Housing Briefs - May 21, 2009

State Updates

Senate Budget Amendment Restores Majority of Housing Cuts

On May 19th, the Senate passed an amendment that would partially restore many of the cuts proposed for affordable housing programs in the Senate Ways and Means budget. The funding restorations were made possible by a vote to raise the Sales Tax to 6.25%. Absent new revenues, the cuts to these programs would have been even more devastating. The following increases were made:

Despite these appreciated increases, several amendments were unsuccessful or are still pending. With debate winding down, the Senate has not passed amendments to fund the SoftSecond Mortgage Loan program and IDA program. In addition, Amendment No. 264 filed by Senator Chandler to restore finding for foreclosure prevention counseling grants administered by the Division of Banks is still pending. Under the Senate budget, the Alternative Housing Voucher Program would also be cut by $550,000 and the Tenancy Preservation Program would be cut in half.

CHAPA wishes to thank Sen. Sonia Chang-Diaz, Sen. Anthony Galluccio, Sen. Pat Jehlen, Sen. Brian Joyce, Sen. Jamie Eldridge, Sen. Sue Tucker, Sen. Harriette Chandler, Sen. Steven Panagiotakos, and Senate President Therese Murray for their advocacy in spearheading these amendments.

As of noon on May 21st, the Senate budget debate was still in process. Once the Senate adopts its budget, both chambers will appoint conferees and a conference committee will resolve the differences between the two bills before sending the Governor the budget for his signature prior to July 1st.

Housing Committee Holds Standing-Room-Only Hearings on Foreclosure and Expiring Use Legislation

Chairman Kevin Honan, Chairwoman Susan Tucker, and members of the Housing Committee heard testimony on CHAPA proposals to preserve affordable housing and to stabilize neighborhoods impacted by foreclosures in the previous weeks.

CHAPA Board Member Amy Anthony submitted testimony on S. 666 and H. 3573, An Act Preserving Publicly Assisted Affordable Housing, and was joined on a panel by Mike Feloney from Southwest Boston CDC and Elaine DeRosa from Cambridge Economic Opportunity Committee.

Sean Caron submitted testimony on H. 3571, H. 3692 and S. 1379, a comprehensive foreclosure relief proposal, alongside Juan Bonilla from Lawrence CommunityWorks, Chris Norris from MBHP and Lisa Alberghini from the Planning Office of Urban Affairs. Undersecretary Barbara Anthony and Revere Mayor Thomas Ambrosino also testified in support of this proposal.

Land Use Partnership Act Scheduled for May 26th Hearing

The Joint Committee on Municipalities and Regional Government will hear testimony on the Land Use Partnership Act, S. 765, on Tuesday, May 26th in State House Room B-1 at 10:00 am. This legislation was developed by Secretary Greg Bialecki as part of an eighteen month zoning reform taskforce process to identify consensus among various stakeholders and filed by Sen. Harriette Chandler and Rep. Kevin Honan. CHAPA supports the approach within LUPA to create residential development districts near infrastructure and town centers, and applauds Chairman Eldridge and Chairman Donato for holding this hearing.



Administration Plans Cuts to Capital Budget

At a hearing before the House Bonding Committee, Secretary Leslie Kirwan and Undersecretary Jay Gonzalez testified that the Administration will be scaling back capital spending due to reduced revenues available to pay the debt service. These officials reported that their capital spending plan is designed to keep debt service costs below 8 percent of budgeted state expenditures, which means capital spending must be further constrained from the planned FY 2010 capital expenditures of $2.532 billion in the face of slumping tax collections.



Massachusetts Housing Partnership Releases Quarterly Foreclosure Monitor

MHP’s latest Foreclosure Monitor highlights the significant number of homeowners plagued by negative equity. It also indicates a modest lull in foreclosure petitions for the first quarter of this year, although job losses threaten this trend. Lastly, the monitor highlights continued challenges in the subprime area, with delinquencies mounting.

Massachusetts Foreclosures Down 20.8% in April

Banker and Tradesman reported today that 755 foreclosure deeds were recorded in April in Massachusetts, down 21% from the 953 filed in March and down 44% from the number filed in April 2008 (1,344). While this is the lowest monthly total in over a year, the report noted that the April figures may not signal a long term trend as mortgage delinquencies continue to rise. Foreclosure petition filings in April (2,013) were down 15.5% from March and year to date filings (8,649) are down 30% from the same period in 2008. Auction notices also fell to 1,004 in April, down 8% compared to March.

CHAPA and the Massachusetts Rehabilitation Commission Launch new Registry for Accessible and Affordable Housing

CHAPA and the Massachusetts Rehabilitation Commission (MRC) recently launched a newly redesigned Mass Access website to help bridge the gap between residents in need of affordable, accessible housing and available apartments across the state. The updated site (www.massaccesshousingregistry.org) features a user-friendly design and an expanded database of affordable rental housing and homeownership opportunities in Massachusetts, including accessible and adaptable homes for people with disabilities. The new Mass Access features a web design constructed to be fully accessible to all users; the ability for property managers to login to the site and post their own property information; and an automated feature using Google maps to track the location of available units.

