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HAC News: February 18, 2015

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HAC News Formats. pdf

February 18, 2015
Vol. 44, No. 4

• February is National African American History Month • USDA offers Household Water Well System grants • HUD-VASH vouchers will expand to Native American communities • Regulators request input on CRA and other banking rules • HUD announces Annual Adjustment Factors • USDA RD revamps website • Worst case housing needs drop • Changes in housing and other policies could reduce child poverty by 60% nationwide • HUD reports on ways housing matters to children • Affordable housing can improve educational outcomes • Sequestration and its impacts described • Economic recovery is bypassing millions of Americans, CFED reports • Regulatory costs may drive small bank mergers

HAC News Formats. pdf

February 18, 2015
Vol. 44, No. 4

FEBRUARY IS NATIONAL AFRICAN AMERICAN HISTORY MONTH. President Obama’s proclamation is online.

USDA OFFERS HOUSEHOLD WATER WELL SYSTEM GRANTS. Nonprofits can apply by April 13 for grants to establish lending programs enabling homeowners to borrow up to $11,000 to construct or repair household water wells for existing homes. Contact Joyce M. Taylor, RUS, 202-720-9589.

HUD-VASH VOUCHERS WILL EXPAND TO NATIVE AMERICAN COMMUNITIES. HUD has announced it will dedicate $4 million to make vouchers for about 650 homeless veterans available in Native communities for the first time. Comments on program design are due February 25 to tribalhudvashcomments@hud.gov. Contact HUD’s Office of Native American Programs.

REGULATORS REQUEST INPUT ON CRA AND OTHER BANKING RULES. Comments are due May 14. The Federal Reserve, FDIC, and Comptroller of the Currency pose questions about ways to reduce regulatory burden, particularly on community banks and small lenders.

HUD ANNOUNCES ANNUAL ADJUSTMENT FACTORS. The FY15 AAFs will be used to adjust Section 8 rents on contract anniversaries. Contact Becky Primeaux, HUD, 202-708-1380.

USDA RD REVAMPS WEBSITE. The new site, https://www.rd.usda.gov, moves regulations, handbooks, and other guidance documents to https://www.rd.usda.gov/publications/regulations-guidelines.

WORST CASE HOUSING NEEDS DROP. From 2011 to 2013 the number of worst case needs – very low-income renter households who do not receive government housing assistance and who pay more than one-half of their income for rent, live in severely inadequate conditions, or both – fell from 8.5 million to 7.7 million. Increases in renter incomes and limited increases in rents are probably responsible, according to the executive summary of HUD’s annual worst case needs report. In 2013 there were still 1.6 very low-income households with worst case needs for every very low-income household that received rental assistance, HUD says. The full report will be released this spring.

CHANGES IN HOUSING AND OTHER POLICIES COULD REDUCE CHILD POVERTY BY 60% NATIONWIDE. Child poverty in nonmetro places could be cut by 68.2%, according to Reducing Child Poverty in the U.S., prepared by the Urban Institute for the Children’s Defense Fund. The report examines the poverty reduction impact of nine policies, ranging from expanding the Earned Income Tax Credit to increasing SNAP benefits. Expanding the availability of housing vouchers would reduce child poverty by 21.3% in metro areas and 16.4% in nonmetro places. The report, a summary of recommendations, and a blog post are available online.

HUD REPORTS ON WAYS HOUSING MATTERS TO CHILDREN. An issue of HUD’s Evidence Matters newsletter focuses on how housing matters for children’s physical and emotional health, achievement in school, and economic opportunity. A HAC Rural Research Note summarizes some of the research’s implications for rural children.

AFFORDABLE HOUSING CAN IMPROVE EDUCATIONAL OUTCOMES. An updated literature review by the National Housing Conference’s Center for Housing Policy presents key findings from research showing that stable, affordable housing may foster educational success by supporting family financial stability, reducing mobility, providing safe, nurturing living environments, and providing a platform for community development.

SEQUESTRATION AND ITS IMPACTS DESCRIBED. The government spending reductions required by the 2011 Budget Control Act are now achieved through spending caps, not across-the-board cuts as in FY13. A new paper by the Center on Budget and Policy Priorities describes the mechanisms established in the law, how policymakers subsequently modified them, and the resulting effects on non-defense appropriations. It notes that under the BCA “in inflation-adjusted terms, the 2016 cap would be 17 percent below the 2010 level.”

