Federal / Agency News Category Archives

HUD’s Office of Recapitalization Opens “Office Hours” for RAD Questions

HUD’s Office of Recapitalization (Recap) is hosting “Mod Rehab Talk” office hours for Moderate Rehabilitation (Mod Rehab) owners to schedule times to speak with HUD staff one-on-one to discuss their properties, questions about Rental Assistance Demonstration (RAD) conversion, preservation strategies, and the RAD application process. Owners will be able to sign up for individual 30-minute sessions with HUD staff during designated times each week on Tuesdays and Thursdays from 2:00 – 4:00 PM EST. After this initial call, owners who need further consultation and guidance may be referred to TA providers for on-call direct TA.

Sign up today for one of the 30-minute sessions. You may also sign up on the RAD and Multifamily Housing Preservation pages on the HUD Exchange.

In addition to these scheduled sessions, you are always welcome to contact HUD Recap staff by emailing rad2@hud.gov at your convenience to discuss your property and RAD conversion questions.

CDFI Fund Awards $3.5 Billion in New Markets Tax Credits

On February 13, the CDFI Fund made $3.5 billion in NMTC Awards to 73 Community Development Entities. The Fund received 230 applicants this year requesting a total of $16.2 billion in NMTCs.

The Fund estimates that of the award total this year, over $685 million in NMTCs will be invested in non-metropolitan counties. The NMTC Program has historically created $8 of private investment for every $1 worth of tax credits. The program also boasts the creation or retention of almost 750,00 jobs and the construction or rehabilitation of over 190 million square feet of commercial real estate from program inception in 1994 through 2016.

No Affordable Housing Funds In President Trump’s Infrastructure Plan; Proposal to Lift Volume Cap Could Help Affordable Housing

President Trump’s Infrastructure Plan was officially released on February 12. As previously reported, the plan would perhaps inadvertently benefit affordable housing by lifting state volume caps on Private Activity Bonds, but it does not outline additional funding for affordable housing. What’s worse, writes Jacob Leibenluft of the Center on Budget and Policy Priorities, is that the Infrastructure Plan is essentially a bait and switch. The plan only promises $200 billion in federal funding which is expected to come from “budget cuts to programs in the same agencies that would receive new grant-making authority under [the] infrastructure proposal.” (The recently released budget takes a 19% cut to the Transportation Department while the Infrastructure Plan focuses primarily on improving transportation infrastructure).

The Trump Administration expects the remaining $1.3 trillion of investment to come from the private sector as well as state and local governments with no proposal for how these localities would raise such a large amount of money. Leibenluft postulates that much of the eventual cost will be borne by low- and moderate-income people.

While savings from cuts to the Department of Transportation would be sent back to that same Department in the form of grants, the same would not be true for HUD, whose cuts would also ostensibly pay for the infrastructure plan, but as affordable housing is not a part of the plan, HUD would receive nothing back in return.

White House Releases Budget Request and Addendum, 14.2% Cut for HUD

On February 12, the White House released the President’s Budget Request for FY 2019 which originally called for an 18.3% cut to the Department of Housing and Urban Development. Later that same day, Mick Mulvaney, Director of the Office of Management and Budget, released an addendum to the budget request, modifying the initial request to reflect increased budgetary spending caps that were recently adopted by Congress. Notably, the White House addendum requests additional funding for defense that is in line with the new spending caps but only requests a modest increase, well below the statutory limit, for non-defense spending. The addendum increases its request for HUD by $2 billion, accounting for a 14.2% overall cut to the Department’s budget. Before delving into details, it’s important to remember that the Congress is not obligated to follow the President’s budget request and will very likely strike its own balance.  However, policy issues and themes outlined within the Budget request are taken into consideration and will likely frame the FY-2019 appropriations debate.

