December 21, 2012

Fiscal Cliff Update

This week, both President Obama and Speaker of the House John Boehner (R-OH) offered up new proposals for how to avert the fiscal cliff —i.e. mandatory across-the-board government spending cuts known as “sequestration” and the expiration of the Bush 2001 and 2003 tax cuts. There are 11 days until the fiscal cliff is set to take effect. Unfortunately, both parties continue to disagree on the path forward.

President Obama has suggested allowing tax rates to rise for those making over $400,000 a year, which would generate an additional $1.2 trillion in revenue over the next decade. The President’s plan would slow the growth of the inflation rate used to calculate certain entitlement benefits and federal employee salary growth. Speaker Boehner suggested a similar provision in an earlier fiscal cliff proposal. The President’s proposal would generate additional budget savings by reducing spending on health care programs by $400 billion, non-health entitlements by $200 billion, non-security discretionary programs by $100 billion and security discretionary programs by $100 billion. This proposal would also raise the debt-ceiling for the next two years. However, Speaker Boehner declared the proposal “unbalanced,” and continued to urge the White House to offer a proposal that cuts spending as much as it raises revenue.

Yesterday, Speaker Boehner discussed his intention to move legislation that would increase income tax rates for those making over $1 million per year, maintain the current tax rates for everyone else and raise the debt-ceiling for one year. The tax bill was supposed to move in conjunction with H.R. 6684, the Spending Reduction Act. The Speaker described his “Plan B” strategy to avert the fiscal cliff during a press conference:

“Our bill would protect 99.81 percent of the American people from an increase in taxes. It’s permanent tax relief for individuals, a permanent patch on the alternative minimum tax, the marriage penalty, death tax relief, and a permanent extension of the higher child tax credit and the capital gains and dividends rates we see today. All in all, the nonpartisan Joint Committee on Taxation says the bill represents a $3.9 trillion tax decrease.”

“The House today will also pass a bill to replace the sequester.  It will actually not only replace the sequester with cuts – but even further address the deficit problem that we have.” 

However, plans to vote on the tax bill were abandoned because the Republican leaders did not have the votes to pass it. Even if it had passed, the Administration did not support the bill.

NAHMA will continue to work with the Administration, Congress, and our industry colleagues to protect funding for affordable housing programs from these looming threats. We will provide members with more information regarding these issues as it becomes available. In the meantime, NAHMA strongly advises you to contact your Congressional Representatives and urge them to avert the negative impacts of sequestration for affordable housing programs.

For more information on this issue and details about contacting your Congressional Representatives, please visit: http://www.nahma.org/content/grassroots_sequestration.html

H.R. 6684: Spending Reduction Act of 2012

On Wednesday, Majority Leader Eric Cantor (R-VA) introduced H.R. 6684, the Spending Reduction Act of 2012. The bill would reduce discretionary spending for a number of non-security programs and replace the sequester for a period of one year. Detailed information about H.R. 6684 can be found at http://majorityleader.gov/blog/2012/12/the-spending-reduction-act.html. The House narrowly approved the bill by a vote of 215-209.

Some other noteworthy provisions of H.R. 6684 would:

• Terminate the Home Affordable Modification program;
• Decrease discretionary spending by $19 billion for FY 2013; and
• Require the Office of Budget and Management (OMB) to issue a report on January 15, 2013, detailing the implementation of sequestration for non-security discretionary programs.

It is extremely unlikely the Senate Democratic leadership will move this bill forward because they oppose many of the spending cuts outlined in the legislation.

The Emergency Supplemental Appropriations Bill (H.R. 1)

The Hurricane Sandy relief bill is under consideration in the Senate. This afternoon, the Senate invoked cloture on the substitute amendment to the bill (S.A. 3395 to H.R. 1) by a vote of 91-1. Cloture is a parliamentary procedure which ends debate on a bill. If 60 senators vote to invoke cloture, Senate leaders can schedule votes on amendments and final passage.

On Thursday, the Senate Banking Committee held a hearing titled “Recovery from Superstorm Sandy: Rebuilding our Housing and Transportation Infrastructure.” The hearing examined the Obama Administration’s current response to the destruction caused by Hurricane Sandy and planned recovery efforts. Testimony was given by Administration officials from HUD and the Federal Transportation Administration and a number of local government officials.

HUD’s Deputy Assistant Secretary for Grant Programs Yolanda Chavez discussed the Department’s response to the disaster. She explained that over 150,000 housing units experienced damage and/or flooding due to Sandy. Almost half of these units were occupied by low- and moderate-income households. So far, HUD and FEMA have provided $2.7 billion worth of assistance to victims of the hurricane.

Chavez informed the Committee that HUD has been actively trying to connect storm-displaced families with temporary housing, regardless of whether they were displaced from private or government-assisted housing. HUD has also allowed providers of senior housing to open up their vacant units to victims of Sandy. The Department has also been working to get boilers and generators to affordable housing projects damaged by the storm and waiving a number of administrative requirements to quickly facilitate getting affordable housing units back online. In addition, the Agency has increased fair market rental allowances to make it easier for displaced Section 8 voucher recipients to find replacement housing. Furthermore, HUD has waived a number of regulations in order to allow CDBG and HOME funds for disaster relief. Finally, Deputy Assistant Secretary Chavez urged the Senate to quickly pass the Emergency Supplemental Appropriations Act in order to facilitate the flow of additional funds toward relief efforts as soon as possible.

For more information about the hearing, including an archived webcast and copies of the testimony offered, please visit: http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=fbf77cfd-07dd-49b5-8bfc-cd6fc32e903a

Sen. Inouye Passes Away; Sen. Mikulski Assumes Appropriations Chair Position

It is with great sadness that we must inform you that Senator Daniel Inouye (D-HI) passed away earlier this week due to health complications. Sen. Inouye was the Chair of the Senate Appropriations Committee, which determines the funding levels that government programs receive, including affordable housing programs. The Senator supported strong funding levels for HUD’s housing programs.

Yesterday, the Senate agreed to S. Res. 627, designating Senator Barbara Mikulski (D-MD) as the Chairman of the Senate Committee on Appropriations. If you have any properties in the state of Maryland, NAHMA strongly encourages you to contact her office in the new year and let her staff know how important providing full funding for affordable housing rental assistance programs are for her constituents and properties located in the state.

For more information on contacting your Senators to discuss these and other critical affordable housing issues, please visit: http://www.nahma.org/content/grassroots_PBS8.html

H.R. 6677: Common Sense Housing Investment Act

This week, Rep. Keith Ellison (D-MO) introduced H.R. 6677, the Common Sense Housing Investment Act. The bill would replace the current mortgage interest deduction with a 20% mortgage interest credit. It would use the savings to fund an expansion for the LIHTC, the National Affordable Housing Trust Fund, Section 8 rental assistance, and the Public Housing Capital Fund.

The bill has been referred to the House Ways and Means Committee. Rep. Ellison plans to use the bill to generate additional conversation about the mortgage interest credit and to act as a place holder for the 113th Congress. It is unlikely to be considered before the end of the 112th Congress this month.

H.R. 4053 Improper Payments Elimination and Recovery Improvement Act

The Senate passed H.R. 4053,  a bill to intensify efforts to identify, prevent, and recover payment error, waste, fraud, and abuse within Federal spending. It is now cleared for the President’s signature. The December 14 edition of Washington Update describes H.R. 4053 in detail. Please see http://www.nahma.org/executive/insider.2012.html#1214IP for more information.

Among other requirements, the bill establishes a “Do Not Pay” database, which agencies must review in order to determine a party’s eligibility for a payment or award from a federal program.

December 14, 2012

Fiscal Cliff Update

There are 18 days until the fiscal cliff—i.e. mandatory across-the-board government spending cuts known as “sequestration” and the expiration of the Bush 2001 and 2003 tax cuts—is set to take effect.

The negotiations between the White House and Congressional leaders on a deal to avert or delay the fiscal cliff are ongoing and no substantial progress appears to have been made. Republicans continue to insist on maintaining or reducing the current income tax rate and entitlement reforms. Democrats refuse to consider entitlement spending cuts and reforms at this time. President Obama remains adamant that the income tax rate should be increased for the wealthy in order to generate additional revenue.

There is a strong suspicion that these parties will not come to a deal before January 2, 2013, and the United States will go over the fiscal cliff due to the continuing impasse.

We have been in contact with both HUD and USDA-RD to see how each plans to implement the cuts, if they come to pass, for their rental assistance programs. HUD has said they have developed a number of scenarios to address sequestration for the project-based Section 8 program; however, the Department is unsure of the actual actions it will take. USDA-RD has stated that they will continue to fund the rental assistance contract renewals until the Agency runs out of funds. USDA-RD also indicated that they have not yet received any guidance from the Office of Management and Budget on how to implement sequestration.

NAHMA believes that it is extremely irresponsible to let sequestration be implemented. These spending cuts will devastate affordable multifamily housing programs, particularly the rental assistance programs. It is quite possible that property owners may receive partial or delayed housing assistance payments and some tenants may see their rental assistance cut at a time when they need it most.

We will provide members with more information regarding the ongoing negotiations as it becomes available. In the meantime, we continue to urge you to contact your Congressional Representatives and urge them to avert the negative impacts of sequestration for affordable housing programs. For more information on this issue and details about contacting your Congressional Representatives, please visit: http://www.nahma.org/content/grassroots_sequestration.html

H.R. 1: Military Construction, Veterans Affairs, and Disaster Relief Appropriations Act, 2013

Next week, the Senate is expected to consider H.R. 1, the Military Construction, Veterans Affairs, and Disaster Relief Appropriations Act, 2013. The bill would provide additional appropriations to provide disaster relief to the victims and areas affected by Hurricane Sandy. It will not contain any provisions to provide appropriations for affordable housing programs through the remainder of FY 2013.

H.R. 1 was originally a potential legislative vehicle for the full year FY 2011 CR at the beginning of the 112th Congress. However, it was not moved forward at the time and another vehicle was used. Because all appropriations legislation must originate in the House, sometimes the Senate take an older appropriations bill and use it as a parliamentary procedure to expedite the consideration of their own appropriations bill, like emergency appropriations for disaster relief.

The bill provides appropriations for and expands temporary housing programs for those who were displaced by the hurricane. The bill also authorizes up to $17 billion for community and economic revitalization efforts and allows PHAs to make temporary adjustments in their Section 8 housing choice voucher (HCV) allocations to help house displaced victims.

A copy of the legislation may be found here: http://www.appropriations.senate.gov/news.cfm?method=news.view&id=0f718f5d-c9e1-49a1-9b5a-33a313bb423d

H.R. 4053: Improper Payments Elimination and Recovery Improvement Act

Yesterday, the House passed H.R. 4053, the Improper Payments Elimination and Recovery Improvement Act, by a vote of 402 to 0. The act would help the federal government intensify efforts to identify, prevent, and recover improper payments.

The bill would require OMB to:

• Publish an annual report on high-priority programs with improper payments that:
• Identifies the programs with the highest dollar value, risk, and/or rate of improper payments;
• Establishes targets for reducing improper payments associated with these programs;
• Details OMB’s plans for recovering and preventing improper payments, and
• Is available to the public; and
• Provide guidance to federal agencies to improve the estimates of and prevent improper payments.

The bill also establishes a “Do Not Pay” database, which agencies must review in order to determine a party’s eligibility for a payment or award from a federal program. The databases that the agencies must check against include:

• The Death Master File of the Social Security Administration;
• The General Services Administration's Excluded Parties List System;
• The Debt Check Database of the Department of the Treasury;
• The Credit Alert System or Credit Alert Interactive Voice Response System of the Department of Housing and Urban Development; and
• The List of Excluded Individuals/Entities of the Office of Inspector General of the Department of Health and Human Services.

Agencies may use other databases in addition to the “Do Not Pay” list to check for eligibility.

The bill will now go before the Senate for further consideration.

S. 3678, H.R. 4264: FHA Emergency Fiscal Solvency Act of 2012

This week, Sen. Pat Toomey (R-PA) introduced the Senate companion legislation (S. 3678) to H.R. 4264, the FHA Emergency Fiscal Solvency Act of 2012. The bill is identical to the legislative language the passed the House in September. HUD also strongly supports this legislation.

The bill would require HUD to raise mortgage insurance premiums for single-family loans, disqualify lenders that produce loans that frequently default, make it easier to require lenders to reimburse the government for faulty loans, and increase reporting requirements on the FHA program’s financial health.

Sen. Toomey also offered this legislative language as an amendment to S. 3637, the Transaction Account Guarantee program extension bill. However, S. 3637 was sent back to the Senate Banking Committee for further consideration.

S. 3678 has been referred to the Senate Banking Committee.

DRAFT BILL: Common Sense Housing Investment Act

NAHMA has learned that Rep. Keith Ellison (D-MO) is currently working on a draft bill to replace the current mortgage interest deduction with a 20% mortgage interest credit. The bill is currently known as the Common Sense Housing Investment Act.

The legislation would limit the total amount of single-family mortgage interest eligible for new mortgage interest credit from $1.1 million ($1 million for a mortgage and $100,000 for a home equity loan) to $500,000. Second homes and up to $100,000 for the home equity lines of credit would also be eligible for the new credit. This change would be phased in over five years.

The revenue savings from the change, estimated at about $27 billion a year, would be used to:

• Expand the Low Income Housing Tax Credit from $1.75 per capita to $2.70 per capita;
• Provide around $15 billion for the National Affordable Housing Trust Fund;
• Provide about $7.7 billion for Section 8 rental assistance; and
• Provide about $2.5 billion for the Public Housing Capital Fund.

Rep. Ellison plans to introduce the legislation in the near future. However, it is extremely unlikely to move ahead before the end of this year and the 112th Congress.

Nevertheless, Rep. Ellison plans to use it to generate additional conversation about the mortgage interest credit and to act as a place holder for the 113th Congress.

NAHMA Meets with REAC, HUD Multifamily, and USDA-Rural Development

In follow up to the cancellation of NAHMA’s Fall Meeting last October because of Hurricane Sandy, NAHMA participated in a number of meetings with REAC, HUD Multifamily, and USDA Rural Development to discuss our concerns with regulatory policies related to multifamily affordable housing programs.

We are currently preparing a summary of all three meetings that we will send out to all members shortly.

December 7, 2012

Countdown to the Fiscal Cliff

This week, the negotiations on ways to avert the fiscal cliff—i.e. mandatory across-the board cuts known as sequestration and the expiring 2001 and 2003 Bush tax cuts—continued. If Congress takes no action, both sequestration and the tax increases are set to take place in early January, less than four weeks away.

Speaker of the House John Boehner (R-OH) acknowledged he is willing to discuss increasing tax revenue by closing tax loopholes and ending certain tax credits; however, Republicans still oppose increasing income tax rates. President Obama and Democrats continue to insist on raising income tax rates on the wealthy but are willing to maintain income tax rates below 39.6 percent for the wealthiest Americans.

Republicans also continue to push for additional spending cuts and entitlement reforms as part of the negotiation. Their Monday proposal would have increased spending cuts by $1.4 trillion by:

• Changing the way the government calculates inflation, which would slow the growth of entitlement benefits and federal employee salaries;
• Cutting spending from mandatory and discretionary programs;
• Nevertheless, the Republicans did not provide any specifics on what programs would be cut and how; and
• Increasing the eligibility age for Medicare and limiting health benefits for the wealthy.

In addition, President Obama and the Democrats continue to push for the ability to raise the debt-ceiling without Congressional approval. Under this proposal, the President would be able to raise the debt ceiling unless at least two-thirds of each chamber of Congress vetoed it. The plan Republicans presented to the public on Monday did not include a way to address the debt-limit. However, Boehner has insisted that any increase in the debt ceiling should be matched dollar for dollar with new spending cuts and is not likely to support the proposal in any final package.

Finally, Democrats are also pushing for a one year delay of sequestration. The plan Republicans presented to the public on Monday did address the upcoming sequestration.

It is important to note that there is one commonality between the Republican and Democratic proposals: the deficit would be reduced by $4 trillion over the last decade. This will likely continue to be the savings goal in the ongoing fiscal cliff negotiations.

NAHMA will continue to work with the Administration, Congress, and our industry colleagues to protect funding for affordable housing programs from these looming threats. We will provide members with more information regarding these issues as it becomes available. In the meantime, NAHMA strongly advises you to contact your Congressional Representatives and urge them to avert the negative impacts of sequestration for affordable housing programs.

For more information on this issue and details about contacting your Congressional Representatives, please visit: http://www.nahma.org/content/grassroots_sequestration.html

Congressional Leadership Announcements

This week, Rep. Nita Lowey (D-NY) was selected as the new Ranking Member for the House Appropriations Committee. NAHMA is looking forward to working with Rep. Lowey’s staff of affordable housing issues in the coming year.

In addition, Sen. Jim DeMint (R-SC), who is the Ranking Member of the Senate Banking Housing, Transportation, and Community Development Subcommittee, announced he would be leaving Congress to become the President of the Heritage Foundation. This leaves the Ranking Member position on the Subcommittee up in the air for the 113th Congress.

NAHMA will provide our members with additional information on changes to Congressional committee leadership positions as it becomes available.

Senate Banking Committee Hearing on FHA Solvency

Yesterday, the Senate Banking Committee held a hearing regarding the status of Federal Housing Administration (FHA) programs, including those for multifamily housing and healthcare facilities, and the fiscal year (FY) 2012 review of the Mutual Mortgage Insurance Fund (MMIF). HUD Secretary Donovan provided testimony to the Committee.

The hearing focused on the results of the recently released FY 2012 actuarial report to Congress on the financial status of the FHA MMIF, which provides mortgage insurance to the single-family mortgage market. Under the National Housing Act, the MMIF must maintain a minimal capital reserve ratio of 2 percent of its portfolio. According to the report, the capital reserve ratio of the fund fell below zero to negative 1.44 percent (negative $16.3 billion) in FY 2012. The majority of the losses—about $70 billion in claims—were attributed to loans insured from 2007 to 2009 that defaulted. This means that HUD may require an infusion of funds from the Treasury before the end of FY 2013 (September 30, 2013) in order to meet the minimum reserve ratio.

Nevertheless, the report noted that the quality and profitability of loans insured through FHA from 2010 to the present have improved significantly and are quite strong. These insurance premiums, according to Secretary Donovan, should help offset the portfolio losses due to the defaults. However, Secretary Donovan could not guarantee that FHA would not need an infusion of funds from the Treasury before the end of FY 2013. He did discuss that HUD was taking additional steps to reduce the likelihood of FHA requiring a Treasury withdrawal, such as:

• Increasing collections from older loans within the portfolio;
• Increasing the returns on distressed assets when they are sold;
• Improving refinancing policies/options available;
• Streamlining the FHA short-sale policy;
• Revising the premium cancellation policy;
• Increasing mortgage insurance premiums again;
• Developing new housing counseling incentives and tools;
• Disposing of real estate owned properties; and
• Enact new statutory tools to help FHA achieve its goals.

The Secretary also stated that the President’s FY 2014 budget request would address the question of FHA’s capital reserve needs for FY 2013 in more detail.

Finally, the Secretary discussed FHA’s multifamily housing programs and recent portfolio performance. He noted that the portfolio had increased significantly over the last four years due to the lack of liquidity in the market. He also indicated that FHA’s role in the multifamily market was temporary and that HUD was trying to encourage the growth of private competition in the market.

Although the portfolio has been performing well, Secretary Donovan informed the Committee that HUD had taken steps to mitigate additional risk in the multifamily programs. So far, HUD has: increased mortgage insurance premiums for most multifamily loans, implemented a new loan committee approval process, required more stringent underwriting and owner experience for large loans, revised the multifamily mortgage documents, published guidance for how owners should conduct capital needs assessments for projects insured under FHA programs, improved monitoring of multifamily insured loans, reviewed internal oversight operations, and launched a pilot program to simplify the underwriting of FHA-insured loans with LIHTCs.

For more information about the Senate Banking Committee hearing, please visit:  http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=b0c44d6f-687e-4e1d-8623-e50cdbe4ac8f

NAHMA is concerned that the controversy surrounding the solvency of FHA’s single-family portfolio may impact the treatment of the multifamily mortgage market. HUD has already increased mortgage insurance premiums on some multifamily properties and healthcare facilities in order to help offset its losses in the single-family portfolio, despite the fact that these mortgages have much lower rates of default. NAHMA does not believe that the multifamily mortgage market, which continues to perform well, should be treated in a similar fashion as the single-family market. As a result, we are currently working on a NAHMAnalysis on the FHA solvency crisis that will examine these issues more in-depth. We will inform members as soon as it is completed.

November 30, 2012

Fiscal Cliff Update

Yesterday, Treasury Secretary Tim Geithner unveiled a proposal to address the fiscal cliff—i.e. the mandatory across-the board spending cuts known as “sequestration” and the expiration of the Bush 2001 and 2003 tax cuts, both scheduled to take effect in early January 2013.

The proposal would raise an additional $1.6 trillion in revenue by increasing income tax rates for the wealthy, the capital gains/carried interest tax rate, and the estate tax. The plan would also delay sequestration for at least one year and provide $50 billion for a new infrastructure bank and additional benefits for unemployed workers. The proposal includes $400 billion in savings from changes to federal health and entitlement programs. Finally, the plan would permit the White House to unilaterally increase the debt ceiling unless two-thirds of Congress (both the House and Senate) disapprove. Essentially, this would allow the President to avoid the contentious debates and delays that accompanied the previous debt ceiling increase in Congress in the summer of 2011.

Speaker of the House John Boehner (R-OH), however, promptly rejected the plan. He stated that he was disappointed that the plan did not include any specifics on cutting government spending. Furthermore, House Republicans continue to oppose raising income tax rates above their current levels for anyone. Nevertheless, they have publically indicated that they are open to raising tax revenue through closing tax loopholes and ending certain tax credits.

NAHMA will provide members with more information regarding the ongoing negotiations as it becomes available. In the meantime, we strongly advise you to contact your Congressional Representatives and urge them to avert the negative impacts of sequestration for affordable housing programs. For more information on this issue and details about contacting your Congressional Representatives, please visit: http://www.nahma.org/content/grassroots_sequestration.html

House Republicans Announce Committee Leaders for 113th Congress

This week, House Republicans approved their Committee chairs in the 113th Congress. Rep. Hal Rogers (R-KY) will remain Chair of the House Appropriations Committee. Rep. Jeb Hensarling (R-TX) will take over the Chairmanship of the House Financial Services Committee. Finally, Rep. Dave Camp (R-MI) will continue to hold the Chair position on the House Ways and Means Committee.

House Republicans will likely determine the Subcommittee Chair positions for these Committees in the New Year. House Democrats, Senate Republicans, and Senate Democrats have yet to determine who their Committee leaders will be in the 113th Congress. NAHMA will keep members informed as more information becomes available.

For more information on the implications of these Committee leadership announcements for affordable housing programs in the 113th Congress, please see NAHMAnalysis 2012-1120 “Presidential Elections 2012”, located here: http://www.nahma.org/member/NAHMAAnalysis/NAHMAnalysis%20Presidential%20Elections%202012.pdf

HFSC Holds Hearing on Basel III Capital Standards

Yesterday, the House Financial Services Insurance, Housing, and Community Opportunity Subcommittee held a hearing on the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Department of Treasury Office of the Comptroller of the Currency’s (the agencies) proposed notices of proposed rulemaking (NPR) that would implement new capital standards to address the risky lending that led to the financial crisis. These capital rules were agreed to by several countries during international negotiations known as the Basel III accords. Testimony was offered by several federal and state regulators, state government officials, industry stakeholders, and academic experts.

NAHMA provided comments on the impact of the proposed NPRs on the mortgage and lending markets in October. A copy of our comments may be found here: http://www.nahma.org/member/Tax%20Credit/NAHMA%20Regulatory%20Capital%20Rules%20Comment%20Letter%20102212.pdf

The Office of the Comptroller of the Currency and FDIC’s testimonies highlighted several members of the housing and banking industries’ initial feedback on the proposed NPRs. According to these agencies, both the housing and banking stakeholder groups that commented were worried that the proposed risk-weights for mortgages and certain loans were disproportionately high when compared to the actual lending risk and would force some banks to curtail or exit the mortgage market. In particular, the housing and banking industry commenters (including NAHMA, although we were not specifically identified in the testimony) noted that the treatment of commercial real-estate loans—typically used for acquisition, development, and construction—were less then risk sensitive than other loans receiving similar capital treatment. The housing and banking stakeholder groups were also concerned about how the new risk-weights would interact with pending mortgage regulations whose final form remains uncertain. All of these concerns were echoed in testimony offered by members of the banking industry later in the Subcommittee hearing. The Federal Reserve, FDIC, and Office of the Comptroller of Currency all acknowledged they would review industry comments on the proposed NPRs in-depth and anticipated making changes to the rules based on that feedback.

For more information on the hearing, please visit: http://financialservices.house.gov/calendar/eventsingle.aspx?EventID=312618

November 16, 2012

Election 2012 Brief: Status Quo Edition

Last week, the nation held its 2012 Presidential election. Despite record amounts of money being spent on the federal campaigns, the status-quo prevailed. Democrat President Obama won re-election with 332 electoral votes to Republican Mitt Romney’s 206. Obama also won 50.4% of the popular vote, barely edging out Mitt Romney.

The Democrats increased their majority in the Senate by one in the 113th Congress (2013-2014). The Senate is divided between 53 Democrats, 45 Republicans, and two Independents who plan to vote with the Democrats. This means that the Democrats will not have a filibuster-proof majority in the Senate. The term “filibuster” refers to a parliamentary procedure in the Senate where a senator, or a series of senators, may speak for as long as they wish on any topic they choose to delay or prevent consideration of a piece of legislation.  A filibuster may only be broken when 60 of the 100 Senators, typically of the same party, decide to end the debate by invoking cloture.

In the House, the Republicans maintained their majority but lost at least four seats to the Democrats in the 113th Congress. Currently, the New York Times is reporting that the Republicans have 233 seats and the Democrats have 195 seats, with seven races currently too close to call.

As a result, the Republicans will control key committee chairmanships in the House and the Democrats will maintain control of key committee chairmanships in the Senate.

NAHMA is currently working on a NAHMAnalysis about the Presidential Election which provides additional information on what the election results mean for NAHMA’s policy priorities and affordable housing programs in the 113th Congress. We will send it out to our members as soon as it is published.

Fiscal Cliff Update

This week, Congress returned to Washington, DC for the final few weeks of the 112th Congressional term, more commonly known as the “lame-duck” period. President Obama plans to meet with Congressional leaders from both parties today to begin talks on ways to avoid the upcoming fiscal cliff.

