Washington Hotline - June 11, 2009

New HUD Multifamily Initiatives Underway

On May 29, during NAHB's spring board of directors meeting in Washington D.C, U.S. Housing and Urban Development Secretary, Shaun Donovan reported that reforms are underway at HUD and the Federal Housing Administration to put the housing market back on in addition to special initiatives to bolster the multifamily market.

Donovan said that the HUD budget will also be reestablishing a priority for multifamily and rental markets that are “critically important” for low- and moderate-income households.

HUD has proposed a $1 billion capitalization of the National Housing Trust Fund to initiate the first new housing production program since the creation of the home investment partnerships program in 1990.

On May 4, it was announced that more than $5 billion in Recovery Act funding was being provided to finance the acquisition and construction of affordable housing through the Low-Income Housing Tax Credit at a time when close to 50% of all tax-credit deals in the country were stalled by the economic crisis.

Donovan announced that HUD is putting $100 million into an energy innovation fund “that can go to support innovative lending products across the country that have spurred new developments, new standards for single-family and multifamily housing on energy efficiency."

A “Sustainable Communities” initiative, he said, will receive $150 million to help support higher density housing that is more integrated with the transportation needs of local residents.

View the video of Secratary Donovan's presentation and the press release here.

View the full story in NBN.

NAHB Board Approves Resolutions to Expand LIHTC Investor Base; Help Rural Households

During NAHB Spring Board of Directors meeting in Washington,DC, the Housing Credit Group (HCG) brought forward two resolutions for consideration that address current issues affecting the the Low-Income Housing Tax Credit (LIHTC) program. These policy proposals will become part of NAHB's LIHTC lobbying effort.

The first resolution, "Expanding Investor Market for Low Income Housing Tax Credits," urges Congress to amend the passive loss rules contained in Section 469 of the Internal Revenue Code in order to expand the LIHTC investor base to individual investors − including owners of S corporations, LLC’s, partnerships and closely-held C corporations. This resolution also urges Congress to implement legislative changes that will improve the corporate investment market, such as the revised carryback proposal supported by several industry groups. Each of these proposals is meant to expand the LIHTC investor base, a critical issue for the program.

The second resolution, "Providing Affordable Housing for Rural Americans," urges Congress to amend Section 142 of the Internal Revenue Code to establish an income limit calculation for two-earner families based on the higher of the local or national minimum wage rate that will allow them access to housing-credit and tax-exempt bond financed units. Currently, income limits for the LIHTC program unnecessarily discriminate against two-person households earning minimum wage in over 77% of rural communities across the United States. According to income limits published by the Department of Housing and Urban Development, these two-person households are considered over-income and therefore ineligible for LIHTC units, a flaw that needs to be resolved within the program.

A list of the Housing Credit Group's LIHTC priorities is available here.

For more information, contact Carmel McGuire at 800-368-5242 x8207. 

Green Building: Building Efficiency Measure Passed by Energy Panel; HUD Green Retrofit Applications

• Senate Energy Panel Passes Building Efficiency Measures
  
  The Senate Energy and Natural Resources Committee on June 4 marked up draft legislation on building efficiency that included new measures for building codes, energy labeling and grants for retrofitting older homes and buildings. 
  
  NAHB supported an amendment offered by Ranking Member Lisa Murkowski (R-Alaska) that would encourage increasing code compliance targets, but without specific deadlines for implementation and “life-cycle” cost calculations. The Murkowski amendment failed on a party-line vote of 13 to10.  The underlying legislation sets a 30% increase for the next edition of the residential code after 2010 and a 50% increase by 2016, but it requires the Secretary of Energy to issue a determination first on whether or not the 50% target is reasonable before implementation. 
  
  The Senate’s version of the energy code language is entirely different from language passed by the House Energy and Commerce Committee in late May.  Further debate on the climate and energy policy legislation is expected to occur on both the House and Senate floors this summer.
  
  For more information, e-mail Elizabeth Odina  or call her at 800-368-5242x8570.

View more articles from NAHB's Washington Update.