ECONOMIC RECOVERY IS BYPASSING MILLIONS OF AMERICANS, CFED REPORTS. Excluded from the Financial Mainstream presents the main findings from CFED’s 2015 Assets and Opportunity Scorecard, which evaluates 135 different policy and outcome measures in five categories including housing. Infographics and interactive maps are also available online.

REGULATORY COSTS MAY DRIVE SMALL BANK MERGERS. The State and Fate of Community Banking, a Harvard Kennedy School working paper, reports that community banks play a major role in rural areas and in agriculture, small business, and residential mortgage lending. Since 2010 the total share of bank assets held by community banks, especially small ones, has fallen significantly, and the report concludes the increased costs of regulation under the Dodd-Frank Act are a likely cause.

HAC News: February 4, 2015

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HAC News Formats. pdf

February 4, 2015
Vol. 44, No. 3

• FY16 funding process begins • Rural housing budget requests more rental funding, less for self-help, and minimum rent for tenants • HUD proposed budget for 2016 boosts funding • HUD issues Housing Trust Fund interim rule • Property owners must notify tenants before final payment on Section 515 or 514 loans • Guidance issued to help RD staff set voucher amounts • RD announces FY15 funding policy for Sec. 523 self-help grants • CFPB hopes to facilitate small creditor and rural lending • Supportive Services for Veteran Families grantees can apply for renewals • FHFA proposes minimum financial thresholds for non-banks

[tdborder][/tdborder]HAC News Formats. pdf

February 4, 2015
Vol. 44, No. 3

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.

Lisa Mensah Sworn in as USDA Under Secretary

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UPDATE: Lisa Mensah was sworn in on December 5, 2014.

On November 20, 2014 the Senate confirmed Lisa Mensah as Under Secretary of Agriculture for Rural Development. Mensah has served as Executive Director of the Aspen Institute’s Initiative on Financial Security.

Discussion Topics, HAC National Rural Housing Conference 2014

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Conversation is one of the best things about HAC’s Rural Housing Conference. Every two years the Conference offers a unique opportunity for discussion among hundreds of rural housers from across the U.S. who are not often in the same place at the same time. Many exchanges are informal, during meals or in the halls between workshops. Others are more structured, and in 2014 HAC will provide an opportunity for facilitated discussions on six topics. HAC asked expert rural housing practitioners to write two-page papers on each of these subjects. On the second day of the conference, attendees will choose among these topics and participate in discussions during a working lunch. Each discussion group will report its thoughts and recommendations to the conference as a whole.

PDF containing all six papers

You do not need to attend the conference to contribute your thoughts! The discussions are beginning now on LinkedIn.

A fund to invest more in rural infrastructure

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The Department of Agriculture is partnering with the private sector to launch a new investment fund stocked with $10 billion to go toward rural infrastructure development.

USDA Multi-Family Fair Housing Occupancy Report FY 2013

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USDA’s yearly occupancy survey shows the total number of properties in USDA’s rural rental portfolio fell by 2.48% from April 2012 to September 2013, a decrease of 346 Section 515 properties and 34 Section 514 properties. The reduction covers 5,092 apartments (1.14% of total units). The 2013 report is the first to include demographic data on Section 521 Rental Assistance (RA) households, and they appear generally similar to tenants in Section 515 properties. The average annual income of Section 515 residents has increased slightly to $11,747. For Section 515 tenants with RA, average income is $9,828.

HAC News: January 22, 2014

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HAC News Formats. pdf

January 22, 2014
Vol. 43, No. 2

• Spending set for 2014 • Rural Housing Cuts Avoided • HUD programs have some cuts, some increases • Congress changes HUD’s definition of “extremely low-income” • First Promise Zones include two rural areas • HUD suggests owners warn tenants before mortgages mature • Poverty guidelines updated • Study examines high poverty neighborhoods • HAC reports on USDA housing programs in FY13

January 22, 2014
Vol. 43, No. 2

SPENDING SET FOR 2014. Both the House and Senate have passed, and President Obama has signed, the FY14 omnibus spending package, the first full federal appropriations law enacted in over a decade. Next year’s funding discussions will begin soon, though reports are that the President’s proposed FY15 budget may be late, coming out in March rather than early February.