The “fiscal cliff” refers to the mandatory across-the-board government spending cuts (known as “sequestration”) and the automatic tax increases (caused by the expiring Bush 2001 and 2003 tax cuts), which are slated to begin in early January 2013. Many economists—including the Congressional Budget Office (CBO), the former Director of the CBO Douglas Holtz-Eakin, the Committee for a Responsible Federal Budget, the non-partisan Tax Policy Center, Wells Fargo Economist Mark Vitner, George Mason University Economist Stephen S. Fuller, chairman of the Federal Reserve Ben Bernanke just to name a few—believe that, if the government moves forward with the fiscal cliff, it will move the economy towards a recession once more.

The President has also invited the Senate’s bipartisan “Gang of Eight”—a group that has tasked itself with providing recommendations for cuts to government spending and revenue increases—to participate in the talks.

President Obama has publically stated that he will not back away from increasing taxes on the nation’s wealthiest households in order to help offset some of the cuts in government spending required by sequestration.

Republican Speaker of the House John Boehner (R-OH) has said that he is open to raising revenues through closing tax loopholes and other deductions. He has also announced the Republicans would be willing to raise fresh tax revenue as long as Democrats agreed to entitlement reforms and keeping the income tax rate for all earners below 35 percent. However, Democrats have publically rejected the Republican call to reduce spending on entitlement programs.

Because of these fundamental disagreements, the path forward on averting the fiscal cliff still remains uncertain. The President and Congressional leaders will likely continue to meet in the coming weeks to discuss potential proposals further. NAHMA will keep members updated as the President and Congress move forward in the negotiation process and when any legislative proposals to avert the fiscal cliff are announced.

September 28, 2012

Continuing Resolution Update

The Senate passed H. J. Res. 117, the continuing resolution (CR), over the weekend. The CR would fund all government programs at FY 2012 levels for the first half of FY 2013, unless otherwise specified. The fiscal year begins on October 1. The CR would last through the end of March 2013.

This means that all federal multifamily affordable housing programs would be funded at FY 2012 levels, including project-based Section 8. While NAHMA continues to strongly support fully funding project-based Section 8 at $9.8 billion as provided by the Senate’s FY 2013 T-HUD Appropriations bill (S. 2322), the FY 2012 appropriations levels are still preferable to the HUD and House proposals. The FY 2013 HUD Budget Request and H.R. 5972, the House’s FY 2013 T-HUD Appropriations Act, propose cutting funding for project-based Section 8 by $611 million below FY 2012 levels.

The CR also contained provisions that would extend the current pay freeze for all Federal employees. The bill is now going to President Obama to be signed into law.

GAO Release Report on Housing Assistance Programs

Last week, the Government Accountability Office (GAO) released a report on “Opportunities Exist to Increase Collaboration and Consider Consolidation” in Federal housing assistance programs.

The study found that federal housing assistance is fragmented across 160 programs and activities. Overlap existed for some products offered, the service delivery, and the geographic areas served by selected programs—particularly single-family mortgage financing programs within USDA-RHS and HUD-FHA. Nevertheless, the products, areas served, and delivery methods differed across the programs. For example, RHS-financed properties were more concentrated in rural areas and HUD’s and Treasury’s tax credit properties were more concentrated in urban and suburban areas.

GAO also found that opportunities existed to increase collaboration among the agencies providing housing assistance and realize efficiencies. The report specifically cited the progress made by the White House’s Rental Policy Working Group (RPWG) to identify areas and make recommendations for potential coordination/consolidation. However, GAO stated that RPWG had not taken “full advantage of opportunities to reinforce agency accountability for collaborative efforts through the agencies’ annual and strategic plans, or expanded its guiding principles to evaluate areas requiring statutory action to generate savings and efficiencies.”

The GAO report recommended that HUD, the Office of Management and Budget (OMB), USDA, and Veterans Affairs (VA) should incorporate additional collaborative practices into the Single-Family Housing Task Force’s program review. The report also recommended that HUD, USDA, and Treasury should document their efforts to consolidate and align the requirements for multifamily programs in their annual and strategic plans. It also suggested that the RGPW should identify specific programs for consolidation, including those requiring statutory changes.
In addition, the report noted that HUD, USDA, and VA generally agreed with the GAO’s recommendations; however, HUD and OMB stated that further action should wait until after the housing markets stabilize.

A copy of the report and its supplementary materials may be found here: http://gao.gov/products/GAO-12-554.

September 21, 2012

Continuing Resolution Update

The Senate is expected to vote on H. J. Res. 117, the continuing resolution (CR), Saturday morning. The CR would fund all government programs at FY 2012 levels for the first half of FY 2013, unless otherwise specified. The fiscal year begins on October 1. The CR would last through the end of March 2013.

This means that all federal multifamily affordable housing programs would be funded at FY 2012 levels, including project-based Section 8. While NAHMA continues to strongly support providing fully funding project-based Section 8 at $9.8 billion as provided by the Senate’s FY 2013 T-HUD Appropriations bill (S. 2322), the FY 2012 appropriations levels are still preferable to the HUD and House proposals. The FY 2013 HUD Budget Request and H.R. 5972, the House’s FY 2013 T-HUD Appropriations Act, propose cutting funding for project-based Section 8 by $611 million below FY 2012 levels.

The CR also contained provisions that would extend the current pay freeze for all Federal employees. The bill is expected to pass the Senate.

H.R. 6361: Vulnerable Veterans Housing Reform Act

On Wednesday, the House passed H.R. 6361, the Vulnerable Veterans Housing Reform Act. The bill would allow payments to pension funds, attendant care, and disability benefits to be deducted from the income calculation for qualifying veterans.

The Act uses the utility allowance and data provision from the draft Affordable Housing and Self Sufficiency Improvement Act as an offset for the cost. The provision authorizes HUD to collect and publish utility consumption data to assist in establishment of tenant-paid utility allowances by public housing agencies. It also gives PHAs the discretion to calculate utility allowances using either family size or unit size, in order to ensure utility allowances are more accurate reflections of tenant utility consumption.

The bill will now go to the Senate for consideration.

S. 3538: Small Public Housing Agency Opportunity Act of 2012

Last week, Sen. Mike Johanns (R-NE) introduced S. 3538, the Small Public Housing Agency Opportunity Act of 2012. The bill would reduce the regulatory oversight burdens for small public housing agencies (i.e. PHAs that administer 550 housing choice vouchers or less).

The legislation would reduce physical inspections of small PHA’s public housing projects to once every three years, unless that agency has been designated as “troubled,” based on deficiencies in the physical condition of its public housing projects.

The legislation would also reduce the physical inspections of units receiving a small PHA’s housing choice vouchers to once every three years. The management of the voucher program would be evaluated solely on the basis of the lease-up rate or the budget utilization rate of the small PHA. A lease-up rate or budget utilization rate of at least 90 percent is determined as acceptable for management evaluation purposes.

A small PHA will be designated as “troubled” if it fails to do the following:

• Comply with the inspection requirements;
• Maintain an acceptable ratio of current assets to current liabilities for its public housing portfolio;
• Maintain an acceptable lease-up or budget utilization rate for its voucher program;
• Account for its spending and revenue or
• Comply with Federal law.

Small PHAs will have the right to appeal this designation.

The bill would also allow small PHAs to convert their public housing units to project-based vouchers or project-based Section 8 rental assistance, subject to appropriations and HUD approval, and create a rent reform demonstration program for PHAs.

S. 3538 has been referred to the Senate Banking Committee.

H.R. 6416: Rural Housing Preservation Act

Last week, Rep. Jeff Fortenberry (R-NE) introduced H.R. 6416, the Rural Housing Preservation Act. The bill would allow areas that were eligible for Federal rural housing programs through June 30, 2012 to remain eligible for those programs through FY 2013 (September 30, 2013).

The bill has been referred to the House Financial Services Committee.

S. 3541: Revising the Census and Population Requirements for “Rural” Areas

Last week, Sen. Ben Nelson (D-NE) introduced S. 3541. The bill would revise the census and population requirements for the definition of “rural areas” in order to ensure areas receiving access to rural housing programs from 2000-2010 continue to do so through 2020. It would also increase the maximum population of a rural area from 25,000 to 35,000 for the purposes of rural housing programs.

The act has been referred to the Senate Banking Committee.

September 18, 2012

White House Releases Sequestration Report

Last week, the Obama Administration released “OMB Report Pursuant to the Sequestration Transparency Act of 2012 (P. L. 112–155).” The report provides detailed estimates of the Budget Control Act’s required sequestration (i.e. mandatory across-the-board spending cuts) to discretionary funding. The report estimates that, if sequestration goes into effect, defense discretionary spending would be cut by 9.4 percent and non-defense discretionary spending would be cut by 8.2 percent. This report was required by legislation passed by Congress in July and signed into law by President Obama in early August.

The following affordable multifamily housing programs administered by HUD would receive automatic 8.2 percent across-the-board cuts (based on FY 2012 appropriations) under sequestration:

• HUD’s Project-based Section 8—An estimated cut of $772 million;
• HUD’s Tenant-based Section 8 (except for the veteran’s programs administered by Veteran’s Affairs, which are exempt) —An estimated cut of $1.5 billion;
• HUD’s Section 202—An estimated cut of $31 million;
• HUD’s Section 811—An estimated cut of $14 million;
• Community Development Fund—An estimated cut of $279 million;
• HOME—An estimated cut of $82 million;
• Choice Neighborhoods—An estimated cut of $10 million;
• Ginnie Mae’s Guarantees of Mortgage-backed Securities Loan Guarantee Program Account—An estimated cut of $2 million; and
• Lead Hazard Reduction—An estimated cut of $10 million.

The report also included FHA’s general and Special Risk Program Account as eligible for sequester, but did not provide a sequestration cut estimate.

The following USDA-Rural Housing Service affordable multifamily housing programs would also receive 8.2 percent across-the-board reductions (based on FY 2012 appropriations) under sequestration:

• Section 521 Rural Rental Assistance—An estimated cut of $74 million;
• The Rural Housing Insurance Fund Program Account (which includes Section 538 and Section 515 loans)—An estimated cut of $42 million; and
• The Multifamily Revitalization Program—An estimated cut of $1 million.

Although the Obama Administration’s sequestration estimates are preliminary, the cuts would be particularly devastating to HUD and USDA’s rental assistance programs if they are accurate. The FY 2012 appropriations levels for both the project-based Section 8 program and the tenant-based Section 8 program are already below what is necessary to fully fund all 12-month contract renewals in FY 2013. Sequestration, if enacted, would essentially guarantee that some housing providers would receive delayed or partial payments for their rental assistance contracts in FY 2013.

Project-based Section 8 properties have experienced delayed/partial contract payments before. In 2007, some owners received delayed or partial housing assistance payments (HAP) due to short-funding of the program. Short-funding the rental assistance contracts had very serious consequences. Many affordable housing owners deferred payments on property operations—including mortgages, maintenance, staff salaries, and utilities. Property owners and management agents had to pay numerous late fees to lenders and service providers as a result of late mortgage and utility bill payments. Some properties had to lay off staff and delay much needed rehabilitation and preservation projects. Cutting funding for these programs would jeopardize the efficient management, financial solvency, and physical health of properties with project-based Section 8, tenant-based Section 8, and rural rental assistance contracts. 

As a result, NAHMA strongly opposes cuts to affordable housing programs, particularly the tenant-based Section 8, project-based Section 8, and rural rental assistance contracts. The Obama Administration also believes that “sequestration would undermine investments vital to economic growth, threaten the safety and security of the American people, and cause severe harm to programs that benefit the middle-class, seniors, and children.” We will continue to work with Congress, the Obama Administration, and industry stakeholders to ensure that sequestration does not negatively impact these programs.

A copy of the sequestration report may be found here: http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/stareport.pdf

House Passes Continuing Resolution

Last week, the House passed H. J. Res. 117, a continuing resolution (CR). The CR would fund all government programs at FY 2012 levels for the first half of FY 2013, unless otherwise specified. The fiscal year begins on October 1. The CR would last through the end of March 2013.

This means that all federal multifamily affordable housing programs would be funded at FY 2012 levels, including project-based Section 8. While NAHMA continues to strongly support providing fully funding project-based Section 8 at $9.8 billion as provided by the Senate’s FY 2013 T-HUD Appropriations bill (S. 2322), the FY 2012 appropriations levels are still preferable to the HUD and House proposals. The FY 2013 HUD Budget Request and H.R. 5972, the House’s FY 2013 T-HUD Appropriations Act, propose cutting funding for project-based Section 8 by $611 million below FY 2012 levels.

The CR also contained provisions that would extend the current pay freeze for all Federal employees. The Senate will vote on the CR as early as Wednesday.

H.R. 6365: National Security and Job Protection Act

Last week, the House passed H.R. 6365, the National Security and Job Protection Act. The bill would shift the burden of sequestration required by the Budget Control Act (BCA) from defense discretionary spending entirely on to non-defense discretionary spending. The bill does not specify how those cuts should be distributed across non-defense discretionary spending accounts.

The bill will not be taken up by the Senate. The Obama Administration has also threatened to veto any legislation that shifts the BCA-required sequestration from defense discretionary spending into non-defense discretionary spending.

H.R. 6361: Vulnerable Veterans Housing Reform Act

Last week, the House Financial Services Committee passed H.R. 6361, the Vulnerable Veterans Housing Reform Act. The bill would allow payments to pension funds, attendant care, and disability benefits to be deducted from the income calculation for qualifying veterans.

The Act uses the utility allowance and data provision from the draft Affordable Housing and Self Sufficiency Improvement Act as an offset for the cost.The provision authorizes HUD to collect and publish utility consumption data to assist in establishment of tenant-paid utility allowances by public housing agencies. It also gives PHAs the discretion to calculate utility allowances using either family size or unit size, in order to ensure utility allowances are more accurate reflections of tenant utility consumption.

NAHMA has not taken a position on this legislation. It will now go to the House floor for a vote.

August 3, 2012

Six Month Continuing Resolution Deal Reached

This week, House and Senate leaders announced that they reached a deal on a continuing resolution (CR). The CR would fund all government programs at FY 2012 levels for the first half of FY 2013, unless otherwise specified. The fiscal year begins on October 1. The CR would last through the end of March 2013.

This means that all federal affordable housing programs would be funded at FY 2012 levels, including project-based Section 8.  While NAHMA continues to strongly support providing fully funding project-based Section 8 at $9.8 billion as provided by the Senate’s FY 2013 T-HUD Appropriations bill (S. 2322), the FY 2012 appropriations levels are still preferable to the HUD and House proposals. The FY 2013 HUD Budget Request and H.R. 5972, the House’s FY 2013 T-HUD Appropriations Act, propose cutting funding for project-based Section 8 by $611 million below FY 2012 levels.

In addition, the leaders agreed that spending for the first half of the year must be within the limits of the $1.047 discretionary spending cap that Congress agreed to in the Budget Control Act (BCA) last summer. The bill will not contain any policy riders.

Congress plans to consider the CR in September after it returns from the August recess.

Nevertheless, there are still questions about how the government will deal with the mandatory across-the-board spending cuts that are required by the BCA in January 2013.  NAHMA will keep members updated as Congress moves forward with the consideration of the CR and other sequestration efforts.

Senate Banking Subcommittee Hold Hearing on Section 8 HCV Reform

On Wednesday, the Senate Banking Housing, Transportation, and Community Development Subcommittee held a hearing titled “Streamlining and Strengthening HUD’s Rental Housing Assistance Programs.”  The majority of the hearing focused on proposals to reform the Section 8 Housing Choice Voucher (HCV) program, the Family Self Sufficiency Program, and the Moving-to-Work (MTW) program.  Testimony was given by PHAs, think tanks, and industry stakeholders.

All the panelists told Subcommittee Chairman Robert Menendez (D-NJ) that they supported reforms to the Section 8 HCV program. They were particularly supportive of the proposals to reduce inspections and streamline rent reviews and income certifications, which are contained in the draft Affordable Housing and Self Sufficiency Improvement Act (AHSSIA) that is currently under consideration in the House.

Both Keith Kinard, the Executive Director of the Newark Housing Authority, and Dianne Hovdestad, the Deputy Director of the Sioux Falls Housing and Redevelopment Commission, believed that there would be large financial consequences if the HCV program was not reformed.  Kinard said that PHAs could not afford to carry out the regulatory burdens associated with administering the HCV program under due to cuts in administrative fees for FY 2012. According to Hovdestad, PHAs focus the majority of their resources on performing the regulatory and reporting requirements for the HCV program, which takes away resources and staff time used to do inspections and income certifications.  Both agreed that the Section 8 HCV reforms in AHSSIA would greatly help reduce regulatory burdens and free up additional resources to serve more low-income households.

Senator Jack Reed (D-RI) asked about the need to fund the National Housing Trust Fund.  Linda Couch, the Senior Vice President for Policy and Research for the National Low Income Housing Coalition, stated that additional funding was necessary to help reduce the number of Americans with “worst case housing needs.” The funding would be used to create new affordable housing and preserve existing units, which would generate jobs.

In addition, Kinard discussed the importance of providing additional funding for HUD’s Rental Assistance Demonstration (RAD) program.  He believed the demonstration program would help rehabilitate distressed public housing and supplement capital needs in some jurisdictions. 

NAHMA’s written statement to the Subcommittee for the hearing record discusses our support for specific provisions of AHSSIA, such as streamlined inspections under the HCV program and the LEP authorization language.  The statement will be posted to the Legislative News section of NAHMA’s webpage as soon.

NAHMA also signed on to an industry letter supporting a number of Section 8 HCV reforms in AHSSIA that was submitted to the Subcommittee for the record.  A copy of that letter may be found here: http://www.nahma.org/Leg%20area/2012-07-30%20Coalition%20Letter%20to%20Senate%20Banking%20re%20Section%208%20Final%202.pdf

Chairman Menendez indicated that he would like to draft and move a Section 8 HCV reform bill in the fall.  He said that these good reforms had been delayed for far too long.

For more information about the hearing, please visit: http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=8be4f8f9-eab4-4995-a8eb-e934f9de5a4b

Senate Finance Committee Passes Tax Extenders Act

Yesterday, the Senate Finance Committee passed the Family and Business Tax Cut Certainty Act of 2012 with strong bipartisan support. The bill would extend a number of expiring tax cuts including:

• The Alternative Minimum Tax (AMT) exemption for middle class families through 2013;
• The exclusion of the military basic housing allowance from income determinations for LIHTC properties through 2014, originally provided by the Housing and Economic Recovery Act (HERA) of 2008;
• Foreclosure and mortgage debt cancellation exemptions from taxable income through 2013;
• Mortgage insurance premium deductions for qualified residences through 2013;
• The New Markets Tax Credit through 2014; and
• The energy efficiency appliance credit through 2013.

Sens. Maria Cantwell (D-WA) and Olympia Snowe (R-ME) offered an amendment to extend the flat 9 percent credit rate for allocated LIHTCs through 2013.  The flat rate credit freeze—originally included in HERA—is set to expire at the end of 2012. The provision is estimated to cost $8 million over 10 years. This amendment was adopted.

NAHMA strongly supports extending the flat credit rate for LIHTCs through 2013.  In fact, we have been working with industry colleagues to move legislation forward that would permanently extend the flat 9 percent credit rate for new construction and substantial rehabilitation LIHTCs, as well as create a flat 4 percent credit rate for property acquisition LIHTCs.  Sens. Cantwell and Snowe have introduced this legislation in the Senate as S. 1989.  Rep. Pat Tiberi (R-OH) has also introduced companion legislation, H.R. 3661, in the House. However, these bills have not been moved forward in their respective Committees.

Sen. Tom Coburn (R-OK) also offered an amendment to the bill, which would prohibit any recipient of a New Markets Tax Credit from also receiving other federal tax benefits, federal grants, or federal loans for the same purpose or project.  This amendment would have essentially eliminated one of the financing tools developers and affordable housing providers use to help revitalize communities. Fortunately, the Committee opposed the adoption of this amendment in a roll call vote.

For more information about the Family and Business Tax Cut Certainty Act, please visit:  http://www.finance.senate.gov/newsroom/chairman/release/?id=e3290a69-8fa4-4a6d-8c3a-756ea03a4224

The bill will now go to the Senate floor for consideration.

S. 3494: Housing for Homeless Students Act

This week, NAHMA sent a support letter to Sen. Al Franken (D-MN) for S.3494, the Housing for Homeless Students Act.

The bill would amend the Internal Revenue Code to qualify formerly homeless youth who are students for purposes of the low income housing tax credit (LIHTC). It ensures that the some of America’s most vulnerable have access to affordable housing. It is the Senate companion bill to H.R. 3076, which was introduced in the House by Rep. Jim McDermott (D-WA) last year.

A copy of that letter may be found here: http://www.nahma.org/Leg%20area/NAHMA%20official%20support%20letter%20for%20Franken%20Homeless%20Student%20Exemption%20Bill%202012.pdf

NAHMA also plans to meet with Sen. Franken’s office in late August to discuss the need for a single student occupancy rule across all federal housing programs.

The bill was introduced in the Senate yesterday.  It has been referred to the Senate Finance Committee.

July 27, 2012

Assistant Secretary of Housing / FHA Commissioner

Carol Galante’s nomination as HUD Assistant Secretary of Housing and FHA Commissioner appears to be moving closer to a vote in the Senate. On July 26, 2012 the Senate reached a unanimous consent agreement, to debate and vote on her nomination at a time to be determined by the Majority Leader, in consultation with the Republican Leader. NAHMA is seeking additional information about when this vote is likely to be scheduled.

H.R. 5872: Sequestration Transparency Act of 2012

This week, Congress passed H.R. 5872, the Sequestration Transparency Act of 2012.  The legislation requires the Obama Administration to submit a report to Congress on the mandatory cuts to government spending, also known as “sequestration,” required by the Budget Control Act (BCA) that was passed in August 2011.

Under the BCA, Congress tasked a Congressional “super” Committee with identifying $1.2 trillion in government spending cuts over the next decade in addition to the discretionary spending caps set in the bill.  Because the “super” Committee could not come to a consensus by the November 23, 2011 deadline, the Obama Administration must undertake across-the-board cuts in both security and non-security discretionary spending over the next 10 years starting in January 2013.

The report sanctioned by H.R. 5872 would require the Administration to provide the following information to Congress within 30 days after enactment:

• An estimate of the sequestration percentages and spending cuts for both security and non security discretionary appropriations categories and direct spending functions;
• Information on the discretionary and direct spending accounts that would be cut under sequestration, as well as the estimated reductions for the programs, project, and activities funded by these accounts; and
• Information on what discretionary and direct spending accounts will be exempt from sequestration.

In testimony before the House Appropriations Committee earlier this year, HUD Secretary Shaun Donovan cautioned against enacting sequestration.  He said that the across-the-board cuts were bad public policy which would result in an eight percent cut to HUD’s budget and jeopardize housing for low-income households. NAHMA is also extremely concerned about the sequestration. We have been working with industry colleagues and other groups to educate Congress about the negative impact it would have on affordable housing programs.

H.R. 5872 will now go to President Obama for his signature. 

In addition, House Republicans continue to push for the repeal of sequestration for discretionary defense and security programs, by enacting deeper, across-the-board cuts to nondefense discretionary spending programs. On May 12, the House passed H.R. 5652, the Sequester Replacement Reconciliation Act of 2012. The bill would reduce non-security discretionary spending in FY 2013 by $19.1 billion. Fortunately, the bill does not include any cuts for multifamily affordable housing programs at this time. Offsets under H.R. 4966 include:

• Flood insurance reform;
• Repealing elements of the Dodd-Frank law;
• Subjecting the Consumer Financial Protection Bureau to the Congressional appropriations process;
• Eliminating the Home Affordable Modification Program;
• Eliminating several programs and rules authorized by the Obama Administration’s 2010 health care law;
• Making it harder to qualify for food stamps by restricting eligibility given to beneficiaries of other government programs, specifically the Low Income Home Energy Assistance Program;
• Repealing the Social Services block grant; and
• Requiring federal employees to increase contributions to their pensions.

The Senate does not plan to take up this legislation, and the White House has threatened to veto it.

FY 2013 Appropriations Update

The Senate will not be considering any of the FY 2013 appropriations bills before the August recess. They are also unlikely to consider these bills in September before Congress recesses for the 2012 election season.  A continuing resolution (CR) through the November elections is almost guaranteed at this point.

This means that all government programs, including HUD’s affordable housing programs, will likely be funded at FY 2012 levels for the first several weeks of FY 2013 (which begins on October 1) unless otherwise specified in the CR.

House Republicans are also discussing passing a CR through April 2013, after the start of the 113th Congress. NAHMA will keep members updated as Congress moves forward in the appropriations process for FY 2013.

H.R. 6203: Protect Our Schools from Tax Delinquents Act of 2012

On Wednesday, Rep. Pat Meehan (R-PA) introduced H.R. 6203, the Protect Our Schools from Tax Delinquents Act of 2012.  The bill would require owners of units assisted under the Section 8 housing choice voucher program to remain current with all local property and school taxes. The bill would authorize PHAs to use housing assistance payments (HAP) to pay such tax debts for the owner until the property is current.  The bill would also require HUD to keep a list of owners who exhibit a pattern of delinquency on their taxes.

NAHMA plans to review this legislation in conjunction with our Federal Affairs Committee.

The bill has been referred to the House Financial Services Committee.

July 2, 2012

House Passes H.R. 5972: FY 2013 Transportation-HUD Appropriation Bill

On Friday, the House passed H.R. 5972, its FY 2013 Transportation-HUD Appropriations Act. The bill provides funding for the Department of Transportation and HUD programs in the coming fiscal year.

Project-Based Section 8 Funding

H.R. 5972 provides $8.7 billion for the project-based Section 8 program, with $8.44 billion set aside for contract renewals in FY 2013.  This amount is NOT enough to fully fund all project-based Section 8 contracts for their 12-month terms at renewal. In fact, this is $611 million below the FY 2012 appropriations and is $1.1 billion below the Senate’s proposed FY 2013 appropriation.  The $8.7 billion was originally requested in HUD’s FY 2013 budget earlier this year. If the funding level currently included in H.R. 5972 is enacted, it will only fund contract renewals through the end of the fiscal year (September 30, 2013) instead of their full 12-month terms at renewal.  About two-thirds of all project-based Section 8 contracts would receive 9 months of funding or less, depending on what month the contract renews in 2013.

No amendments were offered on the House floor to provide additional funding for the project-based Section 8 program.

NAHMA strongly opposes providing anything less than full-funding for the project-based Section 8 program.  We support the funding level of $9.88 billion which includes $9.62 billion for contract renewals, provided in S. 2322, the Senate’s FY 2013 T-HUD bill. As a result, we will continue to work with Congress and our industry colleagues to ensure the Senate funding level is included in the conferenced FY 2013 T-HUD appropriations bill.