• HUD Accepting Applications for Green Retrofit Program Beginning June 15
  
  

  Program Description
  Grants and loans will be made available through HUD’s Office of Affordable Housing Preservation (OAHP) for eligible property owners to make energy and green retrofit investments in the property, to ensure the maintenance and preservation of the property, the continued operation and maintenance of energy efficiency technologies, and the timely expenditure of funds. Physical and financial analyses of the properties will be conducted to determine the size of each grant and loan. Incentives will be made available to participating owners. The terms of the grants or loans will include continued affordability agreements. Grant and loan funds must be spent by the receiving property owner within two years.

  Eligible Applicants
  Owners of properties receiving project-based assistance pursuant to section 202 of the Housing Act of 1959 (12 U.S.C. 17012), section 811 of the Cranston- Gonzalez National Affordable Housing Act (42 U.S.C. 8013, or Section 8 of the United States Housing Act of 1937, as amended (42 U.S.C. 1437f).

  Process for Making Awards
  Full detail of how to apply, and grant and loan terms, are available on this website.

  For more information, contact Claudia Kedda at 800-368-5242 x8352.
  
  Want more info on HUD programs? View HUD's Webcast Archive!
  
  
  
  

• Need Green? Check this out!
  ‘Build Green and Save’ Available at BuilderBooks.com

“Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption.

To view or purchase this publication online, click here, or call 800-223-2665.

Freddie Mac Strengthens the Multifamily Market with New Certificate Series

Multifamily market liquidity just got a boost. Freddie Mac announced the launch of its Series K-0003 Structured Pass-Through Certificates (" K Certificates"). These certificates offer multifamily mortgage-backed securities that provide a new arm of funding to stabilize and increase affordability within the multifamily market.

The K Certificates are backed by 62 recently originated multifamily mortgages totaling roughly $1 billion, guaranteed by Freddie Mac. The K Certificates allow Freddie Mac to supply more loans by offering structured guaranteed securities to the market, tailored to meet investors' needs. 

The Series K-003 SPC preliminary offering circular supplements can be found at http://www.freddiemac.com/mbs/data/k003oc.pdf and http://www.freddiemac.com/mbs/data/k003sup1.pdf 

View the full press release here.

Community Reinvestment Modernization Act Introduced in the House

Earlier this year, Rep. Eddie Bernice Johnson (D-TX) introduced H.R. 1479, "The Community Reinvestment Modernization Act of 2009." The bill broadens the CRA requirements to apply to financial holding companies (including all nonbank affiliates of any bank holding company and other nonbank financial institution affiliates of bank holding companies); securities and investment service companies; mortgage banks; insurance companies; and credit unions.

The bill also revises the regulatory evaluation process; adds additional performance factors (such as meeting the credit needs of neighborhoods of different racial characteristics in addition to income), penalizes institutions that practice predatory lending by reducing their CRA ratings; and requires evaluations of assessment areas that cover a larger geographical area than currently.

Additional requirements include more data disclosure for small business loans and for deposit accounts and the collection of data from insurance companies. Private mortgage insurers would have to report data under the Home Mortgage Disclosure Act. The bill also requires federal regulators to hold more public hearings and meetings when covered institutions merge or close.  The bill requires that all regulated financial institutions be examined at least once in every two-year period, regardless of size or the aggregate assets of the institution.

View a complete summary here.

This bill will likely be discussed during a Congressional hearing, but it is not on the House Committee on Financial Services schedule yet.

For more information, contact Claudia Kedda 800-368-5242 x8352.

June 25 Audio Seminar Examines AD&C Lending Challenges

Experts from the policy and lending arenas will discuss the challenges of and possible solutions to the acquisition, development and construction (AD&C) lending crisis during an upcoming NAHB audio seminar beginning at 2:00 p.m. on June 25.

Panelists in the seminar, “Examining the Challenges of the AD&C Lending Crisis,” will explore strategies to respond to the crisis and messaging that builders and remodelers can use to help communicate the AD&C lending problems they are experiencing to their federal, state and local government officials.

Seminar participants also will get an update on NAHB's efforts with regulators and lawmakers.  