RURAL HOUSING CUTS AVOIDED. USDA rural housing programs did not suffer the cuts originally proposed by the Obama budget. Section 502 direct loans received $900 million, Section 521 rental assistance got $1.11 billion, and Section 515 rental loans, $28 million. The bill also directs that communities currently eligible for USDA rural housing assistance will remain so through the end of the fiscal year. In addition, it expands the Section 502 packaging demonstration, directing USDA to contract with five intermediaries. [tdborder][/tdborder]

USDA Rural Devel. Prog.
(dollars in millions)

FY13
Finala

FY14
Admin. Budget

FY14
House Bill
H.R. 2410

FY14
Senate Bill
S. 1244

FY14
Final
H.R. 3547

502 Single Fam. Direct
(Self-Help Setaside)
(Teacher Setaside)

$900
(5)
0

$360
0
0

$820.2
0
0

$900
(5)
0

$900
(5)
0

502 Single Family Guar.

24,000

24,000

24,000

24,000

24,000

504 VLI Repair Loans

28

26.3

25.4

26.3

26.3

504 VLI Repair Grants

29.5

25

18.6

28.7

28.7

515 Rental Hsg. Direct Loans

31.3

28.4

28.4

28.4

28.4

514 Farm Labor Hsg. Loans

20.8

23.5

23.9

23.9

23.9

516 Farm Labor Hsg. Grants

7.1

14

8.2

8.3

8.3

521 Rental Assistance
(Preservation RA)
(New Cnstr. 515 RA)
(New Cnstr. 514/516 RA)

907.1
0
0
(3)

1,015
0
0
(3)

1,012
0
0
0

1,015
0
0
0

1,110
0
0
0

523 Self-Help TA

30

10

17.1

25

25

533 Hsg. Prsrv. Grants

3.6

0

0

3.5

3.5

538 Rental Hsg. Guar.

150

150

150

150

150

Rental Prsrv. Demo. (MPR)

17.8

20

17.3

20

20

Rental Prsrv. Revlg. Lns.

0

0

0

0

0

542 Rural Hsg. Vouchers

10

12.6

9.7

12.6

12.6

Rural Cmnty. Dev’t Init.

6.1

0

6

6

6

a. Figures shown do not include 5% sequester or 2.5% across the board cut.

HUD PROGRAMS HAVE SOME CUTS, SOME INCREASES. HUD’s programs received a mix of level funding, reductions, and increases for FY14. HOME is at $1 billion, the same as in 2013, and CDBG is increased slightly. Other programs with increases include tenant- and project-based rental assistance, homeless assistance, public housing operating, and Section 202 elderly housing. In addition to HOME, programs with level funding include Native American housing and housing counseling. Cuts are made to public housing capital, fair housing, AIDS housing, Section 811 for the disabled, SHOP, and healthy homes.

HUD Program
(dollars in millions)

FY13
Finala

FY14
Admin. Budget

FY14
House Bill

FY14
Senate Bill
S. 1243

FY14
Final
H.R. 3547

Cmty. Devel. Fund
CDBG
Sustainable Commun. Init.
Rural Innovation Fund

3,308
2,948
0
0

3,143
2,798
0
0

1,697
1,637
0
0

3,295
3,150
75
0

3,100
3,030
0
0

HOME

1,000

950

700

1,000

1,000

Tenant-Based Rental Asstnce.
(Vets. Affairs Spptve. Hsg. Vchrs.)

18,939.4
(75)

19,989.2
(75)

18,610.6
(75)

19,592.2
(78)

19,177.2
(75)

Project-Based Rental Asstnce.

9,339.7

9,872

9,450.7

10,772

9,516.6

Public Hsg. Capital Fund

1,886

2,000

1,500

2,000

1,875

Public Hsg. Operating Fund

4,262

4,600

4,262

4,600

4,400

Choice Neighbrhd. Initiative

120

400

0

250

90

Housing Trust Fund

c

1,000

c

c

c

Native Amer. Hsg. Block Grant

650

650

600

675

650

Homeless Assistance Grants

2,033

2,381

2,088

2,261

2,105

Rural Hsg. Stability Prog.

b

5

b

b

b

Hsg. Opps. for Persons w/ AIDS

334

332

300

332

330

202 Hsg. for Elderly

377

400

375

400

385.3

811 Hsg. for Disabled

165

126

126

126

126

Fair Housing

70.8

71

55.8

70

66

Healthy Homes & Lead Haz. Cntl.