In addition, H.R. 5972 included the following legislative language in the project-based Section 8 account:

“That, notwithstanding any other provision of law, upon the request of the Secretary of Housing and Urban Development, project funds that are held in residual receipts accounts for any project subject to a section 8 project-based Housing Assistance Payments contract that authorizes HUD to require that surplus project funds be deposited in an interest-bearing residual receipts account and that are in excess of an amount to be determined by the Secretary, shall be remitted to the Department and deposited in this account, to be available until expended.”
HUD requested this authority in its FY 2013 budget as a “cost savings” measure.  This language was also included in S. 2322.
Nevertheless, there is some good news.  H.R. 5972, as passed by the House, does NOT include the Senate’s “troubled properties” language, which would require HUD to take more aggressive actions against owners when properties fail REAC inspections.
Other Programs

H.R. 5972, as passed by the House, would provide the following funding amounts for multifamily HUD programs in FY 2013:

• House’s FY 2013 proposal for Tenant-Based Section 8: $19.1 billion (total); $17.2 billion for voucher contract renewals
  • Senate’s FY 2013 proposal for Tenant-Based Section 8: $19.4 billion (total); $17.5 for voucher contract renewals
  • FY 2013 HUD budget request: $19.07 billion (total); $17.24 billion for voucher contract renewals
  • FY 2012 appropriations: $18.9 billion (total); $17.24 billion (contract renewals)
    
    
• House’s FY 2013 proposal for Section 202: $425 million
  • Includes full funding for all PRACs, authorizes continued funding for Senior Preservation Rental Assistance Contracts (SPRAC), $50 million for capital advances, and $90 million for service coordinators
  • In the Committee report, the House Appropriations Committee claims that the Section 202 PRAC properties’ residual receipts accounts “have accumulated in situations where the subsidies and tenant rent payments provided have exceeded actual costs”
  • Therefore, the bill includes language that would allow HUD, at its discretion, to sweep residual receipts from 202 properties to use for Section 202 PRACs and capital advances
• Senate’s FY 2013 proposal for Section 202: $375 million
  • Includes full funding for all PRACs, no funding for capital advances, $70 million for service coordinators, and $20 million for assisted living conversion grants
• FY 2013 HUD budget request: $475 million; includes full funding for all PRACs, $90 million for service coordinators, and $100 million for operational assistance
• FY 2012 appropriations: $375 million; includes full funding for all PRACs and $90 million for service coordinators
  
  
• House’s FY 2013 proposal for Section 811: $165 million
  • Includes full funding for all PRACs, no direct funding for capital advances
  • Senate’s FY 2013 proposal for Section 811: $150 million
    • Includes full funding for all PRACs, no funding for capital advances
  • FY 2013 HUD budget request: $150 million; includes full funding for all PRACs and no funding for capital advances
  • FY 2012 appropriations: $165 million; includes full funding for all PRACs and some funding for capital advances
    
    
• House’s FY 2013 proposal for HOME: $1.2 billion          
  • Senate’s FY 2013 proposal for HOME: $1 billion         
  • FY 2013 HUD budget request: $1 billion
  • FY 2012 appropriations: $1 billion
    
    
• House’s FY 2013 proposal for CDBG: $3.3 billion           
  • Senate’s FY 2013 proposal for CDBG: $3.1 billion
  • FY 2013 HUD budget request: $2.95 billion
  • FY 2012 appropriations: $2.95 billion
    
    
• House’s FY 2013 proposal for Choice Neighborhoods: $0
  • The House Appropriations Committee does not provide any funding for the Choice Neighborhoods Initiative since it remains unauthorized.  It believes the goals of the program can also be achieved through HOME and CDBG.
  • Senate’s FY 2013 proposal for Choice Neighborhoods: $120 million
  • FY 2013 HUD budget request: $150 million
  • FY 2012 appropriations: $120 million
    
    
• House’s FY 2013 proposal for LEP: $300,000 (for the creation and promotion of translated materials and other programs)
  • Senate’s FY 2013 proposal for LEP: $300,000
• FY 2013 HUD budget request: $500,000
• FY 2012 appropriations: $300,000

Amendments

The House adopted the following amendments to H.R. 5972:

• Rep. Mike Turner’s (R-OH) amendment that prohibited funds from implementing a prohibition or restriction on occupancy preferences for veterans’ in elderly properties;
• Rep. Scott Garrett’s (R-NJ) amendment that prohibited using funding from H.R. 5972 to implement HUD’s rule against housing discrimination based on an individual/household’s sexual orientation, published in the Federal Register last year; and
• Rep. Morgan Griffith’s (R-VA) amendment to prohibit funding for HUD’s Sustainable Communities initiative and Transportation’s Livable Communities initiative.

The House rejected the following amendments:

• Rep. Jeff Flake’s (R-AZ) amendment to cut $200 million from the HOME program and transfer the savings to the deficit reduction account;
• Rep. Paul Broun’s (R-GA) amendment to reduce administration funding for HUD’s Office of Housing by $5 million and transfer the savings to the spending reduction account;
• Rep. Jason Chaffetz’s (R-UT) amendment to reduce CDBG funding by $396 million and transfer the savings to the spending reduction account;
• Rep. Tom McClintock’s (R-CA) amendment to eliminate funding for CDBG and transfer the savings to the spending reduction account; and
• Rep. Blackburn’s amendment to reduce every account in H.R. 5972 by one percent and transfer the savings to the spending reduction account.

The Senate must still consider S. 2322, its FY 2013 Transportation-HUD Appropriations bill.  Under normal procedures, once the Senate passes S. 2322, Congress will conference the two bills and vote on the final version. However, it is possible that the Transportation-HUD Appropriations bill will be wrapped into a larger “omnibus” or “minibus” appropriations bill.  It is almost certain that HUD will be funded through a continuing resolution on October 1, probably through the November elections.

NAHMA will keep members informed as this bill moves forward in the Senate and provide information on the Congressional members selected to conference the bill when it becomes available.

House Oversight Committee Passes H.R. 4631: GSA Act

On Wednesday, the House Oversight and Government Reform Committee passed H.R. 4631, the Government Spending and Accountability (GSA) Act. The bill would limit federal agency spending for conferences and travel.  While the legislative language in H.R. 4631 is much less onerous than the Coburn/Issa amendment included in S. 1789—the 21st Century Postal Service Act—and H.R. 2146—the Data Act—NAHMA feels that the federal agency conference attendance limits and required spending reductions on travel are still problematic.

Under H.R. 4631, the definition of conference has been changed to any “meeting, retreat, seminar, symposium, or event to which an employee travels 25 miles or more to attend." This definition would include any events held for “consultation, education, discussion, or training” that are not held entirely at a government facility. This is a change from the Coburn/Issa amendment which defined conferences as any meeting held by one or more agencies, one or more non-agencies, or a combination of an agency and non-agency.

H.R. 4631 also includes less onerous reporting requirements when federal agency employees attend a conference.  Under the Coburn/Issa amendment, federal agencies would have been required to report on the cost of the conference, even if the conference was privately sponsored.  The new language would require federal agencies to provide quarterly reports on:

• Itemized expenses for conferences, including travel expenses;
• The primary sponsor, date, and location of conferences attended;
• Cost justifications for conferences where the federal agency was the primary sponsor;
• A brief explanation of how employee attendance at each event furthered the mission of the agency;
• Information on non-government employees whose conference expenses were paid for by the agency; and
• The total number of individuals whose conference expenses were paid for by the agency.

Furthermore, federal agencies must publically provide any written, digital, or A/V materials presented at a conference.

In addition, H.R. 4631 does NOT include the language from the Coburn/Issa amendment that would limit federal agency attendance to one conference per organization per year. The bill would limit the amount spent by a federal agency for a single conference at $500,000. However, the bill does not prevent private organizations from paying or defraying the costs of a conference where federal agency employees are in attendance.

NAHMA strongly opposed the Coburn/Issa federal agency conference limitation language.  For the last two months, NAHMA worked extensively with the American Society for Association Executives (ASAE), other association colleagues, and key members of Congress to modify this legislative language.  We are pleased to see that the House Oversight and Government Reform Committee and Chairman Darryl Issa (R-CA) incorporated many of our legislative recommendations in H.R. 4631, including modifying the definition of conference and eliminating the limitations of federal agency employee attendance to one conference per organization per year.  As a result, H.R. 4631, as passed by the Committee, would not discourage or limit federal agency employee attendance at NAHMA’s two Washington, DC conferences each year. 

However, we are still concerned that the travel and conference reporting requirements in H.R. 4631 could discourage federal agency employees in state and local offices from attending AHMA conferences, meetings, or trainings (including certification trainings that help HUD understand the regulations that the Department is implementing better) that are located more than 25 miles away from the federal agency employee’s home office.

NAHMA is also extremely concerned by the language included in H.R. 4631 that would cut federal agency travel budgets by 30 percent below FY 2010 spending levels.  The bill requires the Office of Management and Budget (OMB) to determine what exactly constitutes “travel expenses.” NAHMA is concerned that these cuts may be too deep and could be detrimental to the agency’s oversight responsibilities, like inspections.  We are seeking clarification with Congressional appropriators to determine what impact, if any, this legislative language might have on agencies’ oversight responsibilities if enacted.

NAHMA will continue to work with ASAE, other associations, and Congress to address our concerns with H.R. 4631.  We believe the current legislative language represents a positive step forward in addressing NAHMA’s original concerns with the Coburn/Issa amendment; however, we believe the legislative language requires additional modifications in order to ensure that:

• Federal agency employees are not discouraged from attending AHMA meetings, events, and trainings; and
• Cuts to federal agency travel spending do not negatively impact an agency’s oversight responsibilities.

We will follow up with NAHMA members in the near future through Grassroots Action Alerts to help you contact your Congressional members to request additional modifications to H.R. 4631 and any other federal agency conference and travel limitation legislative language being considered by Congress.

June 22, 2012

House Appropriations Committee Passes H.R. 5972: FY 2013 T-HUD Appropriations Bill

On Tuesday, the House Appropriations Committee passed H.R. 5972, the House’s FY 2013 T-HUD Appropriations bill. The bill provides funding for the Department of Transportation and HUD programs in the coming fiscal year.

Project-Based Section 8 Funding

H.R. 5972 provides $8.7 billion for the project-based Section 8 program, with $8.44 billion set aside for contract renewals in FY 2013.  This amount is NOT enough to fully fund all project-based Section 8 contracts for their 12-month terms at renewal. In fact, this is $611 million below the FY 2012 appropriations and is $1.1 billion below the Senate’s proposed FY 2013 appropriation.  The $8.7 billion was originally requested in HUD’s FY 2013 budget earlier this year. If the funding level currently included in H.R. 5972 is enacted, it will only fund contract renewals through the end of the fiscal year (September 30, 2013) instead of their full 12-month terms at renewal.  About two-thirds of all project-based Section 8 contracts would receive 9 months of funding or less, depending on what month the contract renews in 2013.

Rep. Barbara Lee (D-CA) offered an amendment to H.R. 5972 that would fully fund the project-based Section 8 program at $9.875 billion. Because the amendment did not include an “offset” to pay for the increased funding, key Committee members objected.  They argued that the amendment would take the overall cost of the FY 2013 T-HUD bill above the House’s 302(b) allocation—the budget authority given to the House T-HUD appropriations account. 

House Appropriations T-HUD Subcommittee Ranking Member John Olver (D-MA) supported the Lee Amendment and included an industry letter, which NAHMA signed on to, in support of full-funding for the program.  A copy of that letter may be found here: http://www.nahma.org/content/Grassroots%20Files/PBRA%20letter%20for%20House%20Approps%20FY13%20June.pdf.

Ranking Member Olver reminded the Committee that short-funding had occurred in the past and only created problems for the effective operation of the project-based Section 8 program.  Ranking Member Olver pointed out that short-funding does not save any money; it only shifts funding needs into the next fiscal year.  Nevertheless, he recognized
that H.R. 5972 could not be taken to the House floor if the Lee Amendment was adopted because the cost of the bill would be above the House’s 302(b) allocation.

House Appropriations T-HUD Subcommittee Chairman Tom Latham opposed the Lee amendment.  He was concerned that it contained no offset.  He defended the project-based Section 8 funding level in H.R. 5972, as passed by the House Appropriations T-HUD Subcommittee, saying it was the same level as the President’s FY 2013 request, would not reduce available housing stock to low-income families, and would meet the needs of the contract renewals through the end of FY 2013. The Lee Amendment was voted down by a voice vote in the full Committee.

NAHMA strongly opposes providing anything less than full-funding for the project-based Section 8 program.  We support the funding level of $9.88 billion which includes $9.62 billion for contract renewals, provided in S. 2322, the Senate’s FY 2013 T-HUD bill. As a result, we will continue to work with Congress and our industry colleagues to amend the House bill or ensure the Senate funding level is included in the conferenced FY 2013 T-HUD appropriations bill.

In addition, H.R. 5972 included the following legislative language in the project-based Section 8 account:

“That, notwithstanding any other provision of law, upon the request of the Secretary of Housing and Urban Development, project funds that are held in residual receipts accounts for any project subject to a section 8 project-based Housing Assistance Payments contract that authorizes HUD to require that surplus project funds be deposited in an interest-bearing residual receipts account and that are in excess of an amount to be determined by the Secretary, shall be remitted to the Department and deposited in this account, to be available until expended.”
HUD requested this authority in its FY 2013 budget as a “cost savings” measure.  This language was also included in S. 2322.
Nevertheless, there is some good news.  H.R. 5972 does NOT include the Senate’s “troubled properties” language, which would require HUD to take more aggressive actions against owners when properties fail REAC inspections.
Other Programs

H.R. 5972 would provide the following funding amounts for multifamily HUD programs in FY 2013:

• House’s FY 2013 proposal for Tenant-Based Section 8: $19.1 billion (total); $17.2 billion for voucher contract renewals
  • Senate’s FY 2013 proposal for Tenant-Based Section 8: $19.4 billion (total); $17.5 for voucher contract renewals
  • FY 2013 HUD budget request: $19.07 billion (total); $17.24 billion for voucher contract renewals
  • FY 2012 appropriations: $18.9 billion (total); $17.24 billion (contract renewals)
• House’s FY 2013 proposal for Section 202: $425 million
  • Includes full funding for all PRACs, authorizes continued funding for Senior Preservation Rental Assistance Contracts (SPRAC), $50 million for capital advances, and $90 million for service coordinators
  • In the Committee report, the House Appropriations Committee claims that the Section 202 PRAC properties’ residual receipts accounts “have accumulated in situations where the subsidies and tenant rent payments provided have exceeded actual costs”
  • Therefore, the bill includes language that would allow HUD, at its discretion, to sweep residual receipts from 202 properties to use for Section 202 PRACs and capital advances
• Senate’s FY 2013 proposal for Section 202: $375 million
  • Includes full funding for all PRACs, no funding for capital advances, $70 million for service coordinators, and $20 million for assisted living conversion grants
• FY 2013 HUD budget request: $475 million; includes full funding for all PRACs, $90 million for service coordinators, and $100 million for operational assistance
• FY 2012 appropriations: $375 million; includes full funding for all PRACs and $90 million for service coordinators
• House’s FY 2013 proposal for Section 811: $165 million
  • Includes full funding for all PRACs, no direct funding for capital advances
  • Senate’s FY 2013 proposal for Section 811: $150 million
    • Includes full funding for all PRACs, no funding for capital advances
  • FY 2013 HUD budget request: $150 million; includes full funding for all PRACs and no funding for capital advances
  • FY 2012 appropriations: $165 million; includes full funding for all PRACs and some funding for capital advances
• House’s FY 2013 proposal for HOME: $1.2 billion          
  • Senate’s FY 2013 proposal for HOME: $1 billion         
  • FY 2013 HUD budget request: $1 billion
  • FY 2012 appropriations: $1 billion
• House’s FY 2013 proposal for CDBG: $3.3 billion           
  • Senate’s FY 2013 proposal for CDBG: $3.1 billion
  • FY 2013 HUD budget request: $2.95 billion
  • FY 2012 appropriations: $2.95 billion
• House’s FY 2013 proposal for Choice Neighborhoods: $0
  • The House Appropriations Committee does not provide any funding for the Choice Neighborhoods Initiative since it remains unauthorized.  It believes the goals of the program can also be achieved through HOME and CDBG.
  • Senate’s FY 2013 proposal for Choice Neighborhoods: $120 million
  • FY 2013 HUD budget request: $150 million
  • FY 2012 appropriations: $120 million
• House’s FY 2013 proposal for LEP: $300,000 (for the creation and promotion of translated materials and other programs)
  • Senate’s FY 2013 proposal for LEP: $300,000
• FY 2013 HUD budget request: $500,000
• FY 2012 appropriations: $300,000

NAHMA members will also be interested to know that Rep. Jeff Flake (R-AZ) introduced an amendment to cut $200 million from the HOME program and transfer the savings to the deficit reduction account. Rep. Flake felt that the Committee should not be increasing funding for the HOME program in FY 2013 over FY 2012 levels when HUD has yet to implement reforms to increase transparency and accountability in the program.  The Flake Amendment was voted down by a voice vote in the Committee.

A copy of the House’s FY 2013 T-HUD appropriations bill language is located here: http://appropriations.house.gov/uploadedfiles/bills-112hr-fc-ap-fy13-thud.pdf

A copy of the FY T-HUD appropriations bill Committee report language may be found here: http://appropriations.house.gov/uploadedfiles/hrpt-112-ap-fy13-thud.pdf

The bill could be considered on the House floor as early as next week.

NAHMA Response

Again, NAHMA opposes the proposed funding levels for the project-based Section 8 program in H.R. 5972.  We will continue to work with Congressional appropriators and our industry colleagues to ensure full-funding for all rental assistance contracts in FY 2013 and adequate funding for all of HUD’s new construction and rehabilitation programs.

House Appropriations Committee Passes H.R. 5973: FY 2013 Agriculture Appropriations Bill

On Tuesday, the House Appropriations Committee passed H.R. 5973, the House’s FY 2013 Agriculture Appropriations bill. The bill provides funding for USDA programs, including rural multifamily housing programs administered by the Rural Housing Service (RHS), in the coming fiscal year.

H.R. 5973 included an amendment from Rep. Mike Simpson (R-ID) that increased funding for Section 521 Rural Rental Assistance an additional $1.5 million above the $887 million approved by the House Appropriations Agriculture Subcommittee.  The amendment was agreed to by a unanimous voice vote in the Committee.

H.R. 5973 would provide the following funding levels for multifamily rural housing programs:

• House’s FY 2013 proposal for Section 521 Rural Rental Assistance: $889 million
  • Senate’s FY 2013 proposal for Section 521 Rural Rental Assistance: $907 million
• FY 2013 Budget Request: $907 million
• FY 2012 Appropriation: $905 million

• House’s FY 2013 proposal for Section 515 Housing Direct Loans: $31.2 million
  • Senate’s FY 2013 proposal for Section 515 Housing Direct Loans: $28.4 million
• FY 2013 Budget Request: $0
• FY 2012 Appropriation: $69.5 million

• House’s FY 2013 proposal for Section 538 Housing Loan Guarantees: $150 million
  • Senate’s FY 2013 proposal for Section 538 Housing Loan Guarantees: $150 million
• FY 2013 Budget Request:  $150 million
• FY 2012 Appropriation: $130 million
• House’s FY 2013 proposal for Multifamily Housing Revitalization Program: $12.7 million; $10.8 million for vouchers; $2 million for the preservation demonstration
  • Senate’s FY 2013 proposal for Multifamily Housing Revitalization Program: $27.8 million; $16.8 million for the preservation demonstration and $11 million for vouchers
  • FY 2013 Budget Request:  $46.9 million; $34.4 million for the revitalization program and $12.6 million for vouchers
  • FY 2012 Appropriation: $13 million; $11 million for vouchers and $2 million for the demonstration program

For a copy of the full bill text, please visit: http://appropriations.house.gov/uploadedfiles/bills-112hr-fc-ap-fy13-agriculture.pdf

For a copy of the Committee report on the bill, please visit: http://appropriations.house.gov/uploadedfiles/hrpt-112-ap-fy13-agriculture.pdf
H.R. 5973 could be considered on the House floor as early as next week.

S. 3283: Ending Housing Discrimination Against Servicemembers and Veterans Act of 2012

Last week, Senate Scott Brown (R-MA) introduced S. 3283, the Ending Housing Discrimination Against Servicemembers and Veterans Act of 2012.  The bill would amend the Fair Housing Act to prevent discrimination against veterans and service members trying to purchase or rent housing.

The bill has been referred to the Senate Banking Committee.

June 8, 2012

House Appropriations T-HUD Subcommittee Passes Draft FY 2013 T-HUD Bill

Yesterday, the House Appropriations T-HUD Subcommittee passed its FY 2013 T-HUD Appropriations bill, which provides funding for the Department of Transportation and HUD programs in the coming fiscal year.

Project-Based Section 8 Funding

The bill provides $8.7 billion for the project-based Section 8 program, with $8.44 billion set aside for contract renewals in FY 2013.  This amount is NOT enough to fully fund all project-based Section 8 contracts for their 12-month terms at renewal. In fact, this is $611 million below the FY 2012 appropriations and is $1.1 billion below the Senate’s proposed FY 2013 appropriation.  The $8.7 billion was originally requested in HUD’s FY 2013 budget earlier this year. If this appropriation is enacted, it will only fund contract renewals through the end of the fiscal year (September 30, 2013) instead of their full 12-month terms at renewal.  About two-thirds of all project-based Section 8 contracts would receive 9 months of funding or less, depending on what month the contract renews in 2013.

NAHMA strongly opposes providing anything less than full-funding for the project-based Section 8 program.  We support the funding level of $9.88 billion which includes $9.62 billion for contract renewals that was provided in S. 2322, the Senate’s FY 2013 T-HUD bill. As a result, we will continue to work with Congress and our industry colleagues to amend the House bill or ensure the Senate funding level is included in the conferenced FY 2013 T-HUD appropriations bill.

In addition, the House Appropriations T-HUD Subcommittee included the following legislative language in the project-based Section 8 account:

“That, notwithstanding any other provision of law, upon the request of the Secretary of Housing and Urban Development, project funds that are held in residual receipts accounts for any project subject to a section 8 project-based Housing Assistance Payments contract that authorizes HUD to require that surplus project funds be deposited in an interest-bearing residual receipts account and that are in excess of an amount to be determined by the Secretary, shall be remitted to the Department and deposited in this account, to be available until expended.”

HUD requested this authority in its FY 2013 budget as a “cost savings” measure.  This language was also included in S. 2322.

Nevertheless, there is some good news.  The Subcommittee did NOT include the Senate’s “troubled properties” language, which would require HUD to take more aggressive actions against owners when properties fail REAC inspections.

Other Programs

The House’s draft FY 2013 Transportation-HUD appropriation bill would provide the following funding amounts for multifamily HUD programs in FY 2013:

• House’s FY 2013 proposal for Tenant-Based Section 8: $19.1 billion (total); $17.2 billion for voucher contract renewals
  • Senate’s FY 2013 proposal for Tenant-Based Section 8: $19.4 billion (total); $17.5 for voucher contract renewals
  • FY 2013 HUD budget request: $19.07 billion (total); $17.24 billion for voucher contract renewals
  • FY 2012 appropriations: $18.9 billion (total); $17.24 billion (contract renewals)
• House’s FY 2013 proposal for Section 202: $425 million
  • Includes full funding for all PRACs, authorizes continued funding for Senior Preservation Rental Assistance Contracts (SPRAC), no direct funding for capital advances, and $90 million for service coordinators
  • Includes language that would allow HUD, at its discretion, to sweep residual receipts from 202 properties to use for Section 202 PRACs and capital advances
  • Senate’s FY 2013 proposal for Section 202: $375 million
    • Includes full funding for all PRACs, no funding for capital advances, $70 million for service coordinators, and $20 million for assisted living conversion grants
  • FY 2013 HUD budget request: $475 million; includes full funding for all PRACs, $90 million for service coordinators, and $100 million for operational assistance
  • FY 2012 appropriations: $375 million; includes full funding for all PRACs and $90 million for service coordinators
• House’s FY 2013 proposal for Section 811: $165 million
  • Includes full funding for all PRACs, no direct funding for capital advances
  • Senate’s FY 2013 proposal for Section 811: $150 million
    • Includes full funding for all PRACs, no funding for capital advances
  • FY 2013 HUD budget request: $150 million; includes full funding for all PRACs and no funding for capital advances
  • FY 2012 appropriations: $165 million; includes full funding for all PRACs and some funding for capital advances
• House’s FY 2013 proposal for HOME: $1.2 billion          
  • Senate’s FY 2013 proposal for HOME: $1 billion         
  • FY 2013 HUD budget request: $1 billion
  • FY 2012 appropriations: $1 billion
• House’s FY 2013 proposal for CDBG: $3.3 billion           
  • Senate’s FY 2013 proposal for CDBG: $3.1 billion
  • FY 2013 HUD budget request: $2.95 billion
  • FY 2012 appropriations: $2.95 billion
• House’s FY 2013 proposal for Choice Neighborhoods: $0
  • Senate’s FY 2013 proposal for Choice Neighborhoods: $120 million
  • FY 2013 HUD budget request: $150 million
  • FY 2012 appropriations: $120 million
• House’s FY 2013 proposal for LEP: $300,000 (for the creation and promotion of translated materials and other programs)
  • Senate’s FY 2013 proposal for LEP: $300,000
  • FY 2013 HUD budget request: $500,000
  • FY 2012 appropriations: $300,00

A copy of the FY 2013 T-HUD appropriations bill language from the Subcommittee is located here: http://appropriations.house.gov/UploadedFiles/BILLS-112HR-SC-AP-FY13-THUD.pdf

The full House Appropriations Committee plans to mark up the FY 2013 T-HUD appropriations bill in about two weeks.

NAHMA Response

Again, NAHMA opposes the proposed funding levels for the project-based Section 8 program in the House’s FY 2013 Transportation-HUD bill.  We will continue to fight the proposed short-funding in the House as the bill works its way through the House Appropriations Committee and on the floor.  We will also continue to work with Congressional appropriators and our industry colleagues to ensure full-funding for all rental assistance contracts in FY 2013 and adequate funding for all of HUD’s new construction and rehabilitation programs.

In the meantime, we strongly encourage you to contact your Representatives if they sit on the House Appropriations Committee (please find a list of the Congressional Members that sit on the House Appropriations Committee below).  Let your Representatives know that you oppose the short-funding of the project-based Section 8 program proposed in the House’s draft FY 2013 Transportation-HUD bill. Please urge your Representatives to restore $1.2 billion to the project-based Section 8 account and fully-fund the program at $9.875 billion, the level provided by the Senate Appropriations Committee in S. 2322—the Senate’s version of the FY 2013 Transportation-HUD Appropriations bill. In addition, please share your past experiences with the project-based Section 8 shortfall.

