Policy News field

HAC Submits Community Reinvestment Act Comments

The Community Reinvestment Act is essential to communities across the nation. Through CRA, financial services have been made available to many places that might otherwise be overlooked. In spring 2022 the three federal agencies that regulate banks and other lenders – the Office of the Comptroller of the Currency, the Federal Reserve Board, and the Federal Deposit Insurance Corporation – jointly issued a proposed new CRA rule. This proposal, and the many efforts which will follow, are critically important to ensure not only that current CRA-related activities and investments continue but that they expand to reach populations and communities for which access to affordable finance is still elusive.

This is especially important in rural communities across the country as many are considered high credit need areas. CRA modernization will help incentivize more lending in these areas and increase community development activities. As rural communities continue to change, the CRA must adjust as well to reflect modern lending practices. The proposed rule has the potential to further increase lending in high need rural areas, but HAC has a number of recommendations to optimize CRA’s impact.

HAC believes a final rule could further increase CRA’s impact on underserved rural communities if it:

  1. includes activities in rural communities as an additional impact factor, informed by the most precise, density-based definitions already used by policymakers and the research community;
  2. ensures uniform treatment of all CDFIs and supports the most transformative CDFI activities in underserved rural communities;
  3. modifies the definition of affordable housing to enable housing providers to respond effectively to the unique income demographics and constraints on government capacity of rural communities;
  4. clarifies how consequential the impact factors can be for a bank’s community development test performance and overall rating; and
  5. prevents banks with a substantial number of rural assessment areas from “gaming” the NPR’s performance benchmarks under the retail lending test.

To learn more about HAC’s full recommendations, read our full comment letter.

Other comments submitted to OCC are posted online and can be reviewed here.

Policy News town

UPDATED to add USDA comments – HAC Concerned about Buy America Requirements

HAC Comments to USDA, July 2022

On July 29, the Housing Assistance Council (HAC) submitted comments to the U.S. Department of Agriculture (USDA), which proposed to establish waivers from Buy America requirements for purchases of de minimis, small grants, and minor components of infrastructure projects.

Key Takeaways

  • Housing and community facilities should not be considered public infrastructure under the Build America, Buy America Act.
  • If housing and community facilities are considered public infrastructure, it would be in the public interest to waive the Buy America preference for USDA’s programs to finance these construction projects so that scarce funds and staff resources can be devoted to addressing the current housing crisis.
  • Waivers for purchases of de minimis, small grants, and minor components of infrastructure projects would also be in the public interest.

HAC Comments to HUD, July 2022

HAC expressed concern about the impact of “Buy America” requirements on affordable housing in comments it submitted to the U.S. Department of Housing and Urban Development (HUD) on July 15, 2022.

Key Takeaways

  • Buy America preferences should not apply to assisted housing. HUD’s priority should be to address the affordable housing crisis. Furthermore, the law defines infrastructure as projects that benefit the general public, while assisted housing is available to only a subset of the general population.
  • HUD should not apply Buy America preferences to owner-occupied housing because the Office of Management and Budget has specifically stated that private homes are not considered to be infrastructure.
  • HUD should not apply Buy America preferences when HUD assistance is used for infrastructure that is built solely to support affordable housing, as is the case with the Self-Help Homeownership Opportunity Program (SHOP).
  • HUD should not apply Buy America preferences to housing that receives less than $250,000 in federal funding, to developments with fewer than eight units, or to situations when HUD funding covers only a small portion of the per unit development cost.
  • HUD should issue expedited waivers for materials that experience price spikes.
  • HUD should provide guidance to help reduce administrative burdens on entities that receive HUD funding.

Build America, Buy America

HUD, the U.S. Department of Agriculture (USDA), and other federal agencies are subject to a “Build America, Buy America” (BABA) requirement in the Infrastructure Investment and Jobs Act of 2021, which mandates that iron, steel, manufactured products, and construction materials used in infrastructure projects be American made. The provision applies to most federally funded infrastructure projects; it is not limited to projects funded through the 2021 Act.

Any preferences for American-made products that were in effect before the Infrastructure Act passed remain in place.

Federal agencies were required to publish initial lists showing which of their programs could be subject to the Buy America preference. The Office of Management and Budget issued guidance for federal agencies regarding compliance and set up a website to track agency requests for waivers.