120

120

50

120

110

Self-Help Homeownshp. (SHOP)

13.5

10

10

13.5

10

Housing Counseling

45

55

35

55

45

a. Figures shown do not include 5% sequester. b. Funded under Homeless Assistance Grants. c. National Housing Trust Fund is “mandatory” funding, not discretionary, so does not need to be funded through appropriations legislation, although the Admin-istration did include it in its budget request.

CONGRESS CHANGES HUD’S DEFINITION OF “EXTREMELY LOW-INCOME.” The FY14 omnibus spending law makes several policy changes in HUD programs, including one that will help residents of poor rural areas to qualify. For the Housing Choice Voucher, public housing, and Section 8 Project-based Rental Assistance programs, “extremely low-income” is defined as the higher of 30% of area median income (the current standard) or the federal poverty level. The statute directs HUD to put this change into effect quickly.

FIRST PROMISE ZONES INCLUDE TWO RURAL AREAS. On January 9 President Obama announced the first five places to win “Promise Zone” designations, giving them preference for a variety of federal programs. The rural grantees are the Choctaw Nation of Oklahoma and a group of counties in southeast Kentucky served by Kentucky Highlands Investment Corporation. The cities of Los Angeles, Philadelphia, and San Antonio were also selected.

HUD SUGGESTS OWNERS WARN TENANTS BEFORE MORTGAGES MATURE. A HUD letter encourages owners of HUD-subsidized Section 236 rental properties to notify tenants months before their mortgages mature, at which time owners are usually allowed to convert to market rate rents. HUD offers preservation resources to owners. Contact HUD, 236preservation@hud.gov.

POVERTY GUIDELINES UPDATED. The Department of Health and Human Services has issued its annual poverty guidelines, adjusted based on the Consumer Price Index. Contact Kendall Swenson, HHS, 202-690-7507.

STUDY EXAMINES HIGH POVERTY NEIGHBORHOODS. Concentration of Poverty in the New Millennium, published by The Century Foundation and the Rutgers Center for Urban Research and Education, finds that the number of high-poverty census tracts decreased from 1990 to 2000 but increased again from 2000 to 2010 and is now greater than ever. The largest increase in number of these tracts was in micropolitan areas (10,000-50,000 population). The report also has data by race/ethnicity, region, and state, and brief discussion of the problems known to be caused by concentrations of poverty.

HAC REPORTS ON USDA HOUSING PROGRAMS IN FY13. HAC’s annual review of USDA Rural Development’s performance summarizes USDA obligation data by program area and by state. In addition, the report includes historic activity for selected rural housing programs.

SECTION 502 TRAINING FROM HAC. Join the Housing Assistance Council on March 25-27, 2014 in Memphis, TN for the Section 502 Packaging Training for Nonprofit Developers, a valuable training for any organization that packages or intends to package USDA Rural Development Section 502 Loans.

USDA Multi-Family Fair Housing Occupancy Report FY 2012

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USDA’s annual occupancy survey shows 2,135 fewer units and 1,254 fewer occupied units (households) in Section 515 and 514/516 properties in 2012 than 2011. There are 1,243 more households receiving Section 521 Rental Assistance and 931 fewer with rental aid from other sources. The number of cost burdened households dropped by 1,562.

Moises Loza Speaks at Florida Home Partnership Playground Build Event

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The Florida Home Partnership (FHP), in celebration of National Homeownership Month, gathered over 100 volunteers to help build a playground for its Bayou Pass Village Phase III development. Tammye Treviño, Administrator for USDA’s Housing and Community Facilities Program and HAC’s Executive Director Moises Loza participated in this event.

Video from FHP

[youtube]jfpOBFAdo2c[/youtube]

FHP’s photo album for the event

USDA Multi-Family Fair Housing Occupancy Report FY 2011

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USDA’s annual occupancy report for Section 515 and 514/516 rentals states that from April 2010 to May 2011 the total number of Section 515 properties dropped by 270 (about 3,600 apartments) and the number of farmworker properties increased by six.