The following Congressional Representatives sit on the House Appropriations Committee:

For talking points about short funding the project-based Section 8 contract renewals in FY 2013, including a phone script and model letters to use when contacting your Congressional delegation, please visit: http://www.nahma.org/content/grassroots_PBS8.html

If you would like to contact your Member of the House of Representatives, please visit: http://www.house.gov/writerep/

For more information meeting with your Representatives and for additional information on affordable housing issues, please visit: http://www.nahma.org/content/grassroots.html

House Appropriations Agriculture Subcommittee Passes Draft FY 2013 Agriculture Bill

On Wednesday, the House Appropriations Agriculture Subcommittee passed its FY 2013 Agriculture Appropriations bill, which provides funding for USDA programs, including rural multifamily housing programs administered by the Rural Housing Service (RHS), in the coming fiscal year.

The bill would provide the following funding levels for multifamily rural housing programs:

• House’s FY 2013 proposal for Section 521 Rural Rental Assistance: $887 million
  • Senate’s FY 2013 proposal for Section 521 Rural Rental Assistance: $907 million
• FY 2013 Budget Request: $907 million
• FY 2012 Appropriation: $905 million

• House’s FY 2013 proposal for Section 515 Housing Direct Loans: $31.2 million
  • Senate’s FY 2013 proposal for Section 515 Housing Direct Loans: $28.4 million
• FY 2013 Budget Request: $0
• FY 2012 Appropriation: $69.5 million

• House’s FY 2013 proposal for Section 538 Housing Loan Guarantees: $150 million
  • Senate’s FY 2013 proposal for Section 538 Housing Loan Guarantees: $150 million
• FY 2013 Budget Request:  $150 million
• FY 2012 Appropriation: $130 million
• House’s FY 2013 proposal for Multifamily Housing Revitalization Program: $12.7 million; $10.8 million for vouchers; $2 million for the preservation demonstration
  • Senate’s FY 2013 proposal for Multifamily Housing Revitalization Program: $27.8 million; $16.8 million for the preservation demonstration and $11 million for vouchers
  • FY 2013 Budget Request:  $46.9 million; $34.4 million for the revitalization program and $12.6 million for vouchers
  • FY 2012 Appropriation: $13 million; $11 million for vouchers and $2 million for the demonstration program

For a copy of the full bill text, please visit: http://appropriations.house.gov/UploadedFiles/BILLS-112-HR-SC-AP-FY13-Agriculture.pdf

The full House Appropriations Committee plans to mark up the FY 2013 Agriculture appropriations bill in about two weeks.

HFSC Multifamily Insurance Program Oversight Hearing

Yesterday, the House Financial Services Insurance, Housing, and Community Opportunity Subcommittee held an oversight hearing HUD’s multifamily insurance programs.  Testimony was given by HUD Multifamily DAS Marie Head, industry stakeholders, business trade associations, and economic experts.

HUD and industry stakeholders—including the National Housing Trust (NHT), the National Low-Income Housing Coalition (NLIHC), the Mortgage Bankers Association (MBA), the National Multi Housing Council (NMHC), the National Apartment Association (NA), the National Council of State Housing Agencies (NCSHA), and the National Association of Home Builders (NAHB)— strongly supported the continued operation of the Federal Housing Administration (FHA) in the multifamily mortgage and insurance markets. They believed FHA provided much needed liquidity in the multifamily market, and stated that there was very little participation in the market by private lenders.

However, Joseph Pagliari, a Clinical Professor of Real Estate from the University of Chicago, and Peter Schiff, the CEO of Euro Pacific Capital, both opposed the operation of FHA in the mortgage market, and called for its elimination. They both believed that, if FHA and the GSEs were eliminated, the private market would come in to fill the void for multifamily and affordable housing mortgage loans and insurance packages.

During the hearing, NHT and NAHB publically opposed providing less than 12-months of funding for the project-based Section 8 program in FY 2013.  They stated that providing less than 12 months of funding would only increase the program’s cost in the following fiscal year. They believed that short-funding the program would not only harm the residents, but would increase the risk of mortgage default within the program.  This would devastate FHA in particular because of its significant exposure—over $13 billion—in Section 8 housing insurance.

HUD Multifamily DAS Head focused the majority of her remarks on the need to increase multifamily mortgage insurance premiums (MIP) in order to reflect the actual risk in the market. She said the increase would have no impact on development costs or rents.  DAS Head also stated that MIPs for affordable housing projects (such as those with HUD rental subsidies and low income housing tax credits, as well as those insured under FHA risk-sharing programs) would not be increased under the proposal.  Nevertheless, MBA, NMHC, NAA, and NAHB opposed HUD’s proposal to raise multifamily MIPs.  They did not believe HUD’s justification for the increase was compelling, nor did they believe the proposed MIP increase accurately reflected the additional insurance risk.  NAHMA signed on to previous industry comments opposing the increase.  A copy of those comments may be found here: http://www.nahma.org/member/New%20HUD%20Docs/MIP%20Final%20Industry%20Letter.pdf

HUD, NCSHA, NLIHC, NHT, and NAHB all called on the Committee to move legislation forward that would allow Ginnie Mae to securitize FHA-Housing Finance Authority (HFA) risk-sharing loans. These groups emphasized that enacting this new program would come at no additional cost to the tax payer and would provide a much needed tool to expanding the number of affordable housing units available. NAHMA also supports such legislation.

Finally, NLIHC focused on the need for Congress to capitalize the National Affordable Housing Trust Fund.

For more information on this hearing, including a copy of the hearing webcast and copies of the witnesses’ testimonies, please visit: http://financialservices.house.gov/Calendar/EventSingle.aspx?EventID=297671

CCR to Be Consolidated into SAM

At the end of July, the Obama Administration will consolidate the following General Services Administration (GSA)-maintained contractor databases into the new System for Award Management (SAM): Central Contractor Registration (CCR), Online Representations and Certifications Application (ORCA), FedReg, Excluded Parties List System (EPLS), Federal Parent Locator Service (FPLS), Catalog of Federal Domestic Assistance (CFDA), Electronic Subcontracting Reporting System (eSRS), Federal Business Opportunities (FBO), Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), Past Performance Information Retrieval System (PPIRS), and Wage Determination Online (WDOL).

NAHMA members may recall that in order to receive a HAP payment for project-based Section 8, Section 202/811 PRACs, RAP, and Rent Supp contracts they must have a Dun and Bradstreet (DUNS) Number and register with the CCR.

In many cases, contractors—like NAHMA members receiving HAP payments—will not have to do anything. The data is supposed to be automatically migrated from the expiring systems into SAM.  However, the Federal government has encouraged contractors to verify that their data in the affected databases is correct or, if a contractor’s database registration is set to expire in July or August, renew that registration before the transfer occurs in July in order to avoid potential issues.

The transition to SAM was originally supposed to occur over Memorial Day weekend but has been pushed back to late July due to technological glitches.

SAM will allow users to use a single log in to access all of these systems.

May 18, 2012

H.R. 4970: Violence Against Women Reauthorization Act

On Wednesday, the House passed the Republican backed version of the Violence Against Women Reauthorization Act (VAWA), H.R. 4970, on a mostly party line vote of 222-205. The legislation would reauthorize and update the 1994 VAWA law. The bill includes provisions that would expand housing rights of victims of domestic violence, dating violence, sexual assault, and stalking residing in federally assisted properties. 

The housing provisions in H.R. 4970 and the Senate VAWA bill, S. 1925, would:

• Extend the VAWA’s protections to victims of sexual assault;
• In addition to the Section 8 program, extend VAWA’s protections to new federal housing programs including:
  • Section 202 and 811;
  • Homelessness assistance;
  • Section 236;
  • HOME;
  • Public housing;
  • All rural housing programs administered by USDA-RD; and
  • The LIHTC.
• Allow third-party verification when VAWA verification documentation contains conflicting information;
• Require HUD to make VAWA rights notifications publically available and translate the notices in multiple languages; and
• Prevent the recapturing of LIHTCs because of non-compliance issues.

H.R. 4970 includes language that fixes NAHMA and industry stakeholders’ major concerns issues with the emergency transfer and notification provisions included in S. 1925. 

First, H.R. 4970 as passed by the House would make relevant agencies responsible for developing model emergency relocation and transfer policies that would be voluntary for PHAs and O/As of assisted properties to adopt. NAHMA was concerned that the emergency transfer language in S. 1925 and H.R. 4271 would not be feasible to implement in all cases because O/As cannot a “transfer” tenants between properties. 

Second, H.R. 4970 would only require tenant notification of their rights under VAWA when an applicant is denied admission to a covered affordable housing program and at move-in. The notifications would be included in other HUD documents given to tenants, like the Tenants Rights and Responsibilities guide, as required by law. S. 1925 would have required that tenants be notified of their VAWA rights at eviction as well. H.R. 4970 does not include the requirement to give the VAWA certification form in conjunction with the rights notification that was in S. 1925.

Although the bill is not perfect, the housing provisions in H.R. 4970, as passed by the House, represent significant improvement over the emergency transfer and notification provisions in S. 1925.

House Democrats opposed H.R. 4970 because it reduces, and in some cases eliminates, the expansion of VAWA rights to illegal immigrants, Native Americans, and same-sex couples that was included in S. 1925, as passed by the Senate. 

The White House has stated that if the Senate passes H.R. 4970, as passed by the House, that President Obama would veto the bill.  In its statement of opposition to H.R., 4970, the Obama Administration said Rep. Sandy Adam’s (R-FL) bill “weakens resources for victims living in subsidized housing” when compared to the housing provisions in S. 1925, as passed by the Senate.  A copy of that statement may be found here: http://www.whitehouse.gov/blog/2012/05/14/addressing-violence-against-native-women-violence-against-women-act-reauthorization

S. 1925 and H.R. 4970 will now go to conference.  Neither the Senate nor the House has chosen their conferees for this task.  Furthermore, House Republicans and Senate Democrats plan to use VAWA as a political chess piece in their efforts to garner support for their own parties leading up to the 2012 national elections in November.  Even if the House and Senate can conference their bills, the reauthorization of VAWA may take some time.

NAHMA will keep members informed as Congress moves forward with its consideration of any VAWA bill.

Senate Turns Down Multiple FY 2013 Budget Resolutions

On Wednesday, the Senate voted down five different budget resolutions for FY 2013. The budget resolution establishes non-binding spending ceilings for discretionary programs and establishes limits for total government revenue and mandatory spending for FY 2013. 

President’s FY 2013 Budget Resolution

The chamber unanimously rejected S. Con. Res. 41, which contained the President’s FY 2013 Budget Request. For more information on the President’s FY 2013 budget request, please click here: http://www.nahma.org/executive/insider.2012.html#217budget

House’s FY 2013 Budget Resolution

The Senate also voted down H. Con. Res. 112, the FY 2013 budget resolution that passed the House in March, by a vote of 41 to 58. The House’s FY 2013 budget resolution contained the spending caps—$949 billion in discretionary spending for FY 2013—that were proposed in House Budget Committee Chairman Paul Ryan’s “The Path to Prosperity” budget proposal.  This is $98 billion below the pre-sequestration discretionary spending caps Congress agreed to in the Budget Control Act (BCA) last August.  For more information on H. Con. Res. 112, please click here: http://www.nahma.org/executive/insider.2012.html#330budget

Toomey’s FY 2013 Budget Resolution

The Senate rejected S. Con. Res. 37, Sen. Pat Toomey’s (R-PA) “Restoring Balance” proposal for the FY 2013 budget.  Sen. Toomey claims his plan would balance the budget in eight years by reducing the total level of government spending to 18.3 percent of the GDP.  The budget proposal places caps on manadatory spending through FY 2020 and freezes discretionary spending at FY 2006 levels through FY 2020.  The proposal would repeal the sequestration requirements for defense spending but maintain the other spending caps required in the Budget Control Act (BCA).  The budget resolution would have also reduced welfare spending in the income security account (which contains federally assisted housing programs) and block granted mandatory welfare programs to state and local government.  However, the plan does not specifically identify which welfare programs would be targeted for block granting.  If this proposal was enacted, it would significantly reduce non-security discretionary spending over the next eight years, which would limit the funding available for federally-assisted housing programs.  This could devastate the affordable housing portfolio and likely reduce the funding currently available to low-income families, meaning fewer families would receive assistance.

The Toomey proposal also calls for tax reform by reducing individual marginal tax rates to 20 percent and corporate tax rates to 25 percent.  It would extend the Bush tax cuts indefinitely for all income levels.

Finally the Toomey budget resolution would have enacted medical malpractice reforms, block granted the Medicaid program, required wealthier Americans to pay more for Medicare, eliminate duplicative government programs identified by the Government Accountability Office (GAO), repeal the Affordable Care Act, and reform federal employee health and pension benefits.

It is extremely important to note that, out of all the budget resolution proposals the Senate voted on, this received the most support, primarily from Republicans.

More information on the Toomey “Restoring Balance” proposal can be found here: http://www.toomey.senate.gov/pdf/restoringbalance.pdf

Paul’s FY 2013 Budget Resolution

The Senate overwhelming voted down S. Con. Res. 42, the FY 2013 budget proposal from Sen. Rand Paul (R-KY) called “A Platform to Revitalize America,” by a vote of 16 to 83.

Paul claims his proposal would balance the budget in five years by reducing discretionary spending to FY 2008 levels and eliminating a number of agencies, including HUD. The proposal would repeal the sequestration requirements for defense spending, eliminate the Davis-Bacon wage requirements, and sell off Fannie Mae and Freddie Mac.

The Paul proposal would also block grant Medicaid, SCHIP, foods stamps, and child nutrition to state and local governments.  It reforms social security by increasing the beneficiary age over time, while limiting benefits based on income, and gives seniors the option of accepting the same health care plan as Members of Congress.  The proposal freezes foreign aid spending to $5 billion a year and eliminates duplicative government programs identified by the GAO.  “A Platform to Revitalize America” called for the repeal of the Affordable Care Act and Dodd-Frank and enacts existing proposals to increase oil and gas production in the United States.
The Paul proposal also calls for a flat 17 percent tax on both individuals and corporations.
For more information about the Paul proposal, please visit: http://paul.senate.gov/?p=press_release&id=523

Lee’s FY 2013 Budget Resolution

Finally, the Senate overwhelming rejected S. Con. Res. 44, the FY 2013 budget resolution introduced by Sen. Mike Lee (R-UT) called “Saving the American Dream” by a vote of 17 to 82.  The Lee plan would balance the federal budget by 2017 by reducing spending to 17.8 percent of GDP.  The proposal would significantly reduce the budget authority for the income security account, which provides the budget authority for federally subsidized housing programs, from FY 2012 levels. These types of cuts could devastate the affordable housing portfolio and could likely reduce the funding currently available to low-income families, meaning fewer families would receive assistance.

The Lee proposal includes reforms that would lower tax rates to a flat tax of 25 percent for both businesses and individuals.  It would eliminate all tax loopholes except for the health insurance and earned income tax credits and allow deductions for mortgage interest, higher education, and charity.  This means that the “Saving the American Dream” proposal would eliminate the LIHTC, which NAHMA opposes

In terms of social security, the proposal would gradually increase the retirement age and reduce benefits for higher-income families.  It would transition Medicare to a defined contribution premium support plan and cap total Medicare spending and physician payments. The Lee proposal would also block grant Medicaid to state and local governments and cap spending for the program at FY 2007 levels, while providing an additional tax credit for the purchase of health insurance. Finally, the proposal would repeal the Davis-Bacon wage requirements and prohibit any advanced appropriations.

For more information on the proposal, please click here: http://www.lee.senate.gov/public/index.cfm/saving-the-american-dream

Appropriations Action So Far

The Senate is currently working with the discretionary spending caps set by Section 1 of the BCA, passed last August, of $1.047 trillion for FY 2013.  Both the FY 2013 appropriations bills for Agriculture and Transportation-HUD have passed the Senate Appropriations Committee.  The bills could be considered by the full chamber as early as next week.

For more information about S. 2322, the FY 2013 Transportation-HUD Bill, please click here: http://www.nahma.org/executive/insider.2012.html#420s2322

For more information about S. 2375, the FY 2013 Agriculture Bill, please click here: http://www.nahma.org/executive/insider.2012.html#427fy2013

The House Appropriations Transportation-HUD Subcommittee is planning on marking up its FY 2013 Transportation-HUD appropriations bill in early June.  The House bill will include a $2 billion cut to its budget authority for FY 2013.

This means that the House and Senate are writing their respective FY 2013 appropriations bills using different discretionary spending caps, which will make it more difficult to reconcile the appropriations bills, including those funding HUD and USDA programs.  This increases the likelihood that Congress will need to approve a continuing resolution to fund government programs for the first few months of FY 2013, which begins on October 1, 2012.

NAHMA Member Grassroots Action

Even though these five FY 2013 budget resolutions did not pass the Senate, it is extremely important that Members of Congress completely understand how the discretionary spending cuts proposed in these budget resolutions could impact services in their Districts and states.  NAHMA greatly needs your assistance to help educate Congressional Members on the importance of funding affordable housing and convince more Members to support these critical programs in FY 2013.  To that end, we strongly encourage you and your colleagues to contact your Congressional Representatives and let them know you support a strong FY 2013 budget that provides:

• Full-funding for all 12- month contracts in the following programs:
• Project-based Section 8;
• Tenant-based Section 8;
• Section 202 and 811 PRACs; and
• Section 521 Rural rental assistance; and

• Adequate funding for affordable housing new construction and rehabilitation programs:
• HOME:
• CDBG;
• Section 202 and 811 capital advances;
• Section 515;
• Section 538; and
• USDA-RD’s Multifamily Revitalization Program.

Please also let them know you oppose any efforts to eliminate the low-income housing tax credit program. 

For talking points and information on contacting your Congressional Representatives, please visit: http://www.nahma.org/content/grassroots.html

If you have any questions, please do not hesitate to contact Michelle Kitchen (michelle.kitchen@nahma.org) or Lauren Eardensohn (lauren@nahma.org).  NAHMA staff are always happy to help guide our members through the Congressional process.

May 11, 2012

Sequestration and FY 2013 Budget Update

This week, the House passed H.R. 4966, the Sequester Replacement Act of 2012.  This legislation would replace the cuts required by the Budget Control Act (BCA) to defense and security spending with deeper cuts to non-security, discretionary spending.

It is interesting to note that the bill would technically “cap” government spending at $1.047 trillion in FY 2013.  However, it would “adjust” discretionary budget authority for the fiscal year by cutting $19.1 billion on January 2, 2013, back down to the budget authority caps approved in the House’s FY 2013 budget resolution of $1.028 trillion. 

The $19.1 billion in “savings” would be generated through cuts to program identified by the House Committees on Agriculture, Energy and Commerce, Financial Services, Judiciary, Oversight and Government Reform, and Ways and Means.  These Committees were originally directed to find this savings in the FY 2013 budget resolution passed by the House in March. The House Financial Services Committee was required to make recommendations for at least $3 billion in cuts for FY 2013. 

Fortunately, the House Financial Services Committee did not recommend cutting spending from any multifamily affordable housing programs.  Instead, they believed the savings could be achieved by passing flood insurance reform, repealing elements of the Dodd-Frank law which gave regulators powers to unwind companies that are “too big to fail,” subjecting the Consumer Financial Protection Bureau to the Congressional appropriations process, and eliminating the Home Affordable Modification Program.

Other areas identified for the sequestration offsets include:

• Eliminating several programs and rules authorized by the Obama Administration’s 2010 health care law;
• Making it harder to qualify for food stamps by restricting eligibility given to beneficiaries of other government programs, specifically the Low Income Home Energy Assistance Program;
• Repealing the Social Services block grant; and
• Requiring federal employees to increase contributions to their pensions.

The Congressional Budget Office has estimated that the bill could save up to $238 billion over the next decade.

The move would bring the House FY 2013 government spending levels in line with those being used in the Senate, at least for the first three months of the fiscal year.  However, there is still a strong possibility of a continuing resolution for the first few months of the fiscal year due to the national election in November.

However, Senate Democrats oppose many of these “savings” provisions.  Furthermore, the White House has threatened to veto any bill that alters the sequestration required under the BCA.  The bill is not likely to be enacted into law.

H.R. 4970: Violence Against Women Reauthorization Act

On Wednesday, the House Judiciary Committee passed the House Republican backed version of the Violence Against Women Reauthorization Act (VAWA), H.R. 4970, on a party line vote of 17-15.  The legislation would reauthorize and update the 1994 VAWA law.  The bill includes provisions that would expand housing rights of victims of domestic violence, dating violence, sexual assault, and stalking residing in federally assisted properties. 

House Democrats oppose H.R. 4970 because it reduces, and in some cases eliminates, the expansion of VAWA rights to illegal immigrants, Native Americans, and same-sex couples that was included in S. 1925, as passed by the Senate, and H.R. 4271, as introduced by Rep. Gwen Moore (D-WI). 

The housing provisions in H.R. 4970, S. 1925, and H.R. 4271 would:

• Extend the VAWA’s protections to victims of sexual assault;
• In addition to the Section 8 program, extend VAWA’s protections to new federal housing programs including:
• Section 202 and 811;
• Homelessness assistance;
• Section 236;
• HOME;
• Public housing;
• All rural housing programs administered by USDA-RD; and
• The LIHTC.

• Allow third-party verification when VAWA verification documentation contains conflicting information;
• Require HUD to make VAWA rights notifications publically available and translate the notices in multiple languages; and
• Prevent the recapturing of LIHTCs and/or denial of housing assistance payments because of non-compliance issues.

However, H.R. 4970 as introduced fixes NAHMA and industry stakeholder’s major issues with the emergency transfer language that was included in S. 1925 and H.R. 4271.  Relevant agencies would be responsible for developing model emergency transfer policies and procedures that would be voluntary for PHAs and O/As of assisted properties to adopt.  This deals with our concerns that emergency transfers are not feasible in all cases because O/As cannot a “transfer” tenants between properties. 

The Committee adopted Adams Amendment 1 to the bill by a voice vote.  The amendment fixes many of NAHMA and the affordable housing industries concerns with the notification provisions in previous iterations of VAWA (S. 1925 and H.R. 4271).  Specifically, tenants would be notified of their rights under VAWA when the tenant is denied admission to a covered affordable housing program and at move-in.  The notifications would be included in other HUD documents given to tenants, like the Tenants Rights and Responsibilities guide, as required by law.  The Committee eliminated the requirement for tenants to be notified of their VAWA rights at eviction and assistance termination that was included in S. 1925 and H.R. 4271.  The Committee also eliminated the requirement in S. 1925 and H.R. 4271 to give the VAWA certification form in conjunction with the rights notification.

The emergency transfer and notification language changes included in H.R. 4970, as passed by the House Judiciary Committee, alleviate the majority of NAHMA and several industry members’ concerns with the bill.  Although the bill is not perfect, the changes adopted to H.R. 4970 represent significant improvement over the previous versions of VAWA.

NAHMA signed on to an industry letter in support of the housing provisions that was sent to House Judiciary Committee leadership this week.  A copy of that letter may be found here: http://www.nahma.org/Leg%20area/Real%20Estate%20VAWA%20House%20Judiciary%20Industry%20Letter%205712.pdf

The bill will not be marked up by any other committees. House Financial Services Committee staff has informed us that bill could be considered on the House floor as soon as next week.

H.R. 4271, which is supported by Democrats, is now in limbo.  Moore’s staff has told NAHMA that they are unsure if it will move forward.

We will keep members informed as VAWA moves forward in the House.

NAHMA Signs On to Industry Multifamily Insurance Premiums Comments

This week, NAHMA signed on to an industry comment letter regarding the proposed increases to multifamily mortgage insurance premiums (MIP) that were included in HUD’s Federal Register Notice “Changes in Certain Multifamily Housing and Health Care Facility Mortgage Insurance Premiums for Fiscal Year 2013 Notice” (April 10, 2012, Docket No. FR-5634-N-01).

NAHMA and other industry members do not believe that HUD has provided compelling justification for the increases for the MIPs.  We are concerned that doing so will set a precedent by using the premiums as a means to raise funds for unrelated purposes. In fact, higher MIPs will only add to property owners’ costs, thereby increasing rents.

As a result, we believe that FHA MIPs should continue to be based on the management of risk to the government of the potential and severity of mortgage losses. The industry letter urged HUD not to implement the increases in the MIP.

A copy of that letter may be found here: http://www.nahma.org/member/New%20HUD%20Docs/MIP%20Final%20Industry%20Letter.pdf

NAHMA Sends Comments on Draft PBCA Customer Service Survey

Today, NAHMA sent comments to HUD and the Office of Management and Budget (OMB) regarding HUD’s draft PBCA Customer Service Survey (OMB Approval Number 2502-New).  The draft survey was announced in Federal Register “Notice of Proposed Information Collection for Public Comment Emergency Comment Request; Office of Housing Assistance Contract Administration Oversight, Multifamily Housing Programs” (April 24, 2012, Docket No. FR–5603–N–29). 

NAHMA originally requested that the survey be released for public comment in our July 12, 2010 comments to HUD on the draft PBCA ACC Revisions. While NAHMA strongly supports the implementation of a customer service survey in order to incentivize good PBCA relationships with property owners and management agents (O/A), we did have few concerns with the survey as drafted. Our comments specifically discussed our concerns with the methodology and the survey questions.

A copy of our comments may be found here: http://www.nahma.org/member/New%20HUD%20Docs/NAHMA%20Comments%20PBCA%20Customer%20Service%20Survey%20051112.pdf

April 27, 2012

FY 2013 Appropriations Update

House 302(b) Allocations

On Wednesday, the House Appropriations Committee passed their 302(b) allocations.  The 302(b) allocations provide the top-line funding levels for each of the 12 appropriations bills for FY 2013 and are consistent with the overall top-line discretionary spending level of $1.028 trillion approved in the House Budget Resolution last month.

The Committee has set aside $51.6 billion for the Transportation-HUD account in FY 2013.  This account provides funding for all HUD programs and activities in the coming fiscal year.  This number is $2 billion below the Senate Appropriations Committee’s FY 2013 Transportation-HUD allocation and $4 billion below the FY 2012 enacted appropriations level. 

It is important to note that the Transportation-HUD allocation fared much better in terms of cuts when compared to other appropriations accounts for FY 2013. 

Nevertheless, these cuts limit the resources available for HUD programs in FY 2013.  We have a tough battle ahead of us to ensure full-funding for rental assistance contracts, particularly the project-based Section 8 program, and adequate funding for new construction and rehabilitation programs in FY 2013. In fact, House Appropriations Transportation-HUD Subcommittee staff has told NAHMA that they are seriously considering providing less than full-funding for the project-based Section 8 program in the FY 2013 appropriations.  The staff explained to NAHMA that the ability to provide full-funding would depend on how much money they had under the 302(b) allocation for the Transportation-HUD account. Furthermore, the staff informed us that they will have a hard time justifying increasing funding for the program above the $8.7 billion requested by the FY 2013 HUD budget because no Republican has requested increased funding for the program in the upcoming fiscal year. 