HUD Implementation

On June 1, HUD requested public comment to help implement BABA for its programs. It asked questions such as what HUD-financed projects might fall under exemptions from the preference, how materials are currently sourced, and more. It also asked what HUD programs might be considered to fund infrastructure in addition to those on its initial list, which includes HOME, the Community Development Block Grant program, and SHOP.

The deadline for comments was later extended to July 15.

HUD has moved to waive the buy America requirement while the department works on implementing it. HUD announced it was providing two waivers, both effective on May 14 (the statutory deadline for implementation) unless it issued a later announcement changing the date. HUD’s general waiver is effective for six months. Its waiver for Tribal recipients of HUD funds lasts for one year.

USDA Implementation

USDA did not include any of its Rural Development agency’s housing or community facilities programs on its initial list of infrastructure programs, which focuses instead on utilities and broadband programs. In a recent request to OMB, however, RD did include housing and CF along with others on a list of programs it intends to evaluate under the new law.

USDA Rural Development, like HUD, hopes to delay the requirements’ effectiveness temporarily. It asked OMB to approve a waiver that would last six months after the date of approval.

Treasury Implementation

The Treasury Department’s list of programs that may be subject to BABA’s requirements does not include any Community Development Financial Institution Fund programs. It does include the Homeowner Assistance Fund, a program intended to help homeowners impacted by the coronavirus pandemic, and the Coronavirus State and Local Fiscal Recovery Funds programs, which help state, local, and Tribal governments and can be used for housing.

 

Policy News field

HAC’s Comments on Duty to Serve for Native American Communities

The FHFA requested comments on Fannie Mae and Freddie Mac’s Duty to Serve plans for Native American communities. Dave Castillo, CEO of Native Community Capital and a HAC Board Member, provided oral comments, accompanied by longer written comments, on behalf of HAC. Housing finance in Native American communities has been a stunning example of both racial and geographic inequity at both the policy and private market levels for decades. If implemented robustly, Duty to Serve has the potential to improve the lives of people living in the most underserved communities. HAC has several improvements that we think should be made to best serve Native communities’ need:

Key Takeaways

  • Allow GSE Equity Investments for Native CDFIs

    Equity investments would allow CDFIs serving Native communities to strengthen their capital structures, leverage additional debt capital, and, as a result, increase lending and investing in their communities.

  • Increase purchase goals for mortgages on Native lands

    Fannie Mae has no set goal and Freddie Mac’s is very modest. Increasing these would show the Enterprises’ commitments to Native housing and help Native communities house more people adequately.

  • Establish Native lending teams

    These teams would focus on Native communities and help ensure that these communities are treated equitably and with cultural competency.

  • Create Native-tailored mortgage products

    Tribal lands have unique property ownership structures and creating loan structures that can meet Native communities’ specific needs would help increase investments and economic growth.

  • Increase LIHTC investment in Native communities

    Despite how successful LIHTC has been in many communities, rural and Native communities have not been able to benefit equitably from these tax credits. The Duty to Serve plans have goals to invest in rural communities but adding goals for Native communities specifically would ensure that they are served as well.

Policy News from Congress

Over 300 Organizations Express Support for SHOP and RCB Programs

With the help of our network of organizations working across the country in rural areas, more than 300 organizations signed on to support increased funding for SHOP and the Rural Capacity Building (RCB) programs at HUD. HAC has helped almost 10,000 rural families achieve homeownership using the SHOP program, and has provided thousands of hours of customized technical assistance to more than 750 local organizations using the RCB program. Check out the letter below to learn more. Thanks to Habitat for Humanity, Community Frameworks, and Tierra del Sol for their partnership on this effort!

FY23 SHOP and RCB Organizational Sign-on Letter
Policy News from the Administration

HAC’s Recommendations to the CFPB on HMDA Rule Assessment

HAC submitted comments in response to the Consumer Financial Protection Bureau’s (CFPB) Request for Information regarding the Home Mortgage Disclosure Act (HMDA) Rule Assessment. HAC and our rural stakeholders have relied on HMDA data for decades to improve our understanding of rural mortgage markets. The CFPB will use these stakeholder comments to help better evaluate the effectiveness of these changes in meeting the purposes and objectives of Title X of the Dodd-Frank Act.