In addition, during the seminar:

• Speakers will illustrate ways to deal with increased regulations and strategies for bankers and lenders to maintain relationships with long-time customers.
• Speakers will explain effective ways for builders to communicate with banks and possibly get more funding.
• The program will provide vital information on how the AD&C lending crisis is changing the relationship between banks and builders.

Karl Eckhart, NAHB political director, will moderate the seminar and provide strategies and messaging for builders to effectively relate their experiences to local government officials so they can, in turn, apply pressure to local banks.

Speakers include Chellie Hamecs of NAHB’ Housing Finance Department; Scott Meyer, NAHB federal lobbyist; and Kirk Hartley of Bank of America Home Loans California.

To Register

The registration fee is $79 per phone site and enables as many people as can fit in a room to participate. The fee also provides participants with free online access to the archived seminar after June 25.

To register, visit www.nahb.org/ADCLoanAudio.

For more information, e-mail Karl Eckhart at NAHB, or call him at 800-368-5242 x8126.

Resource: New HOME Compliance Publications

The Office of Affordable Housing Programs announced two new publications on rental compliance. View the summary of the new programs below:

Compliance in HOME Rental Projects: A Guide for Property Owners

This guide helps owners of HOME-assisted properties comply with the HOME Program’s ongoing affordability requirements.  It describes the specific regulatory requirements that apply to HOME-assisted rental properties during periods of affordability. It provides tools for owners and property managers—in the form of checklists, forms, and sample documents—to facilitate the day-to-day rental management of HOME-assisted properties.

Compliance in HOME Rental Projects: A Guide for PJs

This guide provides advice to participating jurisdictions (PJ's) on how to nurture compliant HOME projects. A compliant HOME project is a financially viable projects that is maintained in standard condition and rented at affordable rents to low-and very low-income tenants, in accordance with HOME rules, for the entire period of affordability. The guide will focus on two things; (1) Selecting and Managing  HOME Rental Properties and (2) the (PJ’s) role in ensuring long-term compliance.

To access these guides, all interested parties should contact COMMUNITY CONNECTIONS, P.O. Box 7189, Gaithersburg, MD 20898-7189, 1-800-998-9999.

Calendar: Conferences and Events

June 2009 

NCSHA Housing Credit Conference & Marketplace 3-in-1 Webinar June 15-18 Los Angeles, Calif. Hear first-hand how the states are implementing the most significant changes to the program since its inception. Learn how the development industry continues to respond to economic and market turbulence. Join top professionals in the Housing Credit industry for intensive training, expert-led dialogues, and roundtable discussions covering today’s foremost issues in the Housing Credit world, CLICK TO REGISTER View all three events for $195! Sign Up Now for a 3-in-1 Webcast Be a virtual attendee! Attend the Pre-Conference forum and get tripple the info with this Webinar package including two more plenary sessions. View the full agenda here. Pre-Conference Forum on Housing Credit Investment Monday, June 15, 1:30 p.m. - 3:30 p.m. PST Fourteen recognized leaders in the Housing Credit world come together to educate potential investors about the program's benefits and to explore how we can work together as an industry to make the program even more attractive to investors. Guest Speakers: Don Beaty, President, The Summit Group John Casey, Vice Chairman, Meridian Investments, Inc.  Richard Goldstein, Partner, Nixon Peabody LLP Robert Moss, Senior VP, Director of Origination, Boston Capital Corporation Beth Mullen, Principal, Reznick Group Patrick Nash, Managing Director, JP Morgan Capital Corporation Marc Schnitzer, Chief Executive Officer & President, Centerline Capital Group Sindy Spivak, Senior Vice President, Bank of America and more!

Are you ready to be recognized as one of the best in the country? You design and build great projects — why not get the recognition you deserve? Enter the 2009 Best in American Living Award, the nation’s most prestigious residential design competition, and show customers why your product is head and shoulders above the rest. Enter at www.probuilder.com/bala. Forms and fees are due by July 15, 2009. For more information, e-mail Judy Brociek or call her at 630-288-8184.

October

SAVE THE DATE!! 2009 Fall Board of Directors Meeting September 30 - October 4 Sheraton Chicago Hotel & Tower 301 East North Water Street Chicago IL, 60611 REGISTER TODAY!