) households, those with income at or below 50% of area median income (AMI). AHP-assisted homeowner units must be occupied by a household with income at or below 80% of AMI.
From 1990 to 2013, the FHLBs allocated more than $4.2 billion to AHP. The $322 million distributed in 2013 is a 57% increase over the previous year, and the 37,595 units assisted is a 40% increase from 2012. Approximately $254 million went toward the Competitive Application program, assisting 27,582 households, and $68 million went to the Homeownership Set-Aside program, helping 10,013 homeowners. The amounts varied from bank to bank, ranging from $7.8 million at the Seattle Bank to $60.2 million at the San Francisco Bank.
Since the beginning of the Competitive Application program in 1990, approximately 72% of the units assisted have been affordable to VLI households. In 2013, 74% of rental units and 53% of owner-occupied units served VLI households. Of these, 21% of the rental units and 5% of the owner-occupied units assisted extremely low income households, those with income at or below 30% of AMI. Furthermore, 59% of the projects supported in 2013 served people who were homeless or people with special needs. Approximately 31% of the projects reserved units for individuals with disabilities, 24% reserved units for homeless households, 19% reserved units for elderly households, and 15% reserved units for two or more special needs or homeless households.
Approximately 87% of the units subsidized through the Competitive Application program in 2013 were rentals, 7,700 more units than in 2012. The number of rental units assisted through this program has increased significantly since 2007, as the need for rental housing affordable to lower income households increased.
Since 1990, approximately 68% of the Competitive Application program funding has supported developments in urban areas. The trend is toward a greater distribution of supported properties in urban communities, with 78% of all assisted units in urban areas in 2013.
The AHP Competitive Application program is often used with other sources of funding, such as the Low Income Housing Tax Credit program (48%), the HOME Investment Partnerships program (34%), and the Community Development Block Grant program (11.5%).
The report also includes data on the AHP Homeownership Set-Aside Program, the Community Investment Program, and the Community Investment Cash Advance Program.
The 2013 Low-Income Housing and Community Development Activities of the Federal Home Loan Banks report is available at http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/2013LowIncHsgRptFinal100714.pdf
See also, “The Federal Home Loan Banks’ Affordable Housing Program and Community Investment Program,” page 231 of NLIHC’s 2014 Advocates’ Guide, http://nlihc.org/sites/default/files/2014AG-231.pdf
SEPT. 15-OCT. 15 IS NATIONAL HISPANIC HERITAGE MONTH. President Obama’s proclamation includes a call for comprehensive immigration reform.
CONGRESS TO PASS CONTINUING RESOLUTION FOR EARLY FY15. The House is expected to pass a CR on September 17 and the Senate soon after that. It will fund the federal government at FY14 levels until December 11. In a post-November-elections session Congress will have to complete work on FY 2015 appropriations or pass another CR.
VILSACK RESPONDS TO CONGRESSIONAL LETTER ABOUT 502 SPENDING. Responding to concerns about USDA’s ability to use all available Section 502 direct funds before FY14 ends September 30 (see HAC News, 8/6/14), USDA Secretary Tom Vilsack wrote to House and Senate Agriculture Appropriations Subcommittee leaders explaining steps being taken this year (see HAC News, 7/23/14) and planned for next year.
SENATE COMMITTEE ADVANCES MENSAH NOMINATION. The Senate Agriculture Committee held a hearing September 10 on the selection of Lisa Mensah as USDA Under Secretary for Rural Development (see HAC News, 5/14/14). A confirmation vote by the full Senate has not yet been scheduled.
RURAL POVERTY DECREASES, YET REMAINS HIGHER THAN U.S. POVERTY. The number of rural Americans living in poverty decreased last year, according to a new Census Bureau report. Overall, the official U.S. poverty rate was 14.5% in 2013, a decline from 15% in 2012. Income and Poverty in the United States: 2013 says there was no statistically significant change in either the number of people living in poverty or real median household income. State and local data will be released September 18. A HAC Rural Research Note provides more details.
HUD OFFERS ECONOMIC DEVELOPMENT FUNDS FOR APPALACHIA AND THE MISSISSIPPI DELTA. Both programs aim to increase access to capital for business lending and economic development, and applications are due November 3. For Appalachia, the only eligible applicants are state community and economic development agencies. For Delta funds, nonprofits and tribal governments are eligible. Contact Thann Young or Monica Wallace, HUD, 877-787-2526.
USDA POSTS AMENDED MAPS SHOWING FUTURE AREA ELIGIBILITY. Maps now available on RD’s website (under the Future Eligible Areas heading) eliminate “rural in character” changes (see HAC News, 9/3/14). A disclaimer indicates slight alterations may be made before the maps take effect on October 1.
REGULATORS SEEK COMMENTS ON PROPOSED REVISIONS TO CRA QUESTIONS AND ANSWERS. The Interagency Questions and Answers Regarding Community Reinvestment, revised periodically, supplement the Community Reinvestment Act regulations issued by the Federal Reserve board, the FDIC, and the Office of the Comptroller of the Currency. Comments are due November 10. Contact Bobbie Kennedy, OCC, 202-649-5470.
HUD REVISES MODEL STANDARDS FOR MANUFACTURED HOME GROUND ANCHORING. A final rule amends the Manufactured Home Model Installation Standards, establishing a uniform test method to determine and rate ground anchor performance in different soil classifications. Contact Pamela Beck Danner, HUD, 202-708-6423.
GAO REPORT SAYS HUD CAN DO MORE ON MANUFACTURED HOUSING. Manufactured Housing: Efforts Needed to Enhance Program Effectiveness and Ensure Funding Stability (GAO-14-410) recommendations related to the HUD Code updates, FHA insurance, and fees. Contact Matthew Scirè, GAO, 202-512-8678.
BROAD ACCESS TO MORTGAGE FINANCING RECOMMENDED TO HELP REDUCE INCOME INEQUALITY. Continued government provision of affordable housing and financing is among the recommendations of Responding to Rising Inequality: Policy Interventions to Ensure Opportunity for All, a brief published by the Haas Institute for a Fair and Inclusive Society at the University of California at Berkeley.
FARMWORKER HOUSING AND HEALTH CONFERENCE SET FOR NOVEMBER. “Farmworker Housing Quality and Health: A Transdisciplinary Conference” will be held November 11 in Arlington, VA. Registration is $50 until October 1.
WEBINAR TO COVER PROTECTING SENIORS AND OTHER RD TENANTS FROM DISPLACEMENT. The National Housing Law Project will offer a free webinar on October 21 at 2:00 pm Eastern time/11:00 am Pacific on “Prepayments, Maturing Mortgages, and Foreclosures: Protecting Seniors and Others from Rural Development Rental Housing Displacement.”