Federal Updates

Foreclosure/Homeless Bill Signed into Law

On May 20, President Obama signed the Helping Families Save Their Homes Act (S. 896) into law. As detailed in a White House summary, the law modifies the Hope for Homeowners (H4H) program to make it usable by more borrowers, facilitates the modification of FHA loans and Rural Housing Service guaranteed loans, and extends the temporary increase in maximum FDIC-insured deposit amount ($250,000) and credit union insured accounts. In addition, it authorizes appropriations of $60 million a year in FY2010 and FY2011 for housing counseling and outreach to prevent mortgage rescue scams. It also includes protections for renters in foreclosed properties, including Section 8 tenants, through December 31, 2012, by requiring at least a 90 day notice to vacate and honoring existing leases. One provision gives states some flexibility to use Neighborhood Stabilization Program (NSP) funds outside targeted areas.

The law also reauthorizes and expands McKinney-Vento homeless programs, authorizing $2.2 billion, consolidating programs, and targeting assistance to families and children.

President Releases Proposed HUD Budget for FY2010

On May 7, the Obama Administration released details of its FY2010 budget proposal for HUD. The Enterprise Foundation has published a summary and budget chart. The Center on Budget and Policy Priorities has also published a summary. The proposal includes $1 billion for the new National Housing Trust, a 15% increase in funding for CDBG, full funding for renewals of tenant-based vouchers and project-based rental assistance contracts, and Sustainable Communities, Choice Neighborhood and Energy Innovation Initiatives. It does not provide funding for any new incremental vouchers. Most other programs are level funded.



New England Housing Network Advocates for 2009 Priorities

The New England Housing Network, coordinated by CHAPA, just completed two days of visits in Washington, D.C. with top congressional and Obama Administration policymakers. The Network brought key housing advocates from the six New England states to meet with the New England Congressional staff, key Appropriations and Banking committee staff members, and officials at HUD and OMB. This annual trip brings together New England advocates with people who have direct impact on the drafting of legislation, budgetary, and regulatory language.

The Network discussed this year’s priorities, including FY2010 federal budget appropriations for current and incremental Section 8 vouchers, project-based rental assistance renewals, CDBG/HOME, homelessness, public housing, rural housing, and energy costs related to housing. The Network also discussed several legislative initiatives, including foreclosure mitigation and anti-predatory lending, the Section 8 Voucher Reform Act (SEVRA), preservation legislation, the low-income tax credit program, housing for the elderly and people with disabilities, and homelessness. The Network urged funding of the National Housing Trust Fund, and requested adding project-based Section 8 vouchers to make this fund more effective in communities with higher operating costs.



Clarification Sought on Guidance for Tax Credit Assistance and Exchange Programs

On May 4, HUD and the Treasury Department issued guidance on the Tax Credit Assistance Program (TCAP) and the Tax Credit Exchange Program (“Section 1602”), the stimulus bill programs to assist low income housing tax credit projects facing funding gaps due to low credit prices, difficulties in finding investors and/or new onerous investor conditions. The agencies also held a joint webcast on the programs on May 6. A summary of the guidance is available on CHAPA’s website. CHAPA has also submitted a list of concerns about the guidance to federal officials and members of Congress.

Today, DHCD posted TCAP guidelines for Massachusetts on its website.

Mortgage Fraud Prevention Bill Signed into Law

The President also signed the Fraud Enforcement and Recovery Act (S.386) into law on May 20, providing funds to government agencies to investigate mortgage fraud.



Climate Change Bill Markup Begins; Advocates Urge Funding for HUD Housing

The House Committee on Energy and Commerce began mark-up of H.R. 2454 (the American Clean Energy Security Act of 2009) this week. Summaries of the 946-page bill and the first 3 days of markup (May 18-20) are available on the Committee’s website.

Introduced by Representatives Edward Markey (D-MA) and Henry Waxman (D-CA), the draft bill would require utilities to increase their use of renewable energy sources, encourage clean coal and clean fuel technologies, promote energy efficiency in transportation, utilities and housing, and curb carbon emissions through a cap and trade system. It also includes language that would reserve 5% of certain revenues raised by the bill to fund energy efficient residential retrofits.

HUD Green Retrofit Program Notice Published

On May 13, HUD published guidance on the Green Retrofit Program (GRP) for HUD-Assisted Multifamily Housing. This program, authorized under ARRA, will make $250 million available to owners of HUD-assisted multifamily properties in the form of grants and/or loans to improve the energy efficiency of their buildings or make other environmental improvements.