Reports

HAC News: February 18, 2015

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HAC News Formats. pdf

February 18, 2015
Vol. 44, No. 4

• February is National African American History Month • USDA offers Household Water Well System grants • HUD-VASH vouchers will expand to Native American communities • Regulators request input on CRA and other banking rules • HUD announces Annual Adjustment Factors • USDA RD revamps website • Worst case housing needs drop • Changes in housing and other policies could reduce child poverty by 60% nationwide • HUD reports on ways housing matters to children • Affordable housing can improve educational outcomes • Sequestration and its impacts described • Economic recovery is bypassing millions of Americans, CFED reports • Regulatory costs may drive small bank mergers

HAC News Formats. pdf

February 18, 2015
Vol. 44, No. 4

FEBRUARY IS NATIONAL AFRICAN AMERICAN HISTORY MONTH. President Obama’s proclamation is online.

USDA OFFERS HOUSEHOLD WATER WELL SYSTEM GRANTS. Nonprofits can apply by April 13 for grants to establish lending programs enabling homeowners to borrow up to $11,000 to construct or repair household water wells for existing homes. Contact Joyce M. Taylor, RUS, 202-720-9589.

HUD-VASH VOUCHERS WILL EXPAND TO NATIVE AMERICAN COMMUNITIES. HUD has announced it will dedicate $4 million to make vouchers for about 650 homeless veterans available in Native communities for the first time. Comments on program design are due February 25 to tribalhudvashcomments@hud.gov. Contact HUD’s Office of Native American Programs.

REGULATORS REQUEST INPUT ON CRA AND OTHER BANKING RULES. Comments are due May 14. The Federal Reserve, FDIC, and Comptroller of the Currency pose questions about ways to reduce regulatory burden, particularly on community banks and small lenders.

HUD ANNOUNCES ANNUAL ADJUSTMENT FACTORS. The FY15 AAFs will be used to adjust Section 8 rents on contract anniversaries. Contact Becky Primeaux, HUD, 202-708-1380.

USDA RD REVAMPS WEBSITE. The new site, https://www.rd.usda.gov, moves regulations, handbooks, and other guidance documents to https://www.rd.usda.gov/publications/regulations-guidelines.

WORST CASE HOUSING NEEDS DROP. From 2011 to 2013 the number of worst case needs – very low-income renter households who do not receive government housing assistance and who pay more than one-half of their income for rent, live in severely inadequate conditions, or both – fell from 8.5 million to 7.7 million. Increases in renter incomes and limited increases in rents are probably responsible, according to the executive summary of HUD’s annual worst case needs report. In 2013 there were still 1.6 very low-income households with worst case needs for every very low-income household that received rental assistance, HUD says. The full report will be released this spring.

CHANGES IN HOUSING AND OTHER POLICIES COULD REDUCE CHILD POVERTY BY 60% NATIONWIDE. Child poverty in nonmetro places could be cut by 68.2%, according to Reducing Child Poverty in the U.S., prepared by the Urban Institute for the Children’s Defense Fund. The report examines the poverty reduction impact of nine policies, ranging from expanding the Earned Income Tax Credit to increasing SNAP benefits. Expanding the availability of housing vouchers would reduce child poverty by 21.3% in metro areas and 16.4% in nonmetro places. The report, a summary of recommendations, and a blog post are available online.

HUD REPORTS ON WAYS HOUSING MATTERS TO CHILDREN. An issue of HUD’s Evidence Matters newsletter focuses on how housing matters for children’s physical and emotional health, achievement in school, and economic opportunity. A HAC Rural Research Note summarizes some of the research’s implications for rural children.

AFFORDABLE HOUSING CAN IMPROVE EDUCATIONAL OUTCOMES. An updated literature review by the National Housing Conference’s Center for Housing Policy presents key findings from research showing that stable, affordable housing may foster educational success by supporting family financial stability, reducing mobility, providing safe, nurturing living environments, and providing a platform for community development.

SEQUESTRATION AND ITS IMPACTS DESCRIBED. The government spending reductions required by the 2011 Budget Control Act are now achieved through spending caps, not across-the-board cuts as in FY13. A new paper by the Center on Budget and Policy Priorities describes the mechanisms established in the law, how policymakers subsequently modified them, and the resulting effects on non-defense appropriations. It notes that under the BCA “in inflation-adjusted terms, the 2016 cap would be 17 percent below the 2010 level.”