HUD has admitted that at least $9.875 billion will be necessary to fully-fund all project-based Section 8 contracts for their 12-month terms at renewal in FY 2013.  The Senate Appropriations Committee has provided full funding for the program in S. 2322, its FY 2013 Transportation-HUD Appropriations bill.  The Committee passed this bill with strong bipartisan support last week.

At press time, the House Appropriations Transportation-HUD Subcommittee has not scheduled a date to mark up the FY 2013 Transportation-HUD bill. 

A Call to Action

In response to the House Appropriations Committee’s cuts to the Transportation-HUD FY 2013 allocation and concerns raised by our conversations with Committee staff discussed above, NAHMA launched an industry-wide Congressional Call-In Campaign this week to support full-funding for the project-based Section 8 program in FY 2012.

We invited our members, low-income and tenant advocacy organizations, and our industry partners to join the Congressional Call-In.  We encouraged call-in participants ask their Representatives to contact House Appropriations T-HUD Subcommittee Chair Tom Latham (R-IA), and strongly urge him to fund the project based Section 8 program at a minimum of $9.875 billion, the level provided by the Senate Appropriations Committee in S. 2322—the Senate’s version of the FY 2013 Transportation-HUD Appropriations bill.

If you have NOT contacted your Congressional Representatives to support full-funding for the project-based Section 8 program, please do so immediately! Please ask them to contact House Appropriations T-HUD Subcommittee Chair Tom Latham (R-IA), and strongly urge him to fund the project based Section 8 program at a minimum of $9.875 billion.

Please feel free to invite other interested stakeholders to call their Congressional Representatives to discuss this important issue.

For more information on contacting your Congressional Representatives, please visit:

For talking points, model letter and phone scripts for discussing the FY 2013 project-based Section 8 program appropriations, please visit: http://www.nahma.org/content/grassroots_PBS8.html.

In the meantime, NAHMA will continue to work with Congress and industry colleagues to provide strong funding levels for HUD programs in FY 2013, with a particular emphasis on providing full-funding for the project-based Section 8 program.

S. 2322: Senate’s FY 2013 Transportation-HUD Appropriations

The legislative language for S. 2322 has been published.  NAHMA has learned that the Senate Appropriations Committee has approved the following levels for Section 202, Section 811, and LEP:

• Senate’s FY 2013 proposal for Section 202: $375 million
  • Includes full funding for all PRACs, no funding for capital advances, $70 million for service coordinators, and $20 million for assisted living conversion grants
  • FY 2013 HUD budget request: $475 million; includes full funding for all PRACs, $90 million for service coordinators, and $100 million for operational assistance
  • FY 2012 appropriations: $375 million; includes full funding for all PRACs and $90 million for service coordinators
• Senate’s FY 2013 proposal for Section 811: $150 million
  • Includes full funding for all PRACs, some funding for capital advances
  • FY 2013 HUD budget request: $150 million; includes full funding for all PRACs and no funding for capital advances
  • FY 2012 appropriations: $165 million; includes full funding for all PRACs and some funding for capital advances
• Senate’s FY 2013 proposal for LEP: $300,000
  • FY 2013 HUD budget request: $500,000
  • FY 2012 appropriations: $300,000

For more information about S. 2322, including funding levels for other programs and legislative language of concern to NAHMA, please see last week’s Washington Update, located here: http://www.nahma.org/executive/insider.2012.html#420s2322

The bill will now go to the Senate floor for a vote.

S. 2375: FY 2013 Agricultural Appropriations

Yesterday, the Senate Appropriations Committee passed S. 2375, the FY 2013 Agricultural Appropriations bill.  The legislation provides funding for USDA programs, include Rural Development and Rural Housing Service.

The bill would provide the following funding levels for multifamily rural housing programs:

• FY 2013 Rural Rental Assistance: $907 million
• FY 2013 Budget Request: $907 million
• FY 2012 Appropriation: $905 million
• FY 2013 Section 515 Housing Direct Loans:  $28.4 million
• FY 2013 Budget Request:  $0 million
• FY 2012 Appropriation: $694.5 million
• FY 2013 Section 538 Housing Loan Guarantees: $150 million
• FY 2013 Budget Request:  $150 million
• FY 2012 Appropriation: $130 million
• FY 2013 Multifamily Housing Revitalization Program: $16.8 million; $11 million for vouchers
  • FY 2013 Budget Request:  $46.9 million; $34.4 million for the revitalization program and $12.6 million for vouchers
• FY 2012 Appropriation: $13 million; $11 million for vouchers and $2 million for the demonstration program

The bill will now go to the Senate floor for a vote.

S. 1925, H.R. 4271: Violence Against Women Reauthorization Act

Yesterday, the Senate passed S. 1925, the Violence Against Women Reauthorization Act.  The legislation would reauthorize and update the 1994 VAWA law.  The bill includes provisions that would expand housing rights of tenants residing in federally assisted properties who are victims of domestic violence, dating violence, sexual assault, and stalking.

Several Senate Republicans threatened to oppose S. 1925 because it would expand VAWA protections to undocumented immigrants, Indian reservation, and same-sex couples.  In response, Senator Kay Bailey Hutchison (R-TX) introduced a Republican supported version of the Violence Against Women Reauthorization (S. 2338) that would remove language dealing with same-sex couples and curtail provisions dealing with Indian reservations and undocumented workers.  However, the amendment was defeated.

There were several provisions in the bill as passed by the Senate related to affordable housing programs.  Those provisions would:

• Extend the VAWA’s protections to victims of sexual assault;
• In addition to the Section 8 program, extend VAWA’s protections to new federal housing programs including:
• Section 202 and 811;
• Homelessness assistance;
• Section 236;
• Public housing;
• All rural housing programs administered by USDA-RD; and
• The LIHTC; and
• Require HUD to establish policies and procedures for emergency transfers, which will allow victims to move to other available Federally subsidized housing units if they would remain in danger by staying in their current home.

The bill would also:

• Allow third-party verification when VAWA verification documentation contains conflicting information;
• Require HUD to make VAWA rights notifications publically available and translate the notices in multiple languages; and
• Prevent the recapturing of LIHTCs and/or denial of housing assistance payments because of non-compliance issues.

However, NAHMA remains concerned that the bill still requires HUD to develop policies and procedures for emergency transfers and requires resident notification of VAWA rights at eviction and/or when assistance is terminated.  Emergency transfers services for VAWA households are not feasible in all cases because O/As cannot a “transfer” tenants between properties. 

Unfortunately the Senate did not address the industry’s concerns with the housing provisions via amendments on the floor.  As a result, NAHMA is working with the relevant House Committees, VAWA’s Republican and Democratic sponsors in the House, and industry colleagues to ensure these issues are addressed in the House bill and the final, conferenced version of VAWA.

House Action

Rep. Sandy Adams (R-FL) plans to introduce a Republican backed version of VAWA in the House.  Rep. Adams has said that her version of the bill will be very similar to H.R. 4271, as introduced by Rep. Gwen Moore (D-WI) in March, but it will include an increased emphasis on investigations and prosecutions, consolidating certain grants, improving services for young victims and college students, and additional oversight mechanisms.  However, the bill has not been introduced at press time, nor had the legislative language been made public.  NAHMA has reached out to Rep. Adams’s office to learn more about the legislation and any provisions it might contain related to affordable housing programs.

Congress Moves to Limit Agency Attendance at Organization Conferences

In response to the General Services Administration conference spending scandal, the House and the Senate have included several provisions in moving legislation that would impose new spending limits and reporting requirements for all government employees attending meetings and conferences.

Identical language limiting conference spending and attendance for Federal agency employees was contained in H.R. 2146—the Digital Accountability and Transparency Act (DATA)—which  passed the House on Wednesday and S. 1789—the 21st Century Postal Service Act—which passed the Senate on Wednesday.

The legislative language in both bills would establish uniform standards for all recipients to report federal money and set up a single website where average Americans could search for information on how government agencies, departments and other recipients spend federal funds. It would also limit the number of annual agency conferences and the amount of money a government agency could spend on each event — no more than $500,000.
However, several of the provisions of the bill would extend to non-government conferences as well.  The provisions would:

• Cap non-military discretionary spending to attend conferences;
• Limit the number of government employees who can attend international conferences; and
• Limit participation by federal agencies to one conference sponsored by an organization per year.

NAHMA is particularly concerned about the implications of the last provision. We worry that the provision could be interpreted narrowly: if an agency employee attends one conference held by an association, no one else from that agency could attend any other events held by that association for the remainder of the year.

Under the most narrow interpretation, this would mean that if one employee from HUD, USDA, or Treasury attends one of NAHMA’s conferences, no other employees could attend ANY of NAHMA’s conferences until the following year.  As members know, the bulk of NAHMA’s conference panels are made up of Federal agency staff discussing the implications of Federal laws, regulations, and policies on affordable housing providers and services.

In addition, the legislative language also requires agencies to report online the details of each conference for which the agency paid travel expenses during the preceding three months. The report must include itemized expenses paid by the agency; the primary sponsor of the conference; the location of the conference; copies of any speeches or presentations given; and the total cost of any conference that had government speakers. This means NAHMA would be required to provide significantly detailed information regarding our conferences if any government employee attends or presents.

Senator Mark Warner (D-VA) has introduced DATA in the Senate.  He plans to include some of the legislative language changes related to conferences that passed the House. We are unsure when the Senate will begin considering this bill.  NAHMA has already reached out to Senator Warner’s office to discuss our concerns with this legislative language further.

NAHMA is extremely concerned that these provisions would have far, overreaching negative consequences on Federal agency employees’ ability to attend non-government conferences, including our own.  We will work with Members of Congress and industry colleagues to ensure that these onerous and burdensome provisions are not included in the final DATA bill.

Senate Banking Committee Holds Hearing on FY 2013 HUD Budget Proposals

Yesterday, the Senate Banking Committee held a hearing on the FY 2013 HUD Budget’s legislative proposals.  HUD Secretary Shaun Donovan provided testimony to the Committee.

Senator Jeff Merkley (D-OR) discussed HUD’s proposed short-funding of the project-based Section 8 program in its FY 2013 budget.  He said the budgetary maneuver did not reduce the real costs of the program and would just shift them to the future.  The Senator discussed how the proposed short-funding was causing uncertainty for owners participating in the program.  He also said there was a strong possibility that HUD could lose good owners and properties as a result of the program uncertainty.  Secretary Donovan said that he believed the projected receipts from the Federal Housing Administration could help cover some of the renewal costs.  He also mentioned that the Senate Appropriations Committee provided full funding for the program’s contract renewals in its FY 2013 Transportation-HUD appropriations bill, $9.875 billion.  Nevertheless, he said that HUD believe they could implement the program at the HUD budget proposed funding level of $8.7 billion without interruptions in the funding.  The Secretary admitted short-funding the program would likely cause the program uncertainty for owners and lenders that Senator Merkley described.

In addition, Senator Merkley asked the Secretary to discuss the impact of sweeping the residual receipts accounts of some project-based Section 8 properties.  The Senator was concerned that taking away funds from these accounts would limit the ability of properties to provide services to their tenants.  Secretary Donovan explained that this was a difficult decision that HUD would not have made in any other situation.  He explained that it has always been the understanding that the receipts could be recaptured by HUD.  HUD had provided consistency with the use of receipts in terms of extra activities and property improvements.  He explained that HUD was looking to sweep the excess amounts from these accounts and the Department could not let the accounts sit idle.  This was also a move of consistency, he explained.  HUD already takes excess balances from housing authorities to cover program costs.  HUD did not believe it was fair to target only housing authorities excessive balances and not look at taking the excess reserves on the project-based Section 8 side.

Senator Robert Menendez (D-NJ) asked the Secretary what the impacts of sequestration would be on HUD housing programs.  He reminded the Secretary that the House had proposed drastic cuts to non-security discretionary spending in FY 2013 and called the action “unacceptable.”  Secretary Donovan called sequestration a “bad policy.”  He said that HUD was very concerned about it and it could cause an 8 percent reduction on average in HUD programs each year through FY 2015.  He also mentioned that House Budget Committee Chairman Paul Ryan’s (R-WI) budget would require a 20 percent cut, on average, across the board to non-security discretionary spending.  The Secretary said that, potentially, this could result in over 1 million families losing their assistance and becoming homeless if the cuts go into effect.  Furthermore, the cuts would mean reduced funding to communities that depend on HUD programs to create jobs, build affordable housing, and help local economies.  Finally, the cuts would also add to the budgetary challenges HUD was already facing with the growing costs of its rental assistance programs, Donovan said.

Senator Merkley also asked that if moving to biennial inspections for the housing choice voucher program could sacrifice the quality of the units.  He said he had learned that there were some issues with the quality of units assisted by the housing choice voucher program. Secretary Donovan responded that the biennial inspections were an option, not a requirement.  HUD, under this legislative proposal, would incorporate a risk-based approach into the inspection schedule.  Units that were at risk of deteriorating quality would still be inspected annually.  Units that were in good condition could be moved to biennial inspections.  HUD was also looking at improving the housing quality standards (HQS) for voucher unit inspections by incorporating elements of the REAC scoring and processes, like reinspections and additional quality control mechanisms.  Donovan explained that HUD was looking at ways to improve the technology for both that would allow inspectors to take pictures of the units and properties. 

Committee Ranking Member Richard Shelby (R-AL) expressed concern that HUD had not done enough to deal with the growing costs of its housing programs, particularly the Federal Housing Administration (FHA).  Secretary Donovan explained that passing the draft Affordable Housing and Self Sufficiency Improvement Act, as passed by the House Financial Services  Insurance, Housing, and Community Opportunity Subcommittee would streamline the program, reduce administrative burdens, and create cost savings.  He also discussed HUD’s project-based Section 8 budget “savings” proposals, saying they would limit the growth of rents and allow HUD to offset the cost of contract renewals.

NAHMA Sends HUD Multifamily Letter on Our Concerns With the PBCA NOFA

Today, NAHMA sent a letter to HUD Multifamily DAS Marie Head and Office of Housing Assistance and Contract Administration Oversight Director Kerry Hickman regarding our concerns with the PBCA NOFA.  The letter:

• Objected to HUD’s decision to automatically reject bids from out-of-state PBCA applicants if an in-state entity applies; and
• Strongly urged HUD to amend the PBCA NOFA by removing arbitrary selection criteria which limit competition.

NAHMA also raised the issue directly with DAS Head at an industry meeting this afternoon.  However, HUD officials stated they could not discuss the issue because the NOFA has been released.

A copy of that letter is available by clicking here: http://www.nahma.org/member/New%20HUD%20Docs/NAHMA%20Concerns%20about%20PBCA%20Preferences.pdf

April 20, 2012

Senate Appropriations Committee Passes S. 2322, the FY 2013 T-HUD Bill

This week, both the Senate Appropriations T-HUD Subcommittee and the full Appropriations Committee passed the FY 2013 T-HUD Appropriations bill, which provides funding for the Department of Transportation and HUD programs in the coming fiscal year, with strong bipartisan support.   

Project-Based Section 8 Funding

The bill, first and foremost, provides $9.875 billion for the project-based Section 8 program, with $9.6 billion set aside for contract renewals in FY 2013.  This is $536 million above the FY 2012 appropriations and $1.18 billion above HUD’s FY 2013 budget request.  HUD proposed providing less than full funding for all project-based Section 8 contract renewals in its FY 2013 budget request.  HUD’s budget would have only funded contracts through the end of the fiscal year (September 30, 2013) instead of their full 12-month terms at renewal.

During the Subcommittee mark-up, both Subcommittee Chair Patty Murray (D-WA) and Ranking Member Susan Collins (R-ME) called the short-funding HUD proposed in its FY 2013 budget request an “ill-conceived budget gimmick” that does nothing but push the funding needs off to the following fiscal year.

This amount is enough to fully fund all project-based Section 8 contracts for their 12-month terms at renewal if HUD is able to realize their projected $400 million in “savings” from the proposals contained in the FY 2013 budget request.  The Committee’s report language on S. 2322 specifically states:

“The Committee’s recommendation also includes several cost-saving measures proposed in the Administration’s budget, including applying residual receipts to offset assistance payments for new and old regulations contracts; limiting exception rent levels to the operating cost adjustment factor [OCAF]; applying Small Area Fair Market Rents as a benchmark for rents subject to comparability; and shortening vacancy payments.”

To that end, the Committee included legislative language that HUD requested in its FY 2013 budget, which would allow residual receipts to be remitted to HUD to help offset the cost of renewing contracts.  However, NAHMA remains concerned about the cost savings included in the Senate’s bill—particularly concerning the old regulation property contracts. We do not support those particular cost savings measures and we will not advocate for them. In fact, NAHMA and other industry colleagues are seeking additional information to determine how many old regulation contracts would be affected by the Committee’s residual receipts language and whether this language would change current contracts.

For more information on the Obama Administration and Congress’s budget and appropriations actions to date for the project-based Section 8 program, please see our recent NAHMAnalysis.  A copy of the analysis may be found here: http://www.nahma.org/member/NAHMAAnalysis/NAHMAnalysis%20PBS8%20Funding%20For%20FY%202013.pdf

Troubled Properties

The Committee also included language in the bill that would require HUD to take more aggressive actions against owners when properties fail REAC inspections.  This was primarily in response to an amendment offered by Senator Tom Coburn (R-OK) last year that would have allowed HUD to deny payments to, in his words, “slumlords” and “troubled properties.” Senator Collins also had concerns that poor physical conditions in affordable housing properties in Maine were not being adequately addressed. 

The Coburn Amendment to the FY 2012 appropriations bill that would have required HUD to deny payments to persons or entities that received HUD payments for properties assisted or insured by HUD if the property was designated as “troubled” in HUD’s clandestine OPIIS system for “life threatening conditions” or “poor” physical condition; and had been on the OPIIS "troubled" properties list for “life threatening conditions” or “poor” physical condition at least one other time during the past five years. Luckily, the amendment failed by one vote. For a more detailed description of Senator Coburn’s onerous amendment, see the October 21, 2011 Washington Update column at http://www.nahma.org/executive/insider.2011.html#oct21.

S. 2322 specifically directs HUD to take various actions based on failing REAC scores. The new provisions would impact properties receiving a score under 30, a score under 60 and fails to correct deficiencies, or a score under 60 multiple times.  HUD must contact the owner and if the owner does not respond, then HUD must develop an enforcement plan and timetable to correct the deficiencies.  If the owner fails to comply with the plan, HUD may replace the property manager on the property and can: impose monetary penalties, abate the contract, transfer the project to a new owner, seek the judicial appointment of a receiver to manage the property, and/or seek a judicial order to require the owner to perform the deficiency corrections.

While there are a number of aspects of the Committee’s “troubled property” language that NAHMA does not like, the overall approach is preferable to the Coburn Amendment.  In addition, the Committee’s language does preserve the current sub-60 protocol, which allows owners 60 days to certify all deficiencies have been corrected. NAHMA and other concerned industry groups are discussing possible next steps. However, it is not likely that the Senate will remove this language from the bill when the legislation is brought to the floor.

Other Programs

NAHMA has learned that S. 2322 would provide the following funding amounts for other HUD programs for FY 2013:

• Senate’s FY 2013 proposal for Tenant-Based Section 8: $19.4 billion (total); $17.5 for voucher contract renewals
  • FY 2013 HUD budget request: $19.07 billion (total); $17.24 billion for voucher contract renewals
  • FY 2012 appropriations: $18.9 billion (total); $17.24 billion (contract renewals)
• Senate’s FY 2013 proposal for HOME: $1 billion    
  • FY 2013 HUD budget request: $1 billion
  • FY 2012 appropriations: $1 billion
• Senate’s FY 2013 proposal for CDBG: $3.1 billion
  • FY 2013 HUD budget request: $2.95 billion
  • FY 2012 appropriations: $2.95 billion
• Senate’s FY 2013 proposal for Choice Neighborhoods: $120 million
  • FY 2013 HUD budget request: $150 million
  • FY 2012 appropriations: $120 millio

Because the bill has not been made publically available yet, we do not know S. 2322’s funding amounts for the Section 202, Section 811, and LEP accounts.  We will update members as soon as we have that information.

A copy of the FY 2013 T-HUD appropriations bill summary from the Subcommittee is located here: http://www.appropriations.senate.gov/news.cfm?method=news.view&id=05d2774a-8848-4fe7-8d41-1849c55d58e0

S. 2322 will now go to the Senate floor for a vote. 

NAHMA Response

While we support the project-based Section 8 funding levels in the Senate FY 2013 Transportation-HUD bill, NAHMA recognizes that the funding fight in the House will be much more difficult.  House Appropriators will be working with much lower discretionary spending caps than the Senate.  We believe the total budget authority for the Transportation-HUD bill in the House will be lower than the Senate, meaning there will be less funding available for housing programs in the House Transportation-HUD bill.  However, we are unsure of how deep that cut will be or which programs may receive lower funding recommendations. 

We are particularly worried about the project-based Section 8 program in the House because the House Appropriations Transportation-HUD Subcommittee Chairman Tom Latham’s (R-IA) staff told NAHMA directly it would be difficult to convince the Republicans to fund Section 8 at a level higher than the President’s request—especially when no Republican members requested increased funding for this account.

The House Appropriations Committee has not announced any mark-up dates for its FY 2013 Transportation-HUD bill yet.  NAHMA will continue to work with Congressional appropriators and our industry colleagues to ensure full-funding for all rental assistance contracts in FY 2013 and adequate funding for all of HUD’s new construction and rehabilitation programs.

In the meantime, we encourage you to contact your Representatives in the House and ask them to strongly urge House Appropriations Transportation-HUD Subcommittee Chairman Tom Latham (R-IA) to provide at least $9.875 billion for the project-based Section 8 program, with at least $9.6 billion set aside for contract renewals, in the House Appropriation Committee’s FY 2013 Transportation-HUD bill.  In addition, please share your past experiences with the project-based Section 8 shortfall.

For talking points about short funding the project-based Section 8 contract renewals in FY 2013, including a phone script and model letters to use when contacting your Congressional delegation, please visit: http://www.nahma.org/content/grassroots_PBS8.html

If you would like to contact your Member of the House of Representatives, please visit: http://www.house.gov/writerep/

For more information meeting with your Representatives and for additional information on affordable housing issues, please visit: http://www.nahma.org/content/grassroots.html

S. 1925, H.R. 4271: Violence Against Women Reauthorization Act

This week, the Senate began considering S. 1925, the Violence Against Women Reauthorization Act.  The legislation would reauthorize and update the 1994 VAWA law.  The bill includes provisions that would expand housing rights of victims of domestic violence, dating violence, sexual assault, and stalking residing in federally assisted properties. 

The housing provisions in the act:

• Extend the VAWA’s protections to victims of sexual assault;
• In addition to the Section 8 program, extend VAWA’s protections to new federal housing programs including:
• Section 202 and 811;
• Homelessness assistance;
• Section 236;
• Public housing;
• All rural housing programs administered by USDA-RD; and
• The LIHTC; and
• Require HUD to establish policies and procedures for emergency transfers, which will allow victims to move to other available Federally subsidized housing units if they would remain in danger by staying in their current home.

The bill would also:

• Allow third-party verification when VAWA verification documentation contains conflicting information;
• Require HUD to make VAWA rights notifications publically available and translate the notices in multiple languages; and
• Prevent the recapturing of LIHTCs and/or denial of housing assistance payments because of non-compliance issues.

However, NAHMA remains concerned that the bill still requires HUD to develop policies and procedures for emergency transfers and requires resident notification of VAWA rights at eviction and/or when assistance is terminated.  Emergency transfers services for VAWA households are not feasible in all cases because O/As cannot a “transfer” tenants between properties. 

Unfortunately, it does not appear that the Senate will be addressing our concerns with the bill via amendments on the floor.  As a result, NAHMA is working with the relevant House Committees, VAWA’s sponsor in the House Rep. Gwen Moore, and industry colleagues to ensure these issues are addressed if and when the House and Senate bills are conferenced. 

The Senate is expected to vote on the bill as early as next week.

HFSC Approves Budget Reconciliation Legislative Recommendations

On Wednesday, the House Financial Services Committee approved their budget reconciliation legislative recommendations for FY 2013.  The FY 2013 budget resolution, which was adopted by the House under H. Con. Res. 112, directed several House Committees to find at least $18 billion in discretionary spending cuts to shift the sequestration cuts required by the Budget Control Act from security spending to non-security spending.  The House Financial Services Committee was required to make recommendations for at least $3 billion in cuts for FY 2013. 

Fortunately, the Committee did not recommend cutting spending from any affordable housing programs.  Instead, they believed the savings could be achieved by passing flood insurance reform, repealing elements of the Dodd-Frank law which gave regulators powers to unwind companies that are “too big to fail,” subjecting the Consumer Financial Protection Bureau to the Congressional appropriations process, and eliminating the Home Affordable Modification Program.

Nevertheless, there are questions about how much repealing the Dodd-Frank provisions in the bill would actually save over the next decade.  Furthermore, the reconciliation exercises in the House may be moot.  First, the Senate is unlikely to consider repealing the regulatory authority granted under the Dodd-Frank Bill. In addition, the White House has publically stated that President Obama will not approve any spending bills unless they meet discretionary spending agreement in the Budget Control Act, which was passed last August. 
NAHMA will keep members informed as Congress moves forward in the FY 2013 appropriations process.

March 30, 2012

H. Con. Res. 112: The House FY 2013 Budget Resolution

Yesterday, the House passed H. Con. Res. 112, the budget resolution for FY 2013, by a 228 to 191 vote.  All House Democrats and 10 Republicans opposed the measure. 

The budget resolution establishes non-binding spending ceilings for discretionary programs and establishes limits for total government revenue and mandatory spending for FY 2013. 

H. Con. Res. 112

H. Con Res. 112 contains the spending caps—$949 billion in discretionary spending for FY 2013, which includes the sequestration required by the Budget Control Act (BCA) passed last August—that were proposed in House Budget Committee Chairman Paul Ryan’s “The Path to Prosperity” budget proposal, which passed the Committee last week.  This is $98 billion below the pre-sequestration discretionary spending caps Congress agreed to in the BCA. 

In addition, the budget resolution proposes deep cuts to the Income Security budget account—about $36 billion below FY 2012 appropriations levels.  The Income Security account contains the budget authority for:

• HUD’s and USDA-RHS’s affordable housing programs;
• Welfare programs including food and nutrition assistance;
• Temporary Assistance for Needy Families;
• Unemployment compensation;
• Disability and retirement insurance; and
• Energy assistance. 