NH&RA Executive Director Thom Amdur observes, “Affordable housing is a critical part of our nation’s economic infrastructure. HUD’s programs are vital tools that have leveraged billions of dollars in private-sector capital for community development, contributed to the economic revitalization of countless communities, and have expanded opportunities to millions of our most vulnerable fellow Americans. At a time when Harvard University’s recent “State of the Nation’s Housing Report” finds that affordability pressures continue at near record levels, we cannot afford to eliminate so many vital community development resources. If we really want to get America “winning again” then we need to renew our commitment to expanding affordable housing options, particularly for low and moderate-income Americans.”

What we do not know

The President’s Budget Request is lacking in many details. While we know rental assistance programs in general would receive a cut of roughly 11%, we do not yet know the exact proposed funding numbers for programs like Project-Based Rental Assistance, Tenant-Based Rental Assistance, the Housing for the Elderly Program, the Public Housing Operating Fund, Housing for Persons with Disabilities, and Sec. 515.

Oddly, the addendum calls for adding back $300 million to the Public Housing Operating Fund, though the original budget document does not specify how much funding the Department is requesting to receive (enacted funding in 2017 was $4.4 billion). The same is true for Tenant-Based Rental Assistance, which the addendum calls for adding an additional $700 million; however, since the budget gives no specific number, we do not know what the final request for the program is (2017 enacted levels were $20.29 billion).

What we know

Programs Proposed for Elimination

The following programs are proposed to be eliminated or “zeroed-out” in the President’s Budget Request:

  • Public Housing Capital Fund
  • HOME Investments Partnership Program
  • The CDFI Fund
  • Choice Neighborhoods Initiative
  • Community Development Block Grants
  • Native Hawaiian Housing Block Grants
  • FHA General and Special Risk Insurance Fund
  • S. Interagency Council on Homelessness
  • Neighborhood Reinvestment Corporation
  • Low Income Home Energy Assistance Program
  • Weatherization Assistance Program
  • Delta Regional Commission

Policy

The majority of HUD’s budget each year goes to rental assistance programs. The budget suggests reforming rental assistance by requiring able-bodied individuals to pay more than the current 30% of adjusted income towards rent. Increased payments for able-bodied individuals is meant to balance overall funding decrease rental assistance programs would receive. The addendum specifies that an additional $1 billion be added to rental assistance programs solely for the benefit of elderly and disabled families.

While Congress is not likely to follow the numbers outlined in the budget request, the proposal to have stricter requirements on able-bodied people is a popular idea amongst many Republicans, and we could potentially see such a rent increase or work requirements placed on able-bodied families receiving rental assistance. There are several issues with this, as pointed out by the Urban Institute:

  1. Most able-bodied households on rental assistance are already working
  2. Putting a higher cost-burden on these households may make it more difficult for those without a job to find one. Employed individuals may find it more difficult to stay employed as it reduces their ability to pay for employment-supporting items like transportation and childcare.
  3. There is no evidence that rent increases or work requirements would lead to an increase in employment or income for lower income households.

Some Programs Receive Praise

The budget request singles out RAD as a successful example of leveraging private financing, and requests $100 million for the program, lifting the project cap, and expanding RAD for Project Rental Assistance Contracts (PRAC). Unfortunately, the same budget document also eliminates the Public Housing Capital Fund and cuts the Public Housing Operating Fund budget. If implemented, such cuts would effectively hamstring the program. An additional $100 million for the program would go a long way in assisting deeper needs projects but without adequate Capital and Operating fund budgets, the program simply will not work. If PHAs are to use RAD to leverage private sector capital to address their $40 billion backlog of capital needs and health and safety repairs, then Capital and Operating fund budgets must be maintained at current levels.

The budget also requests $75 million for the Family Self-Sufficiency program (equal to 2017 funding) and $10 million for the Jobs-Plus Initiative. $2.4 billion is also requested for the Homeless Assistance Grants program (equal to 2017 funding).

Reactions to the Budget and How You Can Participate:

National Housing Conference President and CEO David M. Dworkin was quoted saying “the best thing one can say about this budget is that it is dead on arrival…it undermines years of public-private investments in housing and community development that have had broad bipartisan support, like the CDFI Fund and block grant funding for neighborhood redevelopment. It even cuts the Capital Magnet Fund and National Housing Trust Fund, which aren’t even paid for by taxpayers.”