Key takeaways:

  • Reporting Threshold

    HAC strongly urges the CFPB to return to the 25-origination reporting threshold, for closed-end loans, as opposed to the new 100-origination threshold, in order to more accurately capture rural markets that are disproportionately served by small financial institutions.

  • Reliability Index

    HAC Recommends that the CFPB resource and publish a HMDA “Reliability Index.” While not a fix for overly limited reporting thresholds, the development of an indicator would be helpful for the CFPB, data users, and consumers.

  • Additional Data

    HAC applauds increased HMDA data reporting, but additional data and reporting are still needed. While the new housing data points – specifically those on manufactured housing – enhance the HMDA data usefulness, more data could improve an understanding of certain underserved markets. This is particularly true when it comes to tribal lands and specific loan programs.

  • Data Browser

    HAC applauds CFPB’s HMDA data browser, which offers improved access to HMDA data over previous interfaces.

Rory Doyle/ There is More Work to be Done

Historic Housing & Capacity Building Investments in Build Back Better Framework

Statement from HAC’s CEO

This is a moment housing advocates have been waiting for. Today, President Biden announced a Build Back Better framework that would make robust investments in affordable housing and capacity across the country. This historic investment would drive prosperity and equity for small towns and rural places.

Rural communities hold vast potential to drive economic growth and improve the quality of life for all Americans. Access to quality, affordable housing is key to jumpstarting that potential. Building and preserving homes creates jobs, improves education and health outcomes, and provides much-needed financial and physical stability to low-income families.

The framework includes a $150 billion investment in affordable housing nationwide, which would build more than a million new affordable homes, expand rental assistance, and help families afford down payments. It would also establish a new Rural Partnership Program, empowering rural communities (including Tribal Nations) with capacity building resources.

Everyone deserves a safe, decent, and affordable place to call home. The Build Back Better framework would bring our country much, much closer to achieving that vision.

 

David Lipsetz

CEO, Housing Assistance Council

 

Shawn Poynter/ There is More Work to be Done

UPDATE – 120 organizations sign on to Support rural housing and capacity building in the Build Back Better Act

Thank you! With your help 120 organizations signed on Congressional leadership yesterday in support of the robust rural housing and rural capacity building investments in the House bills for the Build Back Better Act. Nearly 120 organizations from across the country signed on to support these important investments.

Read the Letter

HAC Rural Housing Reconciliation Sign-On

 

Congress is currently working to negotiate the Build Back Better Act. Rural housing and capacity building programs are currently included in the bill and we want to make sure they continue to be top priorities. HAC is circulating a sign-on letter to Congressional leadership in support of maintaining rural housing and capacity building investments in the Build Back Better Act. You can view the text of the letter below. As a valued friend of HAC, we hope that you will add your organization’s name to this effort.

If you have any questions, please reach out to HAC’s Government Relations Manager, Samantha Booth, at samantha@ruralhome.org. The deadline to sign on is Tuesday, October 12. We appreciate your help.

 

BJ Kinds (center), construction manager with Delta Design Build Workshop, frames a house in Eastmoor on Sept. 2, 2020.Rory Doyle/ There is More Work to be Done

Transformational Rural Resources & Reconciliation

We are living through a momentous time. Trillions of dollars are flowing into communities to help address the impacts of the pandemic and position our nation to lead into the future. But, like water, federal funding often flows to the path of least resistance and historically this inertia has left behind rural areas, persistently poor counties, and communities of color. As Congress enters discussions on infrastructure, a focus on targeting these transformational resources to address long-existing patterns of rural poverty has never been more important.

There has been no lack of news coverage over the last year about Americans fleeing the big city for a quieter, more socially distanced small-town life. High-amenity rural communities across the country are seeing explosive growth that has led some to announce the beginning of a rural renaissance for American millennials. But this trend does not hold true for under-resourced rural places, which have often suffered under the weight of persistent poverty for decades.