ECONOMIC RECOVERY IS BYPASSING MILLIONS OF AMERICANS, CFED REPORTS. Excluded from the Financial Mainstream presents the main findings from CFED’s 2015 Assets and Opportunity Scorecard, which evaluates 135 different policy and outcome measures in five categories including housing. Infographics and interactive maps are also available online.

REGULATORY COSTS MAY DRIVE SMALL BANK MERGERS. The State and Fate of Community Banking, a Harvard Kennedy School working paper, reports that community banks play a major role in rural areas and in agriculture, small business, and residential mortgage lending. Since 2010 the total share of bank assets held by community banks, especially small ones, has fallen significantly, and the report concludes the increased costs of regulation under the Dodd-Frank Act are a likely cause.

HAC News: February 4, 2015

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HAC News Formats. pdf

February 4, 2015
Vol. 44, No. 3

• FY16 funding process begins • Rural housing budget requests more rental funding, less for self-help, and minimum rent for tenants • HUD proposed budget for 2016 boosts funding • HUD issues Housing Trust Fund interim rule • Property owners must notify tenants before final payment on Section 515 or 514 loans • Guidance issued to help RD staff set voucher amounts • RD announces FY15 funding policy for Sec. 523 self-help grants • CFPB hopes to facilitate small creditor and rural lending • Supportive Services for Veteran Families grantees can apply for renewals • FHFA proposes minimum financial thresholds for non-banks

[tdborder][/tdborder]HAC News Formats. pdf

February 4, 2015
Vol. 44, No. 3

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.

Lisa Mensah Sworn in as USDA Under Secretary

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UPDATE: Lisa Mensah was sworn in on December 5, 2014.

On November 20, 2014 the Senate confirmed Lisa Mensah as Under Secretary of Agriculture for Rural Development. Mensah has served as Executive Director of the Aspen Institute’s Initiative on Financial Security.

Discussion Topics, HAC National Rural Housing Conference 2014

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Conversation is one of the best things about HAC’s Rural Housing Conference. Every two years the Conference offers a unique opportunity for discussion among hundreds of rural housers from across the U.S. who are not often in the same place at the same time. Many exchanges are informal, during meals or in the halls between workshops. Others are more structured, and in 2014 HAC will provide an opportunity for facilitated discussions on six topics. HAC asked expert rural housing practitioners to write two-page papers on each of these subjects. On the second day of the conference, attendees will choose among these topics and participate in discussions during a working lunch. Each discussion group will report its thoughts and recommendations to the conference as a whole.

PDF containing all six papers

You do not need to attend the conference to contribute your thoughts! The discussions are beginning now on LinkedIn.

A fund to invest more in rural infrastructure

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The Department of Agriculture is partnering with the private sector to launch a new investment fund stocked with $10 billion to go toward rural infrastructure development.

USDA Multi-Family Fair Housing Occupancy Report FY 2013

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USDA’s yearly occupancy survey shows the total number of properties in USDA’s rural rental portfolio fell by 2.48% from April 2012 to September 2013, a decrease of 346 Section 515 properties and 34 Section 514 properties. The reduction covers 5,092 apartments (1.14% of total units). The 2013 report is the first to include demographic data on Section 521 Rental Assistance (RA) households, and they appear generally similar to tenants in Section 515 properties. The average annual income of Section 515 residents has increased slightly to $11,747. For Section 515 tenants with RA, average income is $9,828.

HAC News: January 22, 2014

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HAC News Formats. pdf

January 22, 2014
Vol. 43, No. 2

• Spending set for 2014 • Rural Housing Cuts Avoided • HUD programs have some cuts, some increases • Congress changes HUD’s definition of “extremely low-income” • First Promise Zones include two rural areas • HUD suggests owners warn tenants before mortgages mature • Poverty guidelines updated • Study examines high poverty neighborhoods • HAC reports on USDA housing programs in FY13

January 22, 2014
Vol. 43, No. 2

SPENDING SET FOR 2014. Both the House and Senate have passed, and President Obama has signed, the FY14 omnibus spending package, the first full federal appropriations law enacted in over a decade. Next year’s funding discussions will begin soon, though reports are that the President’s proposed FY15 budget may be late, coming out in March rather than early February.