Furthermore, H. Con. Res. 112 directs the House Agriculture, Energy and Commerce, Financial Services, Judiciary, Oversight and Government Reform, and Ways and Means Committees to identify areas to reduce spending by $18 billion in order to spare national security programs, including defense, from sequestration in FY 2013.  The Committee on Financial Services—which oversees all HUD and USDA affordable housing programs—would be tasked with finding at least $3 billion in savings for FY 2013. 

According to HUD Secretary Donovan, if across-the-board cuts as required by sequestration under the BCA are enacted, it would devastate affordable housing programs.  Over 1 million households could lose their rental assistance and thousands of jobs would be lost. 

Amendments

The House rejected six amendments to H. Con. Res. 112.  The first, from Rep. Mick Mulvaney (R-SC), would have replaced the Ryan proposal with President Obama’s FY 2013 budget request.  This amendment was rejected unanimously by the House. 

The second amendment, backed by Rep. Emmanuel Cleaver (D-MO) was the budget endorsed by the Congressional Black Caucus.  The amendment would have rejected the sequestration required by the BCA, increased discretionary and security spending, and provided additional $63 billion for the Income Security account above what was proposed by the Ryan plan.  The plan would have been paid for by tax increases for the wealthy and closing of corporate tax loopholes. This amendment was rejected by a vote of 107 to 314.

The third amendment, introduced by Rep. Jim Cooper (D-TN), would have replaced the Ryan proposal with the spending ceilings developed by the National Commission on Fiscal Responsibility and Reform—a bipartisan group tasked by President Obama to offer a plan to reduce Federal debt and deficit levels over the next decade—in their December 2010 “The Moment of Truth”  Report.  The report would have cut discretionary spending an additional $5 billion below the BCA caps.   It was defeated by a vote of 38 to 382.

A fourth amendment, from Rep. Mike Honda (D-CA), was offered on behalf of the Congressional Progressive Caucus.  The amendment would have increased discretionary and security spending and provided additional $83 billion for the Income Security account above what was proposed by the Ryan plan.  The plan would have been paid for by tax increases for the wealthy and closing of corporate tax loopholes.  It was rejected by a vote of 78 to 346.

Rep. Scott Garrett also offered an amendment to the Ryan plan which would have cut discretionary spending levels by $117 billion in FY 2013 and frozen discretionary spending at $931 billion for the next five years.  The amendment would have also shifted the sequestration requirements of the BCA for defense spending to non-defense spending.   The amendment was defeated by a vote of 136 to 285.

Rep. Chris Van Hollen (D-MD) offered the sixth and final amendment to H. Con. Res. 112, which would have replaced the Ryan proposal with one supported by the House Budget Committee Democrats.  It rejected the $1.2 billion in sequestration required by the BCA, but adopts the act’s spending caps for the next decade.  The amendment would have provided additional $20 billion for the Income Security account above what was proposed by the Ryan plan and set aside $1 billion for the Affordable Housing Trust Fund.  The plan would have been paid for by tax increases for the wealthy and closing of corporate tax loopholes. However, it failed to pass the House by a vote of 163 to 262.

Next Steps

Despite the fact the House has adopted a budget resolution for FY 2013, the Senate will not consider it. Both the Senate Budget Committee Chair Kent Conrad (D-ND) and Senate Appropriations Committee Chair Daniel Inouye (D-HI) have rebuked the House budget resolution for going below the pre-sequestration discretionary spending caps set in BCA, passed with bipartisan support last August.  Instead, Chairman Conrad has introduced his own budget resolution in the Senate with the BCA spending caps, $1.047 trillion. 

Furthermore, the White House has publically come out in opposition to the House budget resolution.

It appears that the House and Senate will begin writing FY 2013 appropriations legislation using different spending caps, making it more difficult to reconcile the appropriations bills, including those funding HUD and USDA programs.  This increases the likelihood that Congress will need to approve a continuing resolution to fund government programs for the first few months of FY 2013, which begins on October 1, 2012.

Because of the budget crisis in Washington, DC, NAHMA member assistance is, now, more crucial than ever in our advocacy efforts.  Your Members of Congress want to hear from YOU on how spending cuts will impact services in their Districts and states.  With your assistance, NAHMA can better educate Congressional Members on the importance of funding affordable housing and convince more Members to support these critical programs in FY 2013.  To that end, we strongly encourage you and your colleagues to contact your Congressional Representatives and let them know you support a strong FY 2013 budget that provides:

• Full-funding 12- month funding for:
• Project-based Section 8;
• Tenant-based Section 8;
• Section 202 and 811 PRACs; and
• Section 521 Rural rental assistance contracts; and

• Adequate funding for affordable housing new construction and rehabilitation programs:
• HOME:
• CDBG;
• Section 202 and 811 capital advances;
• Section 515;
• Section 538; and
• USDA-RD’s Multifamily Revitalization Program.

Please also let them know you oppose any efforts to eliminate the low-income housing tax credit program. 

For talking points and information on contacting your Congressional Representatives, please visit: http://www.nahma.org/content/grassroots.html

If you have any questions, please do not hesitate to contact Michelle Kitchen (michelle.kitchen@nahma.org) or Lauren Eardensohn (lauren@nahma.org).  NAHMA staff are always happy to help guide our members through the Congressional process.

Senate Banking Housing Subcommittee Hearing on the Choice Neighborhoods Initiative

On Tuesday, the Senate Banking Housing, Transportation, and Community Development Subcommittee held a hearing on HUD’s Choice Neighborhoods Initiative.

Testimony was offered by HUD Assistant Secretary for Public and Indian Housing Sandra Henriquez, industry stakeholders, and academics in support of the demonstration and providing full authorization for the program.  The Assistant Secretary explained that, so far, the program has used $130 million in funding to provide 35 grants to local communities.  These communities have already leveraged $1.6 billion in other investments, over 12 times their total grant award, to revitalize distressed communities.

Subcommittee Chairman Robert Menendez (D-NJ) has introduced S. 624, which would authorize the Choice Neighborhoods Initiative that HUD is currently testing through a demonstration program.  The Initiative expands the HOPE VI program beyond public housing by including assisted and private distressed housing as eligible projects for funding and allowing public, private, and non-profit partners to become eligible grant recipients.  It is also intended to expand the scope of the program’s initiatives beyond the demolition of distressed housing and help provide reform to school and community programs to help alleviate concentration of poverty in urban areas. 
NAHMA supports S. 624 and is working with the Chairman towards its passage in Congress. 

For more information about the hearing, including an archived webcast, please visit: http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=48793ed3-38f3-4dbf-87d3-4551656dd9a8

H.R. 4271: Violence Against Women Reauthorization Act

This week, Rep. Gwen Moore (D-WI) introduced H.R. 4271, a bill to reauthorize the Violence Against Women Act (VAWA) of 1994.  This bill is the House companion to the Senate bill S. 1925.

At press time, the legislative language of H.R. 4271 was not publically available.  NAHMA will provide more information on the bill next week after we have had a chance to review the legislative language.

In the meantime, S. 1925 is facing opposition from Senate Republicans because it would expand VAWA protections to illegal immigrants and same-sex couples.  Nevertheless, Senate Democratic leadership plans to bring the bill to the floor in mid-April.

However, NAHMA remains concerned that the Senate bill still requires HUD to develop policies and procedures for emergency transfers and requires resident notification of VAWA rights at eviction and/or when assistance is terminated.  Emergency transfers services for VAWA households are not feasible in all cases because O/As cannot a transfer tenants between properties. 

At this time, we are unsure if the House will move H.R. 4217 or if the Republicans will draft their own VAWA reauthorization bill.  It seems unlikely that H.R. 4217 will move in the House because it is sponsored by a Democrat and lacks a strong Republican co-sponsor.

NAHMA is working with both members of the House and Senate and industry colleagues to ensure our concerns are addressed before the respective chambers consider the bill.  We will keep members updated as Congress moves this legislation forward.

H.R. 4218: Stabilizing Affordable Housing for the Future Act

Last week, Rep. Nydia Velasquez (R-NY) introduced H.R. 4218, the Stabilizing Affordable Housing for the Future Act. The bills contains very similar provisions to Title VI of Rep. Barney Frank’s H.R. 4868, the Housing Preservation and Tenant Protection Act of 2010, which was considered but not passed in the 111th Congress.

The act makes technical corrections to the existing disposition of HUD-held property statute, which includes:

• Allowing HUD to use grants from the General Insurance Fund to preserve these properties;
• Maintaining payments for Section 8 contracts for properties owned by HUD or assisted with HUD mortgages;
• Holding Section 8 assistance in escrow in the case of non-compliance with housing quality standards until the issue is resolved; and
• Transfer rental assistance (Section 8 or other) when continued assistance for a property is not feasible.

The bill would also improve the accuracy of determining a physically distressed property’s value when it is to be sold by HUD in a discount sale. It provides standardization of multifamily mortgage foreclosures between government transferees and expands the definition of a state or local transferee in the case of a multifamily mortgage foreclosure.

The bill would also require HUD to update its regulations for the transfers and sales of HUD owned buildings, FHA-insured properties, and properties with project-based Section 8 contracts.  Any potential purchaser must be in compliance with the applicable state or local government housing statutes, regulations, ordinances, and codes with regard to other properties that they owned in order to be eligible to purchase HUD-owned, FHA-insured, or project-based Section 8 properties.

Finally, the act would require HUD to post the following information, and update it quarterly, for multifamily properties receiving rental assistance or that has a HUD insured mortgage online:

• Physical inspection scores, including REAC;
• Notice of intent to pre-pay a loan mortgage ;
• Notice of a request to terminate an insurance contract; and
• Notice of the proposed termination of a rental assistance contract.

The legislation has been referred to the House Financial Services Committee.  However, it is unlikely to be considered by the Committee because it lacks a Republican co-sponsor.  NAHMA will keep members updated if the Committee decides to consider this legislation.

March 23, 2012

House Appropriation T-HUD Subcommittee Holds Hearing on FY 2013 HUD Budget

On Wednesday, the House Appropriations Transportation-HUD Subcommittee held a hearing on HUD’s FY 2013 budget with testimony given by Secretary Shaun Donovan.  Members of the Subcommittee were primarily concerned with the solvency of FHA, cuts to CDBG, and reforming both the housing choice voucher (HCV) and project-based Section 8 programs.

However, Subcommittee Ranking Member John Olver was extremely concerned by the proposed short-funding of project-based Section 8 contract renewals.  Secretary Donovan called the move a difficult decision, saying the other option for HUD would have been to reduce the number of families served by the program. 

Olver told the Secretary that inflation would drive up the costs of the project-based Section 8 program further in FY 2014.  He asked the Secretary if HUD would continue the practice of only requesting funding for the fiscal year in FY 2014, or would HUD request full funding for the 12-month terms of the contracts, some of which would extend into FY 2015? Donovan said the FY 2013 budget proposed a one time savings request.  He admitted that the program would need $1.2 billion more than the FY 2013 request to fully-fund all 12-month contract renewals. He said the funding need would be shifted into the following fiscal year. However, Donovan added that he was confident in HUD’s ability to avoid operational risks and manage the project-based Section 8 program effectively.  He believed that HUD could avoid the problems caused by program short-falls in the past.  Nevertheless, he admitted there was some risk that lenders and investors would lose confidence in the program due to uncertainly in program funding, which would increase the interest rates. 

Olver asked Donovan how serious he thought the threat of uncertainty in the lending community was.  The Secretary stated that investors and lenders have lived with uncertainty in program to some degree in the past and implied there was some risk as a result.  Olver reminded the Secretary that the previous short-funding of the project-based Section 8 program caused the uncertainty in the investor and lender community in the first place.  The Ranking Member was very troubled by what he saw in 2007 and 2008 when HUD made partial or delayed housing assistance payments (HAP) to property owners participating in the project-based Section 8 program. 

Secretary Donovan also discussed the negative impacts that across-the-board budget sequestration would have on affordable housing programs.  He believed across-the-board sequestration and additional budget cuts would be bad policies that would result in several families losing their housing.  Assuming there was a 22 percent reduction in across-the-board spending for affordable housing programs, HUD calculated that over 1 million families could lose their homes.  Over 500,000 households would lose their HCV assistance.  The project-based Section 8 program would have to cut assistance to 425,000 low-income families.  Close to 180,000 formerly homeless households would be put back on the streets.  Furthermore, close to 17,000 jobs would be lost through cuts to the CDBG program for and close to 10,000 units of new affordable housing would not be build to meet the growing demand a single year of sequestration.

Rep. John Carter (R-TX) asked about what HUD was doing to reign in unnecessary and burdensome regulations.  Secretary Donovan explained that HUD supported several proposals in the Affordable Housing and Self-Sufficiency Improvement Act (AHA) which would reform the HCV program and reduce operational costs.  HUD specifically supported the streamlining of inspections, reducing income recertifications for families with fixed incomes, and simplifying income calculations.

Finally, Subcommittee Chairman Tom Latham (R-IA) asked Secretary Donovan about the over occupancy—where a household has more bedrooms than occupants—issues plaguing affordable housing programs.  Donovan said it was not a simple issue.  HUD was working to ensure that PHAs and owners are implementing the housing rules but wanted to provide some flexibility. The Secretary offered to do a more specific analysis on the issue and provide some potential solutions to the Subcommittee.

NAHMA submitted written testimony to the appropriators prior to the hearing.  However, it was not included in the record during the hearing.  A copy of our testimony may be found here: http://www.nahma.org/Leg%20area/FY%202013%20NAHMA%20Tesimony%20HUD%20Budget%20House%20Appropriations%20032112.pdf

House GOP Releases FY 2013 Budget

Late Wednesday night, the House Budget Committee passed its controversial FY 2013 budget resolution by a very close vote of 19-18.  The budget resolution was sponsored by the Committee Chair Paul Ryan (R-WI) and would set non-defense discretionary spending for FY 2013 below the spending caps set by the Budget Control Act last year.

Chairman Ryan’s proposal for the FY 2013 budget, once again called “The Path to Prosperity,” is similar to his FY 2012 budget proposal.  The Ryan budget would replace sequestration budget caps, as required by the Budget Control Act (BCA), with significantly lower non-defense discretionary spending caps over the next 10 years. 

The Ryan budget resolution would require any mandatory spending increase to be offset by other spending reductions, which means spending increases could not be offset by tax increases.  The budget proposal also caps mandatory spending and would reform the budget process. The Ryan proposal would also repeal the sequestration requirements for defense spending.  The repeal would be offset by reductions in nondefense mandatory spending—i.e. entitlements.

Chairman Ryan’s FY 2013 budget proposes deep cuts to discretionary spending for government programs, including the accounts that provide funding for affordable housing programs. The budget resolution that passed the House Budget Committee would significantly decrease the Income Security budget authority by $103 billion over the next five years.  The Income Security account contains the budget authority for HUD’s and USDA-RHS’s affordable housing programs, welfare programs including food and nutrition assistance and Temporary Assistance for Needy Families, unemployment compensation, disability and retirement insurance, and energy assistance.  The resolution proposes reducing the Income Security budget authority by $36 billion alone between FY 2012 and FY 2013. 

The House Agriculture, Energy and Commerce, Financial Services, Judiciary, Oversight and Government Reform, and Ways and Means Committees would be responsible for identifying areas to reduce spending to achieve the lower overall discretionary spending level.  In FY 2013, these Committees would be responsible for finding at least $18 billion in additional savings below the BCA discretionary spending caps.  The Committee on Financial Services—which oversees all HUD and USDA affordable housing programs—would be tasked with finding $3 billion in savings for FY 2013.  The Committee would also be tasked with finding $13.7 billion in additional savings between FY 2014-2017.

According to HUD Secretary Donovan, if across-the-board cuts of 22 percent as required by the BCA are enacted, it would devastate affordable housing programs.  Over 1 million households could lose their rental assistance and thousands of jobs would be lost.  If the FY 2013 Ryan budget proposal—with $20 billion in spending cuts in addition to the BCA spending caps—is enacted, even more families would be at risk of losing their housing. 

In addition, the Ryan plan proposes phasing-in work requirements and time limits on all Federal need-based aid programs.  Chairman Ryan’s budget also suggests that the government start devolving low-income assistance programs from the Federal level to the state level.  However, the Ryan budget gives no details for how Congress should pursue these proposals.

Next, the Ryan budget proposes converting the federal share of Medicaid spending the Supplemental Nutrition Assistance Program (SNAP) into block grants for states, which accounts for inflation and population growth.  The SNAP reforms would begin in 2016 and would be contingent on an individual’s participation in work or job training.

Under the Ryan proposal, new Medicare beneficiaries would be given a choice between the traditional Medicare program or getting a government subsidy for a private insurance plan on a “Medicare Exchange” beginning in 2023.  Seniors’ Medicare spending would be benchmarked at the lower of the two plans. Seniors that choose the more expensive plan would be required to pay the difference.

The Ryan budget also proposes:

• Increasing energy exploration and rolling back the Obama Administration’s energy and gas policies;
• Winding down Fannie Mae and Freddie Mac;
• Including FHA loans in Federal budget accounting;
• Repeal Dodd-Frank financial regulations;
• Repeal Obama’s health care law;
• Reform federal-student loans and reduce Pell Grants;
• Freezing federal salaries and reducing the number of federal workers through attrition;
• Eliminating duplicative programs through enacting GAO recommendations;
• Reducing improper payments;
• Selling federal assets; and
• Eliminating farm subsidies.

Finally, the Ryan proposal offers reforms for individual and corporate taxes. The proposal would replace the current individual tax structure’s six brackets with just two tax levels, a 10-percent marginal tax rate for lower income earners and 25-percent for upper income earners.  Corporate taxes would be reduced from 35 percent to 25 percent.  The proposal would reduce taxes on corporate profits brought back from overseas and eliminate the Alternative Minimum Tax.  The Ryan budget suggests offsetting these tax reductions by eliminating tax subsidies and loopholes; however, the proposal provided no specific suggestions for which tax loopholes could be included in the offsets.  Instead, the Ryan budget looks to the House Ways and Means and Senate Finance Committees to develop a detailed offset plan.

However, it is unlikely that eliminating tax subsidies loopholes under the Ryan budget will be enough to offset the reduction in the individual and corporate tax rates.  Last year, the Congressional Joint Committee on Taxation discovered that cutting loopholes alone could not cover the cost of lowering the corporate tax rate. 

No Democrats voted for the passage of the resolution because they felt it cut too much discretionary spending.  A couple of Republicans also voted against the resolution because they believed it did not cut enough discretionary spending.  The mark-up was marked by partisan bickering when Republicans accused Democrats of ignoring the fiscal crisis and Democrats accused Republicans of providing tax breaks to the rich at the expense of the social welfare net for the poor.

Chairman Ryan’s FY 2013 budget resolution is expected to pass the House.  House Democrats are expected to oppose the resolution en bloc, while some House Republicans are expected to oppose the resolution because they believe it does not cut enough spending.

However, the Senate will not consider Chairman Ryan’s budget resolution. Both the Senate Budget Committee Chair Kent Conrad (D-ND) and Senate Appropriations Committee Chair Daniel Inouye (D-HI) have rebuked the Ryan budget proposal for going below the discretionary spending caps set in BCA, passed with bipartisan support last August.  Instead, Chairman Conrad has introduced his own budget resolution in the Senate with the BCA spending caps.  

Furthermore, the White House has publically come out in opposition to the Ryan budget proposal.

If the fighting over the discretionary spending caps continues through the summer—which appears to be the case—there is an increased likelihood that Congress will need to approve a continuing resolution to fund government programs for the first few months of FY 2013, which begins on October 1, 2012.

For a copy of Chairman Ryan’s “The Path to Prosperity” FY 2013 budget proposal, please click here: http://budget.house.gov/UploadedFiles/Pathtoprosperity2013.pdf

NAHMA will continue to work with Congressional authorizers and appropriators to protect affordable multifamily housing programs in FY 2013. 

Because of the budget crisis in Washington, DC, NAHMA member assistance is, now, more crucial than ever in our advocacy efforts.  Your Members of Congress want to hear from YOU on how spending cuts will impact services in their Districts and states.  With your assistance, NAHMA can better educate Congressional Members on the importance of funding affordable housing and convince more Members to support these critical programs in FY 2013.  To that end, we strongly encourage you and your colleagues to contact your Congressional Representatives and let them know you support a strong FY 2013 budget that provides:

• Full-funding of the 12- month contract terms for:
• Project-based Section 8;
• Tenant-based Section 8;
• Section 202 and 811 PRACs; and
• Section 521 Rural rental assistance contracts; and

• Adequate funding for affordable housing new construction and rehabilitation programs:
• HOME:
• CDBG;
• Section 202 and 811 capital advances;
• Section 515;
• Section 538; and
• USDA-RD’s Multifamily Revitalization Program.

Please also let them know you oppose any efforts to eliminate the low-income housing tax credit program. 

For talking points and information on contacting your Congressional Representatives, please visit: http://www.nahma.org/content/grassroots.html
If you have any questions, please do not hesitate to contact Michelle Kitchen (michelle.kitchen@nahma.org) or Lauren Eardensohn (lauren@nahma.org).  NAHMA staff are always happy to help guide our members through the Congressional process.

Senators Send Dear Colleague Letter to Appropriators Supporting Full-Funding For PBS8

Today, Senators Robert Menendez (D-NJ) and Jeff Merkley (D-OR) sent a letter to the leadership of the Senate Appropriations T-HUD Subcommittee supporting full-funding for all project-based Section 8 contracts for their 12-month terms at renewal.

At press time, confirmed signatories to the letter included:

1. Jeff Merkley (D-OR)
2. Robert Menendez (D-NJ)
3. Carl Levin (D-MI)
4. Patrick Leahy (D-VT)
5. Barbara Boxer (D-CA)
6. Charles Schumer (D-NY)
7. Scott Brown (R-MA)
8. Ron Wyden (D-OR)
9. Bernie Sanders (I-VT)
10. Richard Durbin (D-IL)
11. Ben Cardin (D-MD)
12. Kirsten Gillibrand (D-NY)
13. Maria Cantwell (D-WA)

NAHMA was participated in an coalition effort to persuade Senators Merkley and Menendez to circulate the letter. NAHMA members’ outreach to the signatories’ offices has been critical to getting the Senators listed above to sign on.

NAHMA will post of copy of the final letter with the senators’ signatures as soon as it is available. In the meantime, a copy of the text may be found here: http://www.nahma.org/Leg%20area/031912%20Merkley%20Menendez%20PBS8%20Letter%20to%20Appropriations.pdf

March 9, 2012

HFSC Passes Its Views and Estimates on the FY 2013 Budget

On Tuesday, the House Financial Services Committee passed their Views and Estimates of the Committee on Financial Services on matters to be Set Forth in the Concurrent Resolution on the Budget for Fiscal Year 2013.

In its Views and Estimates, the Committee stated that it does not support the Obama Administration’s FY 2013 budget.  The Committee Republicans felt that the “budget proposal fails to impose the spending discipline necessary to put this nation’s finances in order” and that spending cuts are necessary to improve economic growth.  They were particularly worried by the growth in the HUD budget over the last several years and HUD’s failure to address unexpended balances and the growth of program costs.  The Committee said it was committed to ensuring that HUD funds are used promptly for their intended purposes and funding recipients are using this money effectively.

The Committee was concerned that the FY 2013 budget’s funding level request for the project-based Section 8 contract renewals would push renewal costs into future years.  In addition, the Committee said it would continue working to reform the Section 8 housing choice voucher program, with a special focus on encouraging those households who are not elderly or disabled to move towards self-sufficiency.

In addition, the House Financial Services Committee questioned the need for the Affordable Housing Trust Fund.  They felt its goals were already being met by other HUD programs.

Furthermore, the Committee worried about HUD’s oversight of the HOME program in its Views and Estimates.  While the Committee applauded the steps HUD has taken so far to improve oversight, it still supported the funding reductions to the program in the FY 2012 appropriations and proposed by the FY 2013 budget request.  The Committee plans to continue its scrutiny of HUD’s oversight of the HOME program this year.

Committee Ranking Member Barney Frank (D-MA) offered an amendment to the Views and Estimates that chided the Obama Administration for proposing funding for new initiatives, like Sustainable Communities and the Choice Neighborhoods Initiative, instead of providing adequate funding for other critical affordable housing programs.  It was adopted by a voice vote.

For more information on the Committee’s Views and Estimates, please visit: http://financialservices.house.gov/Calendar/EventSingle.aspx?EventID=282946

NAHMA will continue to keep members informed as the Committee considers important affordable housing policies, positions, and legislation in the coming year.

H.R. 4145: Section 8 Reform, Responsibility, and Accountability Act of 2012

This week, Rep. Steve Chabot (R-OH) introduced H.R. 4145, the Section 8 Reform, Responsibility, and Accountability Act of 2012. The legislation, which applies to both tenant-based and project-based Section 8 programs, would prohibit housing of felons and illegal aliens, create a five year lifetime limitation on Section 8 rental assistance, establish work requirements for Section 8 tenants, require veteran’s preferences, fund compliance monitors through unspent HAPs, and require PHAs to make their plans publicly available. The legislation would also require tenant-based Section 8 to align its termination of assistance and tenancy policies with existing project-based Section 8 guidance. 

The Section 8 Reform, Responsibility, and Accountability Act was first introduced in 2007 during the 110th Congress.  Elements of the bill were proposed as amendments to H.R. 1851, the Section 8 Voucher Reform Act of 2007; however, none of the amendments passed the House Financial Services Committee at the time and the bill itself was never considered by the 110th Congress.

During the 110th Congress, NAHMA remained neutral on this legislation because we were concerned that the bill could pose a managerial burden if the site mangers and owners were responsible for monitoring tenant work and time limit requirements. 
NAHMA remains concerned that this bill could become an unfunded mandate (in terms of site staff’s time, paperwork, additional costs, and possible loss of rent) if the owners and mangers are responsible for monitoring the work requirements and time limits.  NAHMA is seeking additional information from Rep. Chabot’s office on who would be responsible for overseeing the work requirements and time limits.

Currently, the bill has no cosponsors.  Furthermore, the House Financial Services Committee will be considering the Affordable Housing and Self-Sufficiency Act (AHA) in their efforts to reform the HCV program.  While the bill is unlikely to be considered by the House Financial Services Committee, there is a possibility that elements of H.R. 4145 could be considered as amendments to AHA.  NAHMA will let members know more when additional information becomes available.

S. 2162, H.R. 3502: Project Rebuild Act

This week, Sen. Jack Reed (D-RI) introduced S. 2162, the Project Rebuild Act.  The act is a piece of President Obama’s larger American Jobs Act proposed in September.  It is also the companion bill to H.R. 3502, which Rep. Maxine Waters (D-CA) introduced in the House in December.
The Project Rebuild program, modeled after the Neighborhood Stabilization Program, would authorize appropriations of up to $15 billion to help rehabilitate vacant and foreclosed homes and businesses in order to increase construction jobs.  Key components of the program include:

• Focusing on distressed commercial properties and redevelopment to stabilize communities;
• Including for-profit entities to gain expertise, leverage federal dollars and speed program implementation;
• Increasing support for “land banking”; and
• Creating jobs through maintaining properties and eliminating community blight.

