CARH’s BROADCAST EMAIL – Legislative and Regulatory Update

December 14, 2016

1)  Congress Passes 2^nd Continuing Resolution for FY 2017; Legislation Signed into Law by President Obama on Saturday, December 10, 2016

Late last Friday, the Senate, by a vote of 63-36, passed a second Continuing Resolution (CR) for Fiscal Year (FY) 2017. Passage of the temporary spending bill by the House of Representatives occurred earlier in the week. The first CR for FY 2017, passed prior to Congress recessing for the Presidential and Congressional elections, was due to expire at midnight on December 9^th. While it had been the desire of many members of Congress to pass a full year Omnibus Appropriations bill, agreement on a long-term bill could not be reached. Therefore, the second CR, totaling $1.07 trillion will run until April 28, 2017, allowing the incoming Trump Administration to weigh-in on spending for the remainder of FY 2017. To fit under mandated spending caps, the CR includes an across-the-board cut of 0.19% to funding levels for defense and non-defense programs. President Obama signed the legislation into law early Saturday morning (Public Law 114-254).

In addition to providing funding for the housing programs administered both by the Department of Housing and Urban Development (HUD) and the United States Department of Agriculture’s (USDA) Rural Development (RD), the CR includes $4.1 billion in disaster relief to rebuild areas in Florida, Georgia, Louisiana, North and South Carolinas, Texas, and West Virginia that were inundated by floods caused by Hurricane Mathew and other storms earlier in the year. Also, $170 million is being allocated to overhaul the infrastructures of communities with contaminated drinking water.

In terms of funding for housing programs of concern to CARH members, the CR includes an anomaly requested by the Administration that gives RD flexibility to provide enough funding for approved loans under the Section 538 Guaranteed Multi-Family Housing Loan Program. A similar anomaly was included in the CR that expired on December 9^th for the Section 521 Rental Assistance program. We understand that RD will continue to receive from the Office of Management and Budget (OMB) a larger portion of the RA funds that were provided last year at this time, thus meeting all contract renewals that are required between December 9, 2016, and April 28, 2017. Given all of the issues surrounding the RA program during FY 2015, it is important for borrowers and residents that this anomaly still applies to the program. Just in case, we ask you to notify CARH immediately if you see any RA funding availability issues.

The first session of the 115^th Congress will convene on January 3, 2017. A majority of time during the first weeks of the Congress will be spent on organization and setting policies and priorities for the Committees. The inauguration of Donald Trump as the 45^th President will take place on January 20, 2017. Confirmation hearings will be the focus of the Senate immediately following the Inauguration Day festivities.

At present there hasn’t been a nomination for USDA Secretary. Dr. Ben Carson has been nominated as HUD Secretary, which has drawn a relatively large amount of attention. Much has been criticism of his absence of housing experience, but much has been reported about his remarkable personal history rising from poverty to famed neurosurgeon. We certainly look forward to working with the next Secretaries of USDA and HUD to help improve our federal housing programs.

There has been discussion among affordable housing equity providers and developers about possible tax reform. CARH is monitoring the Congressional schedule and looks forward to continuing work in the next Congress to preserve and strengthen the low income housing tax credit and other tax credits that can be used to support housing and housing infrastructure.

2)  Federal Housing Finance Agency Issues Final Rule on Duty to Serve

The Housing and Economic Recovery Act of 2008 (HERA) amended the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act) to establish a duty to serve for Fannie Mae and Freddie Mac (collectively, the Enterprises) to serve three specified underserved markets — manufactured housing, affordable housing preservation, and rural markets — in order to increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for very low-, low-, and moderate-income families in those markets. Yesterday, the Federal Housing Finance Agency (FHFA) issued a final rule that sets forth specific activities that the Enterprises may consider undertaking, at their discretion, Duty to Serve credit and provides that the Enterprises may propose additional activities. The final rule does not mandate any particular activities. The final rule establishes FHFA’s method for evaluating and rating the Enterprises’ compliance with the Duty to Serve each underserved market.

CARH’s meeting in January at the Ritz Carlton, Sarasota will focus on the new Congress and Administration. If you have not already done so, please register now. The meeting brochure/agenda can be found on the CARH website, or by clicking here.