RURAL HOUSING CUTS AVOIDED. USDA rural housing programs did not suffer the cuts originally proposed by the Obama budget. Section 502 direct loans received $900 million, Section 521 rental assistance got $1.11 billion, and Section 515 rental loans, $28 million. The bill also directs that communities currently eligible for USDA rural housing assistance will remain so through the end of the fiscal year. In addition, it expands the Section 502 packaging demonstration, directing USDA to contract with five intermediaries. [tdborder][/tdborder]

USDA Rural Devel. Prog.
(dollars in millions)

FY13
Finala

FY14
Admin. Budget

FY14
House Bill
H.R. 2410

FY14
Senate Bill
S. 1244

FY14
Final
H.R. 3547

502 Single Fam. Direct
(Self-Help Setaside)
(Teacher Setaside)

$900
(5)
0

$360
0
0

$820.2
0
0

$900
(5)
0

$900
(5)
0

502 Single Family Guar.

24,000

24,000

24,000

24,000

24,000

504 VLI Repair Loans

28

26.3

25.4

26.3

26.3

504 VLI Repair Grants

29.5

25

18.6

28.7

28.7

515 Rental Hsg. Direct Loans

31.3

28.4

28.4

28.4

28.4

514 Farm Labor Hsg. Loans

20.8

23.5

23.9

23.9

23.9

516 Farm Labor Hsg. Grants

7.1

14

8.2

8.3

8.3

521 Rental Assistance
(Preservation RA)
(New Cnstr. 515 RA)
(New Cnstr. 514/516 RA)

907.1
0
0
(3)

1,015
0
0
(3)

1,012
0
0
0

1,015
0
0
0

1,110
0
0
0

523 Self-Help TA

30

10

17.1

25

25

533 Hsg. Prsrv. Grants

3.6

0

0

3.5

3.5

538 Rental Hsg. Guar.

150

150

150

150

150

Rental Prsrv. Demo. (MPR)

17.8

20

17.3

20

20

Rental Prsrv. Revlg. Lns.

0

0

0

0

0

542 Rural Hsg. Vouchers

10

12.6

9.7

12.6

12.6

Rural Cmnty. Dev’t Init.

6.1

0

6

6

6

a. Figures shown do not include 5% sequester or 2.5% across the board cut.

HUD PROGRAMS HAVE SOME CUTS, SOME INCREASES. HUD’s programs received a mix of level funding, reductions, and increases for FY14. HOME is at $1 billion, the same as in 2013, and CDBG is increased slightly. Other programs with increases include tenant- and project-based rental assistance, homeless assistance, public housing operating, and Section 202 elderly housing. In addition to HOME, programs with level funding include Native American housing and housing counseling. Cuts are made to public housing capital, fair housing, AIDS housing, Section 811 for the disabled, SHOP, and healthy homes.

HUD Program
(dollars in millions)

FY13
Finala

FY14
Admin. Budget

FY14
House Bill

FY14
Senate Bill
S. 1243

FY14
Final
H.R. 3547

Cmty. Devel. Fund
CDBG
Sustainable Commun. Init.
Rural Innovation Fund

3,308
2,948
0
0

3,143
2,798
0
0

1,697
1,637
0
0

3,295
3,150
75
0

3,100
3,030
0
0

HOME

1,000

950

700

1,000

1,000

Tenant-Based Rental Asstnce.
(Vets. Affairs Spptve. Hsg. Vchrs.)

18,939.4
(75)

19,989.2
(75)

18,610.6
(75)

19,592.2
(78)

19,177.2
(75)

Project-Based Rental Asstnce.

9,339.7

9,872

9,450.7

10,772

9,516.6

Public Hsg. Capital Fund

1,886

2,000

1,500

2,000

1,875

Public Hsg. Operating Fund

4,262

4,600

4,262

4,600

4,400

Choice Neighbrhd. Initiative

120

400

0

250

90

Housing Trust Fund

c

1,000

c

c

c

Native Amer. Hsg. Block Grant

650

650

600

675

650

Homeless Assistance Grants

2,033

2,381

2,088

2,261

2,105

Rural Hsg. Stability Prog.

b

5

b

b

b

Hsg. Opps. for Persons w/ AIDS

334

332

300

332

330

202 Hsg. for Elderly

377

400

375

400

385.3

811 Hsg. for Disabled

165

126

126

126

126

Fair Housing

70.8

71

55.8

70

66

Healthy Homes & Lead Haz. Cntl.