Funds will be disbursed first-come, first-serve and owners can begin submitting applications on June 15th. Funding will be capped at $15,000 per unit and is expected to average $10,000 per unit program-wide. Only owners of Section 202 and Section 811 properties and nonprofits will be eligible for grants. Eligibility is restricted to larger properties (32 units for Section 202, 20 units for Section 515 properties with Section 8, and 72 units for all other project-based Section 8 properties).

HUD Revises Neighborhood Stabilization Program and Issues NOFA

On May 4, HUD released two NOFAs for the Neighborhood Stabilization Program funding that was authorized under ARRA. One NOFA is for $1.93 billion in new competitive program grants (NSP2); the second (NSP-TA) offers up to $50 million for technical assistance providers.

The rules for spending NSP2 funds have also changed relative to the NSP1 rules. Among other things, the purchase price discount requirement has been reduced (to at least 1% below appraised value for an individual property and 5% below grant-wide, down from 5% and 15% under NSP1) and appraisal requirements for properties valued at below $25,000 have been reduced. Enterprise Communities has prepared summaries of both the NSP2 NOFA and regulatory changes. Applications for NSP-TA grants are due to HUD by June 8 and applications for NSP2 funds are due by July 17.

Senate Committee Confirmation Hearings Held for HUD Appointees

The Senate Committee on Banking, Housing and Urban Affairs held hearings on May 13 on three nominees for HUD Assistant Secretary positions, including Sandra Henriquez (Public and Indian Housing), Raphael W. Bostic (Policy Development and Research) and Mercedes Márquez (Community Planning and Development). The Committee vote on Sandra Henriquez is scheduled for May 21. After the Committee votes, all nominations have to be approved by the full Senate.



HUD Deputy Assistant Secretary for Policy Development and Research (PDR) Appointed

On May 21, the Obama administration announced the appointment of Erika Poethig as Deputy Assistant Secretary for Policy Development and Research. Poethig has been the Associate Director for Housing at the John D. and Catherine T. Mac Arthur Foundation since 2001 with a focus on regional policy and practice, including a $150 million special initiative for the preservation of affordable housing.





HUD and Treasury Expand Foreclosure Avoidance Programs and Report Progress

On May 14, HUD and the Treasury Department announced two more initiatives to enhance foreclosure prevention efforts.

• The “Foreclosure Alternatives” Program sets up a standardized and streamlined program to facilitate short sales or deeds in lieu of foreclosure (DILs) to help borrowers who lack the income to sustain a loan modification under the Home Affordable Modification Program (HAMP) to avoid foreclosure. It offers incentive payments to servicers who participate (up to $1,000 per successful sale or DIL), relocation assistance to the homeowners (up to $1,500) and payments to investors who agree to release junior liens. Homeowners will automatically qualify if they meet the minimum eligibility standards for HAMP but didn’t qualify for a mortgage or couldn’t sustain payments during the trial period. Participating servicers will determine whether a short sale is appropriate, based on a net present value comparison of likely amounts recovered relative to foreclosure. Borrowers will be given a set period of time to sell their home. Homeowner applications will be accepted until December 31, 2012.
• The Home Price Decline Protection (HPDP) program is intended to encourage lenders to approve loan modifications in areas where home price declines have been steepest, by offering them cash payments for every loan modification, with amounts based on average local home prices and the declines in average local market home prices in recent quarters prior to the modification. The amount lenders/investors earn will be 1/24th of the total amount agreed upon for each month the modification is sustained in the first two years.

The May 14th announcement also included details on participation in the HAMP and GSE refinance programs that started in March. Fourteen servicers are now participating in HAMP, meaning that program, along with Fannie Mae and Freddie Mac refinance programs, cover 75% of all loans in the nation. To date, the servicers have extended trial loan modification offers to over 55,000 homeowners. Fannie Mae reports that is has received over 51,000 eligible refinance applications from borrowers with less than 20% equity and Freddie Mac reported that it has closed about 1,500 refinance loans.



NLIHC Establishes Online ARRA Clearinghouse

The National Low Income Housing Coalition has launched a new ARRA Clearinghouse website. The website provides information about the “stimulus” programs related to housing in the American Recovery and Reinvestment Act (ARRA). It includes summaries, by program, of funding amounts, eligible activities, program deadlines, links to HUD and DOE websites, links to other organizations following a given program, and other information advocates might find useful. NLIHC will add HUD Notices, NOFAs, and analyses from other national organizations as they become available.

Upcoming Event

CHAPA Statewide Foreclosure Conference

CHAPA statewide foreclosure conference is an all-day event that will be held June 24, 2009 in Worcester at the College of the Holy Cross. At the conference, practitioners, policymakers, public officials and others will be able to hear updates on recent trends and changes in state and national foreclosure policies and initiatives, learn about strategies that are working and not working at the local level and consider new ideas for advocacy or implementation. Specific topics will include, but are not limited to: municipal strategies for addressing foreclosures pre-foreclosure counseling, and funding and acquisition. Please see the conference brochure for further details and registration information.