The bill would also give grant preference to projects that create affordable rental housing.

The legislation has been referred to the Senate Banking Committee.

March 2, 2012

Senate Appropriations Committee Hearing on the FY 2013 HUD Budget

Yesterday, the Senate Appropriations Transportation-HUD Subcommittee held its hearing on the FY 2013 budget request.  Testimony was offered by HUD Secretary Shaun Donovan.

During the hearing, Donovan testified that 83 percent of the budget provided some form of direct assistance for low-income families to access affordable housing.  He discussed the Department’s efforts to control the growing costs of the rental assistance accounts, including the housing choice voucher program and project-based Section 8.  These methods include:

• Enacting voucher reform through the Affordable Housing and Self-Sufficiency Act;
• Increasing minimum rents;
• Improving oversight of market rent studies used to set subsidy payment levels (i.e., “benchmarking” rents that exceed 110 percent of small area fair market rents);
• Capping annual subsidy increases for certain properties (i.e. limiting budget based rent increases to OCAF if the rent increase exceeds market levels); and
• Using excess reserves (residual receipts) to offset HUD payments to landlords.

Both Subcommittee Chairwoman Patty Murray (D-WA) and Ranking Member Susan Collins (R-ME) were extremely concerned about the proposed short funding for the project-based Section 8 program in FY 2013.  Ranking Member Collins was particularly concerned that the short-funding would create a perverse incentive for landlords to cut expenses, including maintenance of the property, due to worries they would receive partial or delayed housing assistance payments (HAP).  She was also worried that owners may opt-out of the program because of the uncertainty surrounding the HAPs. 

Sen. Collins also asked Donovan how HUD was planning to mitigate the potential shortfall risks for owners and residents.  The Secretary responded that it was a very difficult decision HUD would not have made in any other budget environment.  He said the short-funding generates both operational risks and uncertainty of funding.  Donovan believes HUD has improved their operational processes for distributing HAPs to properties and is better able to monitor units and ensure the quality of the residence.  He recognized that private capital was used to assist the project-based Section 8 units and it was important to avoid uncertainty in the program, lest lenders, investors, and owners pull out.  He said HUD would make it clear that the funding will continue to be there in FY 2013 and future years to alleviate that uncertainty. 

Sen. Murray asked Secretary Donovan what HUD plans to do if the proposed cost-savings legislative reforms are not enacted.  Donovan said the Department is working with Congressional authorizers to pass the needed legislative changes to enact their cost savings proposals like minimum rents and their preferred method of transferring residual receipts—having owners write a check to HUD that would be directed specifically to the project-based Section 8 account rather than the Treasury.  He did not believe these changes would require extensive rulemaking and most could be done through a HUD notice.  Donovan discussed how many of HUD’s savings proposals, like capping subsidy increases and improving oversight of market studies, could already be done administratively.  Murray reminded Donovan that some of these proposals, like using residual receipts to offset HAPs, would hurt properties and their owners.  Donovan discussed the consequences of minimum rents, but did not address the residual receipts concerns. 

In addition, Secretary Donovan discussed how the Department was improving their inspections process for HUD assisted units.  He acknowledged that HUD needed to make better use of its resources and said HUD was examining ways to shift staff to increase oversight and bring “offenders” and “fraudsters” to enforcement quickly.  He said that HUD was working on a pilot to better coordinate its inspection system.  Specifically, the Department is looking at ways REAC could be used as a quality control mechanism to oversee inspectors for the housing choice voucher and other programs that currently do not use REAC.  He would like to eventually extend this pilot to all HUD assisted programs.  Donovan also discussed REAC’s plans to upgrade its system.  REAC inspectors are expected to have the capabilities to take photos and send them to HUD along with the inspection report within the next few months.

For more information on the hearing, please visit: http://appropriations.senate.gov/ht-transportation.cfm?method=hearings.view&id=05d64903-3fa9-463e-b848-c962539a18da

HFSC Oversight Hearing on HUD and Its FY 2013 Budget

On Tuesday, the House Financial Services Insurance, Housing, and Community Opportunity Subcommittee held an oversight hearing on HUD and its FY 2013 budget request.  Several of HUD’s Assistant Secretaries offered their testimony at the hearing.

Main concerns for Republicans on the Subcommittee included: the growing cost of housing programs like Section 8, the need to reform the Section 8 programs with legislation like the Affordable Housing and Self-Sufficiency Act, and the fiscal solvency of the Federal Housing Administration (FHA).

Democrats were concerned by cuts to key HUD programs like the project-based Section 8 program and HUD’s proposed minimum rents.

During Rep. Luis Gutierrez’s (D-IL) opening statements, he publically stated his concern about the short-funding of the project-based Section 8 program.  During the question period of the hearing, Rep. Maxine Waters pressed HUD to explain why they believed the short-funding was necessary.  Acting Assistant Secretary for Housing and FHA Commissioner Carole Galante explained the decision was made to meet the budget projections under the sequestration requirements of the Budget Control Act.  She explained the Administration did not want to propose the cuts, but promised to administer any short-funding in a way that ensures owners are paid on time and no residents are harmed.  She referred to the measure as “just-in-time housing.”  Galante stated that HUD had better contract renewal forecasting tools and they believe the amount would be enough to fund the entire FY 2013.  Galante acknowledge that the funding shortfall would need to be made up in FY 2014.  Rep. Waters responded that she still felt the short-funding was a problem and assured the Acting Assistant Secretary she would look into it further.

The Acting Assistant Secretary also spoke about how HUD was cutting spending in a number of places, including the project-based Section 8 program.  She discussed how HUD hoped to generate program “savings” by increasing minimum rents, improving oversight of market rent studies used to set subsidy payment levels, capping annual subsidy increases for certain properties, and using excess reserves to offset HUD payments to landlords, as Secretary Donovan discussed during the Senate Appropriations T-HUD Subcommittee hearing on the FY 2013 HUD budget.

Galante also stated that increasing the insurance premiums for mortgages would generate substantial capital for HUD, while only adding a minimal cost to most borrowers’ mortgages.  HUD has proposed raising insurance premiums further on multifamily mortgages, as well as single-family, and securitizing the multifamily portfolio risk through Ginnie Mae.  FHA is expected to publish the proposed increase in insurance premiums in the Federal Register in the next two months and will offer the public an opportunity to comment on the increase.

During Rep. Robert Dold’s (R-IL) opening statements, he discussed his concern over HUD’s beg bug guidance, Notice H 2011-20.  He felt the notice lacked the tools to provide effective methods of eradicating of bed bug infestations and called on HUD to address these issues.

Rep. Al Green publically stated his support for the limited-English proficiency (LEP) funding request for the HUD Fair Housing Account in FY 2013.  Assistant Secretary for Fair Housing John Trasviña spoke about the important translations and oral interpretation services, including an interagency telephone interpretation hotline, that would receive continued funding through the LEP line item.

At the end of the hearing, Rep. Dold included an industry letter, which NAHMA signed on to, stating our opposition to short-funding the project-based Section 8 program.  A copy of that letter may be found here: http://www.nahma.org/Leg%20area/Provider%20letter%20PBRA%202013%20Approps%20022312.pdf

For more information on the hearing, please visit:
http://financialservices.house.gov/Calendar/EventSingle.aspx?EventID=281188

Senate Banking Committee Holds Hearing on Housing Market and Recovery Efforts

On Tuesday, the Senate Banking Committee held a hearing to discuss the state of the housing market and Federal efforts to help the market recover.  Testimony was offered by HUD Secretary Shaun Donovan, Federal Reserve System Governor Elizabeth Duke, and Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco.

Donovan used the majority of his testimony to discuss the Obama Administration’s new initiatives to help refinancing efforts in the single-family mortgage market, as well as the mortgage servicing settlement HUD recently reached with a number of mortgage providers and banks.  The Secretary, however, did discuss the FHFA’s new real-estate owned to rental pilot program, where FHFA would sell foreclosed Fannie Mae and Freddie Mac properties to investors and owners who would convert them to rental housing.  More information about this program can be found below in this week’s Washington Update.

For more information on the hearing, please visit: http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=6677a0f8-3fd3-4faf-a748-c5a3211df0df

GAO Releases Waste Reduction Report

This week, the Government Accountability Office (GAO) released a Congressional Report that detailed its recommendations to reduce government duplication and overlap of Federal government activities.
 
The “2012 Annual Report: Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue” specifically discussed ways the government could consolidate Federal green building and housing assistance programs.

The report recommended examining housing programs and tax expenditures further and suggested possibly consolidating some of them.  The GAO has once again recommended consolidating RHS loan programs into HUD.  The Office believes there is substantial overlap in the services offered and populations served by the two sets of loan programs, which should be consolidated.  However, USDA believes the RHS programs serve a unique purpose and are vital to the communities they serve.
 
The report supported the White House and Rental Policy Working Group’s efforts to create proposals to align the administration of rental assistance.  NAHMA is a member of the Rental Policy Working Group.  GAO plans to consider these proposals and make additional recommendations to consolidate multifamily housing programs.

GAO has also called on the Office of Management and Budget (OMB) to review and evaluate the use of tax expenditures, including those used to support Federal housing programs, to determine areas of overlap and conflict.  The report specifically stated that the historic preservation tax credit’s goal of rehabilitating properties conflicted with states’ efforts to produce energy and cost-efficient housing through the LIHTC program.  GAO first recommended this review in 2005.  However, OMB has yet to do so citing methodological and conceptual issues. 

GAO also identified 94 green building initiatives, which they believe could be better used and coordinated between agencies.  The Office called on the Environmental Protection Agency to lead other federal agencies—including HUD and Department of Energy—in collaborating on assessing their initiatives to foster green building in programs.

A copy of the report may be found here:
http://www.gao.gov/assets/590/588818.pdf

The House Committee on Oversight and Government Reform held a hearing on Tuesday to discuss the report.  During the hearing, Sen. Tom Coburn (R-OK) criticized the large number of housing programs offered by the Federal government.

For more information on the hearing, please visit: http://oversight.house.gov/index.php?option=com_content&view=article&id=1604%3A2-28-12-qgovernment-20-gao-unveils-new-duplicative-program-reportq&catid=12&Itemid=1

FHFA Starts Accepting Bids for REO Rental Program

On Monday, the Federal Housing Finance Agency (FHFA) began accepting bids from investors for the first phase of its pilot program to convert foreclosed properties owned by Fannie Mae and Freddie Mac into affordable rental units. 

The first phase of the pilot will involve the sale of pools of homes owned by Fannie Mae that are currently occupied by renters.   The first sale will include pools of homes from: Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix, and parts of Florida. FHFA wants the program to help increase affordable housing options and stabilize the housing market in the areas hardest hit by the housing crisis.

To qualify for participation in the program, potential investors must post a security deposit, sign a confidentiality agreement and submit a detailed application showing they have the experience and means to purchase and manage the properties.
Subsequent phases of the pilot will involve vacant real-estate owned (REO) properties. 

The pilot program is expected to help FHFA develop scalable models to enact similar conversion programs nation-wide. 

NAHMA provide additional information as it becomes available on the pilot.
For more information on the pilot program, please visit: http://www.fhfa.gov/Default.aspx?Page=360

February 24, 2012

NAHMA Meeting with Multifamily DAS Head

Today, NAHMA staff and the leaders of NAHMA’s regulatory committees met with Multifamily DAS Marie Head and her staff to discuss our regulatory priorities for 2012.  These priorities include:

• Ensuring full funding and timely payment of Project-Based Section 8 Housing Assistance Payment (HAP) contracts;
• Addressing concerns about HUD’s Section 8 cost savings Proposals;
• Developing workable Reserve for Replacement policies;
• Finding a pragmatic, balanced approach to bed bug prevention and eradication;
• Preserving affordable rental housing;
• Obtaining clarity and consistency in application of HUD’s Previous Participation Certification Process; and
• Improving the Performance-Based Contract Administration (PBCA) program.

During the meeting, NAHMA learned that HUD will release the PBCA NOFA later this evening or on Monday.  We were also informed that the revised bedbugs notice is currently in clearance at HUD.  The new guidance will supersede the previous bed bug Notice H 2011-20.  The Department expects to release it soon.  We will email members as soon as these items become available. 
For a copy of NAHMA’s HUD Regulatory Priorities for 2012, please visit: http://www.nahma.org/Leg%20area/NAHMA%20HUD%20Priorities%20for%20DAS%20Head%20Feb%202012.pdf

NAHMA Signs on to Industry Letter Supporting Full-Funding for PBS8 Contracts

Earlier this week, NAHMA signed on to an industry letter urging the leadership of the House and Senate Appropriations Transportation-HUD Subcommittees to support full-funding for all 12-month project-based Section 8 contract renewals in FY 2013.

In the letter, the signatories, including NAHMA, articulated our opposition to the proposed short funding of project-based Section 8 contracts in the FY 2013 budget.  The signatories believe the proposal to short fund PBRA contracts would create real risks for residents and owners, discourage new investment in affordable rental housing, and result in reduced rehabilitation and job creation in the portion of the housing sector.
The letter was sent to the appropriators yesterday.

For a copy of the letter, please visit: http://www.nahma.org/Leg%20area/Provider%20letter%20PBRA%202013%20Approps%20022312.pdf 

FHFA Releases Proposal to Wind Down GSEs

This week, the Federal Housing Finance Agency (FHFA) submitted a plan to Congress to wind down the government sponsored entities (GSE) Fannie Mae and Freddie Mac. The plan focuses on building a new infrastructure for a secondary mortgage market, shifting mortgage credit risk to private investors, and maintain foreclosure prevention efforts and credit availability.

The plan recognizes that immediately shutting down the GSEs would drive up interest rates and limit mortgage availability.  FHFA has proposed strengthening the private mortgage market infrastructure by creating a securitization platform and national standards for mortgage securitization.  FHFA would then gradually shift the mortgage credit risk from the GSEs and the private sector.

However, the report acknowledges that the multifamily mortgage sector should be treated differently than the single-family during the wind down.  In fact, before the GSEs shift the multifamily mortgages to the private sector, FHFA has proposed undertaking a market analysis of the viability of its multifamily operations without government guarantees. The analysis would require market reviews of their respective business models and the likely viability of those models operating on a stand-alone basis after attracting private capital and adjusting pricing, if needed, to attract and retain that capital.

Finally, any efforts to wind down the GSEs would be at the expense of stability and liquidity in the market.  FHFA would continue their activities to prevent foreclosures and ensure loss mitigation during the wind down.

FHFA believes that its goals are consistent with the housing finance reform plans Treasury proposed last year.  It believes that this plan will leave the option of government involvement in the secondary mortgage market available for the future.

A copy of the full plan may be found here: http://www.fhfa.gov/webfiles/23344/StrategicPlanConservatorshipsFINAL.pdf
Although this plan is only a blueprint to wind down the GSEs, it is unlikely that Congress will complete any action to reform Fannie Mae and Freddie Mac this year because of impending elections.

Obama Releases Tax Reform Plan

This week, President Obama and Treasury released a new tax reform plan.  The proposal would cut corporate tax rates, simplify the tax code for small businesses, and end a number of corporate tax loopholes.

The plan would specifically:

• Lower the corporate tax rate from 35 percent to 28 percent.
• However, the plan requires a minimum corporate tax rate for both domestic and foreign earnings; and
• Closes a number of tax loopholes and expenditures to offset the reduction including:
• Eliminating the oil and gas tax preferences;
• Terminating the special treatment of insurance products for corporations;
• Increasing the tax rate on carried interest from the current 15 percent capital gains rate to the 35 percent tax rate for general income; and
• Ending depreciation rules for corporate aircrafts;
• Exempt those loopholes/expenditures which are critical to broader growth or fairness;
• Reduce the effective tax rate American manufacturing to 25 percent
• Simplify and cut taxes for America’s small businesses; and
• Review temporary tax provisions.

However, no additional details about the tax loopholes and expenditures the Obama Administration is considering for the plan are available.  Treasury plans to discuss other potential offsets with Congress as they move forward with tax reform.

NAHMA is unsure of how real-estate partnerships would be treated under the proposed tax increase for carried interest.  The FY 2013 budget request suggested that real-estate investment trusts owning carried interest in a real-estate partnership would be exempt from the tax rate increase.  We are still seeking clarification on both these issues.

However, it is unlikely these proposals will be enough to offset the reduction in the corporate tax rates.  Last year, the Congressional Joint Committee on Taxation  discovered that cutting loopholes alone could not cover the cost of lowering the tax rate.

House Ways and Means Committee Chair David Camp (R-MI) issues a press release in response to the proposal stating he was willing to work with the Obama Administration on the tax plan, but still supported broader, more comprehensive tax reform.

Nevertheless, it is unlikely that any major tax reform plan will pass Congress this year, due to the contentious upcoming Presidential and general elections.  NAHMA will keep members informed if Congress considers any tax reform proposal that would impact multifamily housing.

A copy of Obama’s tax reform plan may be found here: http://www.treasury.gov/resource-center/tax-policy/Documents/The-Presidents-Framework-for-Business-Tax-Reform-02-22-2012.pdf

February 17, 2012

FY 2013 Budget Request for Multifamily Housing Programs

On Monday, President Obama presented his FY 2013 budget request to Congress and the public.  NAHMA was extremely disappointed that the budget DID NOT request full-funding for all 12-months of project-based Section 8 contracts in FY 2013.  The budget did, however, contain full-funding for tenant-based Section 8 housing choice vouchers, Section 202 and 811 PRACs, and rural rental assistance contracts. 

The budget also proposed flat funding the HOME and CDBG programs at FY 2012 appropriations levels.  Although the USDA-RD budget increases funding for the Multifamily Revitalization and Preservation Program and Section 538 loans, it proposes zeroing out funding for the Section 515 program.

The FY 2013 budget request for multifamily housing programs is as follows:

HUD

• Tenant-Based Section 8: $19.07 billion (total); $17.24 billion for voucher contract renewals
  • FY 2012 Appropriation: $18.9 billion(total); $17.24 billion voucher contract renewals
  • Increase in funding is due to an almost $200 million increase in PHA admin fees.

• Project-Based Section 8: $8.7 billion(total); $8.44 billion for contract renewals and an advanced appropriation of $400 million for FY 2014; $260 for contract administration
  • FY 2012 Appropriation: $9.3 billion(total);  $9.05 billion for contract renewals and an advanced appropriation of $400 million for FY 2013; $289 for contract administration
  • The FY 2013 funding request includes a proposal to reduce the frequency of Management and Occupancy Reviews as part of its cost savings efforts.

NAHMA is extremely disheartened by the proposed short-funding of the project-based Section 8 program.  The FY 2013 proposal is a $611 million reduction for contract renewals when compared to the FY 2012 appropriations.  HUD has told the industry that at least $9.5 billion would be necessary to fully-fund all project-based Section 8 contracts for their 12-month terms at renewal.  If this proposal is enacted for the FY 2013 appropriations, only 1/3 of contract renewals would receive their full 12-months of funding.  All other contracts would receive funding through September 30, 2013.  Furthermore, The FY 2013 budget proposes cost cutting measures, which HUD Multifamily plans to introduce in the next few months: using small area fair market rents as benchmarks for rent increases, capping budget-based rent increases for Option 4 properties at OCAF levels, and using residual receipts (from both old and new regulation properties) to help offset HUD payments. 

• Section 202: $475 million (total); $285 million for PRACs, $100 million for operational assistance, and $90 million for service coordinators
  • FY 2012 Appropriation: $374.6 million (total); $269 for PRACs and senior preservation rental assistance contracts, $91 million for Service Coordinators, and $25 million for assisted living and services enriched conversions
  • The FY 2013 budget would replace capital advances with operational assistance, which would be given to state housing agencies—in partnership with state health care agencies—to process and distribute for new construction.

• Section 811: $150 million (total); $96 million for PRACs and $54 million for project rental assistance
  • FY 2012 Appropriation: $165 million
  • No funding for new construction or rehabilitation in the FY 2013 budget request.
  • The FY 2013 budget request would expand the project rental assistance demonstration authorized by the Frank Melville Supportive Housing Investment Act.
• LEP: $500,000
  • FY 2012 Appropriation: $300,000
• CDBG: $2.95 billion
  • FY 2012 Appropriation: $2.95 billion
• HOME: $1 billion
  • FY 2012 Appropriation: $1 billion

• HOPE VI: $0
  • FY 2012 Appropriation: $0
  • The Obama Administration continues to push funding for the Choice Neighborhoods Initiative.
• Choice Neighborhoods: $150 million
  • FY 2012 Appropriation: $120 million
• Housing Trust Fund: $1 billion
  • FY 2012 Appropriation: $0
• Rental Assistance Demonstration: $0
  • FY 2012 Appropriation: $0
  • The FY 2012 appropriations authorized HUD to execute the public housing and mod rehab demonstration conversion program to long term project-based Section 8 contracts or project-based vouchers, as well as permission for RAP and Rent Supp properties to convert their tenant-based vouchers to project based vouchers

The budget also proposes enacting some of the reforms contained in the Affordable Housing and Self Sufficiency Act including streamlining inspections, raising minimum rents, and increasing the threshold for deducting unreimbursed medical expenses. 

RHS

• Section 515: $0
  • FY 2012 Appropriation: $64.5 million
  • “The 2013 Budget does not include funding for Section 515 multifamily housing loans because the focus is on the 515 multifamily housing portfolio for 2013 is rehabilitation, which is being carried out through the funding in the multifamily housing revitalization appropriation request.”
• Section 521 Rural Rental Assistance: $907 million
  • FY 2012 Appropriation: $905 million
• Section 538: $150 million; USDA-RD may continue to charge a fee for these loans to cover subsidy costs.
  • FY 2012 Appropriation: $130 million
  • Multifamily Housing Revitalization and Preservation Program: $46.9 million (total); $34.4 for the demonstration program and $12.6 million for vouchers
    • FY 2012 Appropriation: $13 million (total); $11 million for vouchers and $2 million for the demonstration program

  Treasury

  The Department of Treasury has included four proposals that would affect the LIHTC program.  They are as follows:

  • Proposal 1: Allow new LIHTC projects to be occupied by households earning up to 80 percent of the AMI if they are offset by units occupied by households earning less than 60 percent of AMI
  • Proposal 2: Increase private investment in the program by making LIHTCs beneficial to Real Estate Investment Trusts.
  • Proposal 3: Provide a 30% basis boost for 4 percent bond credits if they are used for preserving, recapitalizing, and rehabilitating existing affordable housing.
  • Proposal 4: Require LIHTC developments to provide protections to victims of domestic violence.

  The Treasury has once again proposed increasing the tax rate on carried interest in an effort to increase government revenue.  “Carried interest” refers to the profits made on the sale of assets for general partners of entrepreneurial enterprises, including real-estate partnerships and the sale of properties.  The Treasury is specifically proposing increasing the tax rate on carried interest from the current capital gains rate of 15 percentage points to the tax rate for income, 35 percentage points.  NAHMA is currently seeking more information on how real-estate partnerships would be treated under this proposal.

  NAHMA Position

  NAHMA strongly opposes the FY 2013 budget request for the project-based Section 8 program.  On Monday, during the Q&A period with the HUD Secretary Shaun Donovan on the FY 2013 HUD Budget, NAHMA publically opposed the cuts to the project-based Section 8 program and the return of “stub” or “incremental” HAP contracts.  We reminded the Secretary that the short-funding is contrary to the Administration’s previous position for the project-based Section 8 program.  NAHMA staff read a quote from HUD’s FY 2010 budget summary, which stated, “Annual renewal funding should be predictable, timely, and sufficient to fund rental contracts for a full 12 months, a sharp contrast to the short funding of contracts that occurred in recent years.”  Likewise, NAHMA emphasized that returning to the failed, reckless policy of short-funding contract renewals only three years after stabilizing the program funding, HUD hurt its credibility with the owner/agent community.  

  NAHMA will work actively with Congress and industry colleagues to ensure the project-based Section 8 account receives full funding for all 12-month contract renewals in the FY 2013 appropriations.  We will also work to ensure that all other rental assistance contracts are fully funded and new construction and rehabilitation programs receive adequate funding. 

  NAHMA strongly urges members to contact their Senators and Representatives and ask them to support full-funding for the 12-month project-based Section 8 contract terms at the time of renewal, at least $9.5 billion.  NAHMA is preparing talking points and other advocacy resources to assist you.  Please visit our grassroots webpage for more information: http://www.nahma.org/content/grassroots.html

  It is unlikely that the President’s FY 2013 budget request will be adopted by Congress.  Republican leadership has come out in strong opposition to the budget request.  Senate Majority Leader Harry Reid (D-NV) has publically stated that he will not bring a FY 2013 budget resolution to the floor, even if the Senate Budget Committee passes one.  Congressional appropriators from both parties have already insisted they will use the FY 2013 discretionary spending caps approved in the Budget Control Act last Fall.

  Nevertheless, we are currently analyzing the budget and plan to release a more in-depth analysis on the FY 2013 budget request for all affordable multifamily programs in the near future. 

  In the meantime, NAHMA members learn more about the FY 2013 budget request by visiting: http://www.whitehouse.gov/omb/budget/Overview/

  NAHMA Submits Comments on the HOME Rule

  On Tuesday, NAHMA submitted its comments on the proposed rule for the HOME Investment Partnership Program, published in the Federal Register on December 16, 2011.

  The proposed rule would amend the HOME regulations to clarify existing requirements, enhance program accountability, and require the timely production of housing assisted with program funds.  NAHMA supports the accountability and oversight goals of the proposed rule; however, we requested that HUD clarify some of the proposed regulatory language regarding rehabilitation standards in order to prevent negative unintended consequences.

  A copy of NAHMA’s comments may be found here: http://www.nahma.org/Leg%20area/NAHMA%20HOME%20Comments%20021412.pdf

  H.R. 3630: Middle Class Tax Relief and Job Creation Act

  This morning, both the House and the Senate passed H.R. 3630, which would extend the payroll-tax holiday, federal unemployment benefits, and a change to Medicare doctor payments through 2012. 

  The bill would offset some of these costs by reducing the tenure on unemployment, cutting funding to hospitals when Medicare patients fail to pay premiums and co-pays, reducing preventative medicine funds, and auctioning off some of the wireless spectrum.  However, the bill does not provide an offset for the pay-roll tax extension, which will add $89 billion to this year’s deficit.

  President Obama has stated he plans to sign this bill into law.