While the proposed budget may in fact be dead on arrival, it sets the stage for another year of needed advocacy on behalf of our most vital programs.

  • Campaign for Housing and Community Development Funding (CHCDF) will be holding a webinar about the Administration’s budget request on February 20 at 3:00 pm ET. Register here.
  • Sign two national letters urging Congress to reject the president’s harmful proposals.  Please share these letters and sign on by March 16.
    • One letter – READ AND SIGN HERE – urges Congress to provide the highest level of funding possible for affordable housing and community development programs.
    • The other letter – READ AND SIGN HERE – asks Congress to oppose any proposals that would cut housing benefits by increasing rents and imposing work requirements on current and future tenants.

 

HUD / RD PROGRAMS ENACTED FUNDING FY 2017 FY 2018 CR ANNUALIZED PRESIDENT’S FY 2019 BUDGET REQUEST
Project-Based Rental Assistance  $           10,816.00  ?
Tenant-Based Rental Assistance  $           20,292.00  ?
Public Housing Capital Fund  $             1,941.50  $ 1,941.50  $                 –
Homeless Assistance Grants  $             2,383.00  $ 2,383.00  $     2,383.00
Choice Neighborhoods Initiative  $                138.00  $    137.50  $                 –
Housing for the Elderly Program  $                502.40  ?
HOME Investment Partnerships  $                950.00  $    950.00  $                 –
Community Development Block Grants  $             3,060.00  $ 3,060.00  $                 –
Public Housing Operating Fund  $             4,400.00  ?
Housing for Persons with Disabilities Program  $                146.20  ?
Section 515 Rental Housing  $                  35.00  ?
Section 521 Rental Assistance  $             1,405.00  ?
RD Multifamily Preservation & Revitalization  $                  41.00  ?
Family Self-Sufficiency Program (FSS)  $                  75.00  $      75.00  $          75.00
Native American Housing Block Grant  $                654.00  $    654.00  $        600.00
RAD  $                         –  $             –  $        100.00
Native Hawaiian Housing Block Grants  $                     2.00  $        2.00  $                 –
HOPWA  $                356.00  $    356.00  $        330.00
FHA MMI Fund Account  $                130.00  $    130.00  $        150.00
FHA — General and Special Risk Insurance Fund  $                         –  $             –  $                 –
Fair Housing Programs  $                  65.90  $      65.30  $          62.30

Senate Agrees to $300 Billion Spending Increase Over Next Two Years, CR Likely

The Senate announced on February 7th that a deal had been reached on raising the spending caps set forth under the Budget Control Act of 2011 (PL 112-25) – without an agreement, the law would reduce spending to $549 billion for defense and $516 billion for nondefense. Under the bi-partisan deal, those caps would be increased in FY 18 by $63 billion for non-defense domestic spending and $80 billion for defense spending. The increases would be $68 billion and $85 billion, for domestic and defense, respectively, for FY 19. A short-term CR is likely needed to allow the Appropriations Committees to work out the final FY18 funding bills with the new spending caps.

Assuming the Senate passes the measure, it would still need to be approved by the House of Representatives, where Democratic votes will likely be necessary given concerns from conservative fiscal hawks concerned with increased spending as well as issues around raising the debt ceiling.

After extensive advocacy efforts by NH&RA members and others in the industry we were initially hopeful that the agreement would contain language from the Cantwell-Hatch bill to improve the LIHTC; unfortunately, these provisions were ultimately stripped out of the final compromise.  We are hopeful that there will be another opportunity to incorporate LIHTC improvements to another legislative vehicle later this year.