Fortunately, Congress has recognized this need and infrastructure reconciliation conversations have included critical resources for rural affordable housing and community development. Many of these resources align with HAC’s 2021 Rural Housing Policy Priorities. Here are some highlights on these resources:

  • USDA Rural Housing Service Resources

    • A transformational investment in rural multifamily housing, including $4.36 billion for new construction, rehabilitation, and preservation of Section 515 rental housing and Section 514/516 farmworker housing, as well as $200 million for Section 521 Rental Assistance. With thousands of USDA multifamily units maturing and leaving the program each year and no funding for new construction in a decade, this investment could right the ship and preserve an estimated 38,720 units.
    • Additional support for rural affordable homeownership, including $70 million in budget authority for Section 502 direct homeownership loans (estimated to support loans totaling about $3.7 billion); $95 million for Section 504 repair grants; and $25 million for Section 523 self-help.
  • Rural Partnership Program (RPP)

    • The Rural Partnership Program (RPP) is a newly proposed program that is funded at nearly $4 billion and would provide flexible grants to support rural and tribal community development and capacity building. The proposed program has two parts: grants to support direct activities and projects, and grants to support the organizations responsible for providing technical assistance and capacity to administer the grants.
  • Other critical resources for rural housing

    • $25 million in additional funding for the Self-Help Homeownership Opportunity Program (SHOP) at HUD, which is a critical tool for rural affordable homeownership. HAC’s SHOP program has created nearly 10,000 homes in rural places across the country.
    • A $1 billion setaside of Community Development Block Grant (CDBG) funds for colonias on the U.S.-Mexico border. These generally unincorporated communities along the U.S.-Mexico border in California, Arizona, New Mexico, and Texas are characterized by high poverty rates and substandard living conditions, often lacking potable drinking water, water and wastewater systems, paved streets, and access to standard mortgage financing. This investment in colonias will allow these communities to develop the basic infrastructure they desperately need.

The new Administration has made geographic equity for rural places a priority, and we are hopeful that Congress will recognize the unique needs of rural areas and maintain these resources as the negotiations move forward. Rural communities are worthy of investment—and now is the time to make that investment in the future of rural America. If you would like to learn more about HAC’s policy priorities, click here.

Policy News from the Administration

HAC’s Statement on the End of the CDC’s Eviction Moratorium

The Housing Assistance Council (HAC) is concerned by the Supreme Court’s decision ending the national eviction moratorium. Without federal protection, hundreds of thousands of families now face the threat of eviction. Across America, many of these families will lose their homes.

“This pandemic and the unprecedented job loss it caused have exacerbated the housing challenges that rural communities have faced for a long time,” stated HAC CEO David Lipsetz. Millions of tenants, homeowners, and landlords across the country have fallen behind on rent and mortgage payments. Rural residents including Native Americans and farmworkers are among the Americans hardest hit by the pandemic and its housing impacts.

The end of the eviction moratorium is particularly troubling because housing loss poses serious dangers for renters’ health, as well as their finances. Eviction increases the risk of COVID-19 transmission and falls hardest on people of color, who are most likely to be evicted. Plus, renters with eviction records find it much harder to rent decent housing in the future since landlords often screen applicants with prior evictions.

Assistance to help cover rent, utilities, mortgages, and other costs is available from the federal government, states, and county or city governments. HAC has compiled links to resources for tenants, homeowners, and landlords on our website: ruralhome.org.

HAC works to ensure that everyone has a safe, decent, and affordable place to call home. We will continue to serve rural communities with dedication and compassion, just as we have for the last 50 years.

Policy News from the Administration

HAC Agrees with HUD Fair Housing Rule

HAC has submitted a comment letter supporting HUD’s proposed cancellation of a fair housing regulation issued by the Trump administration in September 2020. This rule governs fair housing violation claims based on policies or actions with “disparate impacts” on categories of people protected by the Fair Housing Act.

The 2020 HUD rule, which would have made it more difficult to prove a disparate impact claim, never went into effect. A federal judge issued an injunction that left a 2013 disparate impact regulation in place while a lawsuit against the 2020 version was underway.

In June 2021, HUD proposed to reinstate the 2013 rule. HAC – along with thousands of others – supports that action.

As HAC’s comments pointed out:

Fair access to housing is essential. Research shows that decent, affordable housing improves residents’ physical and mental health, their ability to hold jobs, their children’s performance in school. Children’s life chances are deeply impacted by the neighborhoods where they grow up. Enforcing the Fair Housing Act against discrimination, both intended and incidental, helps our nation move towards inclusive and equitable rural, urban and suburban communities, where all residents can thrive.