   

  February 10, 2012

  Project-Based Section 8 Funding in FY 2013 Budget Request

  The FY 2013 Presidential Budget Request will be released on Monday.  We are aware of rumors that HUD may not request sufficient appropriations to fully-fund the 12-month terms of project-based Section 8 contacts at the time of renewal.  The budget language is not publically available at this time. 

  NAHMA members will recall that, prior to FY 2009, HUD previously requested enough funding to cover the project-based Section 8 program for the length of the fiscal year rather than full-funding for all 12 month contracts.  This resulted in the growth of a $2 billion funding gap in the program.  Property owners received partial and/or delayed housing assistance payments (HAP) because of the funding shortfalls.  As a result, owners had to defer payments on property operations—including mortgages, maintenance, staff salaries, and utilities—which jeopardized the financial and physical health of the properties.  It was not until 2009, when the $2 billion gap was funded by the American Reinvestment and Recovery Act, that HUD began requesting funding for the full 12-month contract terms at the time of renewal, and funding for HAPs stabilized.

  NAHMA will be attending HUD’s budget briefing on Monday afternoon.  We will vigorously oppose any budget proposal that would provide less than full-funding for all 12-month project-based Section 8 contracts.  NAHMA has an advocacy strategy in development, along with our industry colleagues, in case the rumor turns out to be true.  NAHMA will continue to insist that Congress provide full-funding for all 12 month contracts in its FY 2013 appropriations bill.

  HFSC Housing Subcommittee Passes HCV Reform and FHA Risk Bills

  On Tuesday, the House Financial Services Insurance, Housing, and Community Opportunity Subcommittee passed the Affordable Housing and Self Sufficiency Act and the FHA Emergency Fiscal Solvency Act by voice votes.

  Affordable Housing and Self Sufficiency Act

  The Subcommittee passed an updated discussion draft of the Affordable Housing and Self Sufficiency Act (AHA).  The bill was extremely similar to the previous discussion draft; however, the Subcommittee bill increased the minimum rents for public housing and Section 8 housing choice vouchers (HCV) by $19.45 a month and included a study regarding the legacy use of HCV.  The minimum rents could be adjusted for inflation at HUD’s discretion.

  AHA makes important improvements to the Section 8 voucher program and is the legislative vehicle to carry the LEP compromise language.  The act would streamline inspections for HCV units and enact much needed rent and income reforms.  The legislation would also extend the permitted contract period for project-based vouchers from 15 to 20 years.  The bill would expand the PHA Family Self Sufficiency and Moving-to-Work programs.  It provides authorization language and an appropriations request for the Rental Assistance Demonstration program, which would allow public housing, Mod-Rehab, RAP, and Rent Supp properties to convert to long term project-based Section 8 contracts.

  Four amendments to the bill were offered and subsequently withdrawn.  The amendment sponsors will work with the Committee the improve the amendment language and reintroduce them during the full Committee mark-up.  The amendments are as follows:

  • Rep. Luis Gutierrez (D-IL) introduced an amendment to allow for rents above 120 percent of fair market for disabled households with HCVs;
  • Rep. Gutierrez introduced an amendment that would strike the minimum rent language in the bill;
  • Rep. Brad Sherman (D-CA) introduced an amendment that would allow HCVs to be used in homeownership opportunities for manufactured housing;
  • Rep. Maxine Waters (D-CA) introduced an amendment that would strike the language allowing Section 8 properties to use PHA’s local preferences and waiting list tools and replace the Moving to Work expansion with a Housing Innovation Program for public housing.

  NAHMA supports the discussion draft as passed by the Subcommittee.  The legislation has not been formally introduced in the House yet.  The House Financial Services Committee as a whole plans to mark up the bill in late February.

  FHA Emergency Fiscal Solvency Act

  The Subcommittee also passed the FHA Emergency Fiscal Solvency Act during the mark up.  The bill is intended to reduce the risk of the FHA program requiring a taxpayer bailout.  Subcommittee Republicans stated that they were particularly worried about the solvency of the FHA insurance fund during the mark-up.

  Under the legislation HUD would be required to raise insurance premiums, disqualify lenders that produce loans that frequently default, make it easier to require lenders to reimburse the government for faulty loans, and increase reporting requirements on the FHA program’s financial health.

  The bill will now go before the full Committee.  It has strong Republican support and is likely to pass the House; however, it is unlikely to be considered by Senate Democrats.

  For more information on these bills and the Subcommittee mark-up, please visit: http://financialservices.house.gov/Calendar/EventSingle.aspx?EventID=277936

  Budget Reform Bills Pass the House

  This week, the House passed H.R. 3581, the Budget and Accounting Transparency Act, and H.R. 3521, the Expedited Legislative Line-Item Veto and Rescissions Act.  These bills would make it easier to reduce discretionary spending and would change budget accounting procedures.

  H.R. 3581 would:

  • Incorporate Fair Value accounting principles in the budget;
  • Bring the government sponsored entities and US Postal Services costs into the budget.
  • Require the Congressional Budget Office and the Office of Management and Budget to study offsetting receipts/collections/revenues; and
  • Require all federal agencies to make their budget request justification materials public.

  H.R. 3521 would require Congress to expedite consideration of Presidential requests to reduce discretionary spending of specific items and programs.

  Although these bills have passed the House, they are unlikely to be considered by the Senate.  NAHMA will keep members informed in the Senate does decide to consider them.

  NAHMA PBCA NOFA Policy Recommendation

  NAHMA has finalized its public policy position on the criteria for the PBCA NOFA.  These positions are part of our ongoing effort to raise NAHMA’s profile with HUD on issues related to the contract administration program.

  This week, NAHMA’s Board of Directors decided that:
  

  • NAHMA will support PBCA contracts that are longer than two years.
    
  • Specifically, NAHMA believes that the ACCs should be at least three years but no longer than five years provided that it includes an option for HUD to terminate at any time (with notice) if the PBCA is in noncompliance with HUD’s policies or instructions, is performing poorly, or establishes a pattern of exceeding its authority under HUD policies.
    
  • PBCA members were concerned that the two-year timeframe is too short when the time and expense necessary to implement for the contracts is considered.
  • NAHMA members also felt the two-year contracts were too short because most PBCAs needed time to learn how to perform the ACC tasks properly.
  • However, NAHMA members requested an option for HUD to terminate the contracts when PBCAs are not incompliance or their performance is substandard.
    
  • NAHMA also supports a level playing field for all PBCA applicants. 
    
  • We do not believe that HUD should include any preferences for applicants in the NOFA beyond the three criteria of the applicant’s ability to perform responsibilities, knowledge of HUD Section 8 policies, and strong commitment to customer service.

  NAHMA will bring these positions to HUD’s attention when we meet with senior Multifamily officials later this month.  We will keep members updated as more information regarding the PBCA NOFA becomes available.

   

  February 3, 2012

  S. 1925: Violence Against Women Reauthorization Act of 2011

  Yesterday, the Senate Judiciary Committee passed S. 1925, the Violence Against Women Reauthorization Act (VAWA) of 2011.  The legislation would reauthorize and update the 1994 VAWA law.  The bill includes provisions that would expand housing rights of victims of domestic violence, dating violence, sexual assault, and stalking residing in federally assisted properties. 
  The housing provisions in the act:

  • Extend the VAWA’s protections to victims of sexual assault;
  • In addition to the Section 8 program, extend VAWA’s protections to new federal housing programs including:
  • Section 202 and 811;
  • Homelessness assistance;
  • Section 236;
  • Public housing;
  • All rural housing programs administered by USDA-RD; and
  • The LIHTC; and
  • Require HUD to establish policies and procedures for emergency transfers, which will allow victims to move to other available Federally subsidized housing units if they would remain in danger by staying in their current home.

  The Senate Judiciary Committee made some substantial improvements to the housing provisions during the mark-up, including:

  • Allowing third-party verification when VAWA verification documentation contains conflicting information;
  • Requiring HUD to make VAWA rights notifications publically available to O/As and translate the notices in multiple languages; and
  • Preventing the recapturing of LIHTCs and/or denial of housing assistance payments because of non-compliance issues.

  However, NAHMA remains concerned that the bill still requires HUD to develop policies and procedures for emergency transfers and requires resident notification of VAWA rights at eviction and/or when assistance is terminated.  Emergency transfers services for VAWA households are not feasible in all cases because O/As cannot a transfer tenants between properties.  NAHMA is working with both members of the House and Senate and industry colleagues to ensure these issues are addressed before the respective chambers consider the bill.

  The bill will now go to the Senate floor for consideration.

  Return of the “Carried Interest” Proposal

  House Ways and Means Ranking Member Sander Levin (D-MI) plans to reintroduce his “carried interest” legislation.  Ranking Member Levin also introduced this proposal in the 111th Congress. 

  “Carried interest” refers to the profits made on the sale of assets for general partners of entrepreneurial enterprises, including real-estate partnerships and the sale of properties.  The Levin bill, as introduced in the 111th Congress, would have increased the tax rate on carried interest from the current capital gains rate of 15 percentage points to the tax rate for income, 35 percentage points.  At press time, the new legislation had not been introduced.  NAHMA has contacted Ranking Member Levin’s office for additional information on the bill, specifically if real-estate partnership will be included in the definition of general partners of entrepreneurial enterprises and what the increased tax rate would be.

  This proposal has been floated by President Obama and several Democrats in Congress for the last few years as a way to increase tax revenues through closing a tax “loophole” and help lower government spending.  However, Republicans generally oppose the provision because they view it as a tax increase.  Therefore, Ranking Member Levin’s legislation is unlikely to be seriously considered in the House.
  NAHMA opposes the proposal if it encompasses real-estate partnerships.  We believe the tax increase creates a disincentive for developers and investors to become the managing general partner real estate deals for multifamily housing development.  This would lead to the completion of fewer real estate deals, the loss of jobs, increases in the cost of new developments, and a reduction of housing supply by making many deals financially unworkable.

  NAHMA will keep members updated on carried interest and other tax proposals that affect multifamily rental housing as they develop.

  FHFA Announced REO Conversion Program

  This week, the Federal Housing Finance Agency (FHFA) announced the launch of the first phase of a pilot program to convert foreclosed properties owned by Fannie Mae and Freddie Mac into affordable rental units.  FHFA wants the program to help increase affordable housing options and stabilize the housing market in the areas hardest hit by the housing crisis.

  The FHFA is pre-qualifying investors to purchase properties in areas hardest hit by the foreclosure crisis.  Investors must meet a number of criteria and would be required to rent the purchased properties for a specified number of years.

  The first phase of the pilot will involve homes owned by Fannie Mae that are currently occupied by renters.   Subsequent phases of the pilot will involve vacant real-estate owned (REO) properties.  The pilot program is expected to help FHFA develop scalable models to enact similar conversion programs nation-wide.  FHFA does not need Congressional approval in order to launch this program.  Nevertheless, the Administration has acknowledged the pilots would be limited and slow moving.

  NAHMA will keep members involved as FHFA moves forward with this pilot program.

  For more information on the pilot program, please visit: http://www.fhfa.gov/Default.aspx?Page=360

  S. 2065: Down Payment to Protect National Security Act of 2012

  Yesterday, Sen. Jon Kyl introduced the Down Payment to Protect National Security Act.  The bill would reduce the across-the-board cuts for defense spending.  Currently, the Department of Defense is facing up to $600 billion in spending cuts over the next decade due to sequestration required to offset the debt-ceiling increase under the Budget Control Act, passed last August. 

  However, the bill would be offset by a 5 percent attrition to the federal workforce over the next five years by hiring only two positions for every three lost and extending the federal pay freeze through 2014.

  Last year, President Obama threatened to veto any alternatives or reductions to the sequestration requirements.  He has not changed his position on sequestration since that announcement.  In addition, Senate Democrats are unlikely to bring the bill to the floor for consideration because it was introduced by the Senate Republicans, who are the minority party in the chamber.

   

  January 25, 2012

  State of the Union Address

  Last night, President Obama gave his yearly State of the Union address before both chambers of Congress.  His address focused on creating a fair tax code and increasing employment.  In his remarks, the President provided specific proposals to:

  • Reform the tax code;
  • Improve workforce skills;
  • Create jobs and bring outsourced jobs back to America;
  • Promote the development of energy resources; and
  • Stabilize the housing market.

  President Obama spent a good portion of his speech discussing tax reform.  First, he discussed corporate taxes.  Obama proposed creating a minimum tax rate for U.S.-based multi-national corporations and cutting corporate tax rates for businesses that create jobs in America. 

  Second, the President discussed the need for a “fair” individual tax rate.  Obama called on Congress to immediately pass the 2 percent payroll tax cut, which expires in February, through the end of 2012.  He also proposed raising the minimum tax rate to at least 30 percent on millionaires, which ties in to Obama’s longstanding support for increasing taxes on carried interest.  Carried interest refers to the capital gains an investor or general partnership receives on an investment, which includes the profits on real estate when it is sold.  The tax system currently taxes capital gains at a rate of 15 percent.  Obama and other Democrats have proposed increasing the tax rate on capital gains at the same rate as actual income, about 30 to 35 percent.  NAHMA strongly opposed increasing the tax rate on carried interest for real estate partnerships.

  President Obama also proposed new initiatives to streamline job placement resources.  First, he proposed an initiative to facilitate job placement and skill development between businesses and community colleges.  Second, he proposed streamlining local training and employment services to make it easier for dislocated workers to find employment in their communities. 

  In addition, the President highlighted his regulatory reform efforts in the State of the Union.  Last year, the Administration undertook a review of agency regulations to eliminate or reform regulations that were outdated, unnecessary, or costly.  The Administration has announced 500 reforms so far that it estimates will save businesses and citizens more than $10 billion over the next five years.  NAHMA submitted comments on the Administration’s regulatory burden review to both HUD and USDA-RD. 

  A copy of NAHMA’s April 20 comments on HUD’s regulatory review Federal Register Notice may be found here: http://www.nahma.org/member/New%20HUD%20Docs/NAHMA%20Comments%20on%20Reducing%20Regulatory%20Burden.pdf

  A copy of NAHMA’s comments on USDA-RD’s regulatory review Federal Register Notice may be found here: http://www.nahma.org/Leg%20area/RD%20reg%20review%20comments%20052011.pdf
  Finally, the President proposed two initiatives to help stabilize the mortgage market and address the foreclosure crisis.  First, the President asked Congress to enact a Federal program to help owners refinance their mortgages on single-family homes.  The program would be offset through small fees on large financial institutions.  Second, Obama announced that the U.S. Attorney General would be expanding the Federal government’s investigations into abusive lending practices and packaging risky mortgages in order to bring additional accountability to the housing finance market.
  NAHMA does not believe the House Republicans will undertake many of the proposals specified in the State of the Union address.  Republican leaders have expressed strong opposition to tax increases of any kind and have publically questioned the cost of Obama’s education, energy, and resource initiatives. 

  We will keep our members informed as the Administration develops and attempts to move these proposals.

  A copy of President Obama’s State of the Union address may be found here: http://www.whitehouse.gov/the-press-office/2012/01/24/remarks-president-state-union-address

  A copy of the “Blueprint for an America Built to Last,” discussing the proposals presented in the State of the Union in more detail, may be found here: http://www.whitehouse.gov/blog/2012/01/24/blueprint-america-built-last

  Affordable Housing and Self-Sufficiency Improvement Act

  The House Financial Services Committee Republican staff has informed NAHMA that the “Affordable Housing and Self-Sufficiency Improvement Act (AHA) of 2012” will be introduced by the Insurance, Housing, and Community Opportunity Subcommittee Chairwoman, Judy Biggert (R-IL), next week. AHA is the successor legislation to the Section 8 Voucher Reform Act (SEVRA) and Section 8 Savings Act (SESA).

  The legislation would make a number of important reforms to the housing choice voucher program including inspection streamlining and income and rent reforms.  The bill is expected to contain the LEP authorization guidance language.  In addition, the legislation would expand the PHA Family Self Sufficiency and Moving-to-Work programs.  Finally, the act would provide authorization language and an appropriations request for the Rental Assistance Demonstration program, which would allow public housing, Mod-Rehab, RAP, and Rent Supp properties to convert to long term project-based Section 8 contracts.  NAHMA supports the draft language for AHA the Committee circulated last week. 

  The bill is currently scheduled to be marked-up on Tuesday February 7.  Please note that, because the legislation has yet to be introduced, the language is still subject to change.

  House Budget Committee Marks Up Budget Reform Bills

  This week, the House Budget Committee passed a number of bills to control discretionary spending and change budget accounting procedures.  These bills are part of a larger package of 10 bills to reform the budget process.  The acts that passed the Committee this week are as follows:

  • H.R. 3578: The Baseline Reform Act
  • Removes the automatic inflation increases in discretionary spending accounts.
  • H.R. 3581: The Budget and Accounting Transparency Act
  • Incorporate Fair Value accounting principles in the budget;
  • Brings the government sponsored entities and US Postal Services costs into the budget.
  • Requires a CBO & OMB study on offsetting receipts/collections/revenues; and
  • Requires all federal agencies to make their budget request justification materials public.
  • H.R. 3582: The Pro-Growth Budgeting Act
  • Requires CBO to provide an assessment of the macroeconomic impact of major legislation.

  These three bills will now go before the full House for a vote.  However, they are unlikely to be considered by the Senate Democrats and, therefore, are unlikely to become law.

   

  January 20, 2012

  Affordable Housing and Self-Sufficiency Improvement Act

  This week, NAHMA staff and industry colleagues met with House Financial Services Committee Republican staff to discuss the draft legislation the “Affordable Housing and Self-Sufficiency Improvement Act (AHA) of 2012.”  This act is the Committee’s newest housing choice voucher reform legislative language and is the successor to the draft Section 8 Savings Act (SESA), the Republican version of the Section 8 Voucher Reform Act (SEVRA). 

  The bill also addresses the major concerns NAHMA had with the second draft of SESA.  Specifically, it separates the inspection streamlining and rent reform incentives from PHA participation in a self-sufficiency program.  AHA makes important improvements to the Section 8 voucher program and is the legislative vehicle to carry the LEP compromise language.  The bill would expand the PHA Family Self Sufficiency and Moving-to-Work programs.  It provides authorization language and an appropriations request for the Rental Assistance Demonstration program, which would allow public housing, Mod-Rehab, RAP, and Rent Supp properties to convert to long term project-based Section 8 contracts.

  House Financial Services Insurance, Housing, and Community Opportunity Subcommittee Chairwoman Judy Biggert (R-IL) is expected to formally introduce the legislation in the House next week.  The Subcommittee would like to mark-up the bill by mid-February.

  A copy of the draft legislation text may be found here: http://www.nahma.org/member/Legislation/Draft%20AHA%20Full%20Text%202012.pdf

  A copy of the section-by-section of the draft bill may be found here: http://www.nahma.org/member/Legislation/DRAFT%20AHA%202012%20Section%20by%20Section.pdf

  NAHMA supports the draft bill as it is currently written.  However, because the legislation has yet to be introduced, the language is still subject to change. 

  Bachus to Step Down as HFSC Chair After 2012

  On Wednesday, House Financial Services Committee (HFSC) Chairman Spencer Bachus (R-AL) announced he would not be seeking a waiver from the Republican Steering Committee to remain as the senior Republican on the Committee in the 113th Congress.  Bachus has surpassed the term limits set by the House Republicans for Committee leadership positions and required a waiver to remain Chair of the Committee in 2013.

  Rep. Jeb Hensarling (R-TX) is currently the Vice Chair of the Committee and is, technically, next in line for the position.  However, seniority does not guarantee the position.  The Committee votes on its leadership at the beginning of Congressional session.  Other contenders for the spot include:  Reps. Scott Garrett (R-NJ), Shelley Moore Capito (R-WV), and Ed Royce (R-CA). 

  H.R. 114: Biennial Budgeting and Appropriations Act

  Next week, the House Rules Committee is expected to consider H.R. 114, the Biennial Budgeting and Appropriations Act.  The act would have Congress pass the 12 appropriations bills every two years rather than on a yearly basis.  Under the act, Congress would adopt a budget resolution in the first session of Congress (i.e., odd-numbered years) and consider appropriations legislation in the second session (i.e. even-numbered years).

  Even if the legislation passes the House, however, this proposal is unpopular with Senate Democrats and is unlikely to be considered by the Senate in the 112th Congress.

  U.S. Mayors Ask Congress to Protect CDBG and HOME Funding

  This week, the U.S. Conference of Mayors released a report on the economic state of the nation’s 363 metro regions.  The report concluded that many regions are still struggling primarily because of the housing market and that 22 percent of metro areas hardest hit by housing crisis will take at least five years to recover.

  In order to aid economic recovery, the mayors’ have called on Congress to strengthen communities by protecting the CDBG, HOME, and public safety programs from cuts in FY 2013.  The mayors also asked Congress to invest in infrastructure and pass a comprehensive transportation bill, extend the payroll tax cut, and extend unemployment benefits.

  A copy of the report’s key findings is available here: http://usmayors.org/pressreleases/uploads/2012/MetroEconomiesKeyFindings_011812.pdf

  A copy of the full report may be found here: http://usmayors.org/pressreleases/uploads/2012/MetroEconomiesReport_011812.pdf

   

  January 13, 2012

  H.R. 3765: Temporary Payroll Tax Cut Continuation Act of 2011

  Last month, Congress passed a two-month extension for the payroll tax break, unemployment insurance, TANF, and the Medicare payment fix.  The bill also included a permit for the Keystone XL Pipeline.  The bill permitted Fannie Mae, Freddie Mac, and FHA to charge guarantee fees to offset these extensions.

  The House Republicans previously rejected the two-month payroll tax cut extension because it was less than one year long.  Due to increasing public pressure, the House GOP backed down and passed the extension backed by Senate Democrats. 

  The House and the Senate have begun conferring on legislation to extend the payroll tax cuts and other expiring provisions for the entire year.  NAHMA will keep members updated as this process moves forward.

  HUD Meets with Industry to Discuss FY 2012 Section 8 Budget Policies

  On Monday, NAHMA staff participated in an industry meeting with HUD to discuss HUD Multifamily Housing’s November 22, 2011 memo regarding the “Impact of HUD’s Fiscal Year 2012 Budget on Section 8 Project Based Rental Assistance.”  A copy of the memo may be found here: http://www.nahma.org/member/New%20HUD%20Docs/Golrick%20Memo%20112211%20FY2012%20Budget%27s%20Impact%20on%20HUD.pdf

  HUD is working on three new policies to help slow the growth of costs for the project-based Section 8 program:

  • Using residual receipts on new regulation project-based Section 8 to offset HAP payments;
  • Holding budget based rent increases on Option 4 renewals to OCAF if the proposed rents exceed market; and
  • Requiring a justification from rent comparability studies (RCS) when proposed rents exceed 110% of small area fair market rents (SAFMR).

  The Department is currently working on guidance to implement the residual receipts policy.  HUD does have the authority in its regulations to use the residual receipts from new regulation properties for HAP payments; however, industry members cautioned that this may not be advisable to do in every case.

  During the meeting, HUD said it would honor previous commitments that the Department agreed to for using residual receipts funds.  HUD also said it will not deplete the residual receipts accounts down to zero in order to pay HAPs.  Nevertheless, the Department has not decided if it will use remaining residual receipts to reduce HAPs again in FY 2013.

  Industry reps argued that holding budget based rent increases on Option 4 renewals to OCAF levels would cause hardship for some properties, particularly rural properties, and asked the Department to allow flexibility in the policy for properties that could not operate under that limitation.

  Industry representatives also objected to the policy and methodology of requiring a justification from RCSs when proposed rents exceed 110% of SAFMRs. HUD argued a benchmark is necessary because the quality of some rent comparability studies is poor. Industry stakeholders argued the proposed policy is flawed because the market itself is the benchmark.  The industry believes that HUD’s problems with certain RCSs is a separate issue.

  The industry also objected to using SAFMRs as the benchmark because there is no data to show how using SAFMRs will affect the financial viability of properties.  Industry stakeholders pointed out that HUD has not even implemented its demonstration program to test the impact on using SAFMRs in the housing choice voucher program.  

  NAHMA will keep members updated as HUD moves forward with the development of guidance for and the implementation of the three new Section 8 budget policies.

  NAHMA Conference Call with REAC Regarding Technical Reviews and Database Adjustments

  Yesterday, NAHMA staff and members participated on a conference call with staff from HUD’s REAC office to discuss information necessary to submit a successful Technical Review (TR) and/or Database Adjustment (DBA) appeal.

  HUD staff stressed the importance of ensuring that appeal documentation is signed and that third parties are qualified and the information they provide is independently verifiable.  Participants also discussed the need for O/As to follow proper procedures when requesting a postponement or cancellation of a REAC inspection, as well as the importance of requesting pre-database adjustments.

  NAHMA is currently working on a NAHMAnalysis of the issues discussed on the call.  We plan to release it some time next week.

  Obama Proposes Consolidation of Commerce and Trade Agencies

  Today, President Obama announced that he plans to ask Congress for power to consolidate six federal commerce and trade agencies during a speech to small business groups.  Obama said his proposal is aimed primarily at helping small businesses cut through bureaucratic red tape.

  The Obama Administration plan would elevate the Small Business Administration to the Cabinet and combine it with the Commerce Department, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency.  Though the plan would eliminate the Commerce Department, the White House says combining the six agencies would save about $3 billion over 10 years and cut about 1,000 to 2,000 jobs.  Congressional Republicans scoffed at the small size of the proposal, saying many more cutbacks are needed to tame the deficit.

  In the President’s remarks, he also mentioned that he would ultimately like to get rid of inefficiencies throughout the federal government, saying there were five different entities involved in housing and more than a dozen agencies that regulate food safety.  President Obama included similar proposals in his State of the Union address last year; however, they have not gained any traction in Congress.  The House Financial Services Committee Republicans started discussions on draft legislation that would move RHS to HUD in June 2011.  Nevertheless, the proposal is opposed by both USDA-RD and HUD and formal legislation has not been introduced.  Furthermore, due to the contentious debates surrounding the Federal budget and likely Presidential election year politicking in Congress, agency consolidation legislation is unlikely to pass Congress.

  California Supreme Court Eliminates Redevelopment Agencies

  Last month, the California Supreme Court ruled on two state bills that effectively abolish 400 local redevelopment agencies, a major source of funding for affordable housing in California. 

  In June 2011, the California Legislature passed two bills intended to address the state’s budget deficit: AB 26X abolished redevelopment agencies while its companion, AB 27X, allowed the agencies to continue if they made payments into funds benefiting schools and special districts in the state.

  The California Supreme Court upheld AB 26X as constitutional and struck down AB 27X, effectively abolishing the redevelopment agencies and removing California’s primary source of soft financing for affordable housing projects.  Now, California redevelopment agencies may not take on any new obligations and must wind down their existing operations which will be transferred to designated “successor agencies.”

  A copy of the ruling may be found here: http://www.courtinfo.ca.gov/opinions/documents/S194861.PDF
   

   

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