120

120

50

120

110

Self-Help Homeownshp. (SHOP)

13.5

10

10

13.5

10

Housing Counseling

45

55

35

55

45

a. Figures shown do not include 5% sequester. b. Funded under Homeless Assistance Grants. c. National Housing Trust Fund is “mandatory” funding, not discretionary, so does not need to be funded through appropriations legislation, although the Admin-istration did include it in its budget request.

CONGRESS CHANGES HUD’S DEFINITION OF “EXTREMELY LOW-INCOME.” The FY14 omnibus spending law makes several policy changes in HUD programs, including one that will help residents of poor rural areas to qualify. For the Housing Choice Voucher, public housing, and Section 8 Project-based Rental Assistance programs, “extremely low-income” is defined as the higher of 30% of area median income (the current standard) or the federal poverty level. The statute directs HUD to put this change into effect quickly.

FIRST PROMISE ZONES INCLUDE TWO RURAL AREAS. On January 9 President Obama announced the first five places to win “Promise Zone” designations, giving them preference for a variety of federal programs. The rural grantees are the Choctaw Nation of Oklahoma and a group of counties in southeast Kentucky served by Kentucky Highlands Investment Corporation. The cities of Los Angeles, Philadelphia, and San Antonio were also selected.

HUD SUGGESTS OWNERS WARN TENANTS BEFORE MORTGAGES MATURE. A HUD letter encourages owners of HUD-subsidized Section 236 rental properties to notify tenants months before their mortgages mature, at which time owners are usually allowed to convert to market rate rents. HUD offers preservation resources to owners. Contact HUD, 236preservation@hud.gov.

POVERTY GUIDELINES UPDATED. The Department of Health and Human Services has issued its annual poverty guidelines, adjusted based on the Consumer Price Index. Contact Kendall Swenson, HHS, 202-690-7507.

STUDY EXAMINES HIGH POVERTY NEIGHBORHOODS. Concentration of Poverty in the New Millennium, published by The Century Foundation and the Rutgers Center for Urban Research and Education, finds that the number of high-poverty census tracts decreased from 1990 to 2000 but increased again from 2000 to 2010 and is now greater than ever. The largest increase in number of these tracts was in micropolitan areas (10,000-50,000 population). The report also has data by race/ethnicity, region, and state, and brief discussion of the problems known to be caused by concentrations of poverty.

HAC REPORTS ON USDA HOUSING PROGRAMS IN FY13. HAC’s annual review of USDA Rural Development’s performance summarizes USDA obligation data by program area and by state. In addition, the report includes historic activity for selected rural housing programs.

SECTION 502 TRAINING FROM HAC. Join the Housing Assistance Council on March 25-27, 2014 in Memphis, TN for the Section 502 Packaging Training for Nonprofit Developers, a valuable training for any organization that packages or intends to package USDA Rural Development Section 502 Loans.

USDA Multi-Family Fair Housing Occupancy Report FY 2012

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USDA’s annual occupancy survey shows 2,135 fewer units and 1,254 fewer occupied units (households) in Section 515 and 514/516 properties in 2012 than 2011. There are 1,243 more households receiving Section 521 Rental Assistance and 931 fewer with rental aid from other sources. The number of cost burdened households dropped by 1,562.

Moises Loza Speaks at Florida Home Partnership Playground Build Event

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The Florida Home Partnership (FHP), in celebration of National Homeownership Month, gathered over 100 volunteers to help build a playground for its Bayou Pass Village Phase III development. Tammye Treviño, Administrator for USDA’s Housing and Community Facilities Program and HAC’s Executive Director Moises Loza participated in this event.

Video from FHP

[youtube]jfpOBFAdo2c[/youtube]

FHP’s photo album for the event

USDA Multi-Family Fair Housing Occupancy Report FY 2011

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USDA’s annual occupancy report for Section 515 and 514/516 rentals states that from April 2010 to May 2011 the total number of Section 515 properties dropped by 270 (about 3,600 apartments) and the number of farmworker properties increased by six.

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