HUD Releases Updates to Known Issues and Solutions for CNA eTool

  1. A revised “Known Issues and Solutions 1-23-2018” document has been posted.  The revision adds a new Section 3.4 beginning at page 11.  The new section explains and provides a fix for the calendar year change error. Financial schedules obtained from 2018 validations of CNAs prepared in 2017 showed different results than the same CNA validated before the New Year. This document can be found at here.
  2. A revised “HUD RfR Financial Factors Tool v 2.0, 1.17.2018” is available here and on the HUDCLIPS page for the 2016 MAP Guide, replacing Version 1.0. The new tool is paired with the Financial Schedule produced by the CNA e-Tool and accommodates the requirement for CNAs submitted with applications for HUD FHA-insured mortgages.  Accordingly, the new Tool relies on importing or “cutting and pasting” Financial Schedule results from the CNA e-Tool.Unlike Version 1.0, this version does not need to be attached to a CNA at submission and lenders are not required to use Version 2.0.  However, HUD Reviewers will use Version 2.0 to verify that submitted CNAs have financial schedules that meet the minimum requirements for funding as described in the 2016 MAP Guide (Appendix 5G  Section VII, C.3. Note that VII.C.3.d(5) requiring lenders to submit a spreadsheet proof is no longer necessary).  Nonetheless, lenders may wish to verify their results using the new Tool prior to submission of a CNA.  The HUD RfR Financial Factors Tool is used to underwrite the adequacy of planned Reserve for Replacement (RfR) deposits in applications for HUD-FHA mortgage insurance.
  3. The CNA e-Tool recently experienced several service outages or slowdowns and at least one false error message.  Corrections have or are being made.
  4. The instructional materials used in the “hands on the keys” in-person trainings conducted from September – November 2017 for lenders and needs assessors have been posted to the HUD Exchange.
  5. HUD will be providing a webinar training on Thursday, February 8 at 2 pm EST for Project Rental Assistance Contracts (PRAC) owners. You may register for this webinar here.
  6. The January 18, 2018 webinar “Q&A on Implementing HUDs CNA e-Tool for Non-FHA Rental Assistance Demonstration (RAD) Transactions” has been posted here.
  7. A new training module has been posted here to assist users with federal accessibility regulations. All of the training modules have been posted here.
  8. Please direct questions to  the AAQ form.

For user access issues, please email CNAaccess@hud.gov.

The bulletin and subsequent updates can be found here.

President Trump Announces Intent to Nominate Seth Appleton to be Assistant Secretary of PD&R at HUD

On January 26, President Trump announced his intent to nominate Seth Appleton to be Assistant Secretary, Policy Development & Research, at HUD. Mr. Appleton currently serves as an Acting Assistant Secretary and General Deputy Assistant Secretary at the Department of Housing and Urban Development, where he manages the Department’s congressional and intergovernmental relations. He previously served as a senior staff member in the United States House of Representatives, most recently as chief of staff for United States Representative Blaine Luetkemeyer of Missouri from 2009 to 2017. During his tenure in the House, Mr. Appleton focused on policy issues related to housing, financial services, small business, and agriculture among other subjects. He earned a B.A. in history from Stanford University.

Nominate Your Affordable Housing / Community Revitalization Historic Preservation Project

Last year the Advisory Council on Historic Preservation and the U.S. Department of Housing and Urban Development (HUD) established a new joint Award for Excellence in Historic Preservation to honor outstanding historic preservation efforts with affordable housing and community revitalization successes. Agencies, developers, and organizations are encouraged to nominate projects or activities that advance the goals of historic preservation while providing affordable housing and/or expanded economic opportunities for low- and moderate-income families and individuals.

Preference will be given to projects and activities that do the following:

  • Promote the use of historic buildings for affordable housing, community development, and/or expanded economic opportunities
  • Include HUD funds or financing
  • Meet preservation guidelines
  • Contribute to local community revitalization efforts

Nominations for the 2018 cycle are due by 11:59 p.m. PST on March 1, 2018.

Nomination details can be viewed at https://www.huduser.gov/portal/sites/default/files/pdf/HUD-Sec-Award-excellence-historic-preservation-2018.pdf. Questions may be addressed to helpdesk@huduser.gov.