Senate Finance Committee Ranking Member Ron Wyden Releases Affordable Housing Priorities, Including Minimum 4 Percent Housing Credit Rate

Last month, Senate Finance Committee Ranking Member Ron Wyden (D-OR) released an outline of affordable housing priorities he will pursue in the next Covid-19 relief bill. The six priorities are focused on preserving and expanding affordable housing and on supporting Housing Credit properties. Notably, Ranking Member Wyden’s priorities to expand incentives for new production include setting a minimum 4 percent Housing Credit rate and enacting basis boosts for bond-financed projects and developments in rural and Indian areas, which are both provisions of the Affordable Housing Credit Improvement Act (AHCIA) and are included in the ACTION Campaign’s proposals for Covid-19 Housing Credit relief. Also included in the outline is the proposal to correct Qualified Contracts, an Enterprise priority, as introduced in the Save Affordable Housing Act (SAHA). Ranking Member Wyden is a lead co-sponsor of both the AHCIA and the SAHA. Click here to view the outline of priorities.

NCSHA and Novogradac Release Analysis on Impact of Lowering “50 percent test” for Bond-Financed Housing Credit Developments

Last month, the National Council of State Housing Agencies (NCSHA), in partnership with Novogradac, released an analysis on the projected impact of lowering the “50 percent test” bond financing threshold  for 4 percent Housing Credit developments on affordable multifamily housing production. Currently, multifamily developments financed with tax-exempt Housing Bonds are eligible to receive 4 percent Housing Credits if these bonds finance at least 50 percent of total project costs, including land. The analysis projects that lowering the bond financing threshold would result in the production of additional Housing Credit units. For example, lowering the bond financing threshold to 40 percent would free up nearly $37.5 billion in bond authority over the next decade, resulting in the production of over 355,000 additional units. The report provides estimates of additional affordable homes if the bond test were to be lowered to 40 percent, 33 percent, or 25 percent. Lowering the “50 percent test” bond financing threshold for 4 percent Housing Credit developments is one of the ACTION Campaign’s key proposals for immediate relief. Click here to read NCSHA and Novogradac’s analysis .

House Passes $3 Trillion Covid-19 Relief Legislation

Last month, the House of Representatives passed a $3 trillion bill detailing House leadership’s priorities for the next coronavirus response package. The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act , H.R. 6800, would fund a wide range of programs, including critical investments in affordable housing and community development. The bill would deliver $100 billion for Emergency Rental Assistance, $11.5 billion for Homeless Assistance Grants, $5 billion for the Community Development Block Grant (CDBG) program, $4 billion for Tenant-Based Rental Assistance, $2 billion for the Public Housing Operating Fund, $1 billion for New Emergency Housing Vouchers, $750 million for Project-Based Rental Assistance, $309 million for USDA’s Rental Assistance program, and $1 billion for the Community Development Financial Institutions Fund Program Account. The bill would also set up a $75 billion Homeowner Assistance Fund at the Department of the Treasury to provide flexible aid through state housing finance agencies and would extend the CARES Act’s eviction and foreclosure moratoria for an additional year for all dwelling units, regardless of whether they are subsidized or backed by a federal mortgage program.

The HEROES Act  would also provide $1 trillion in aid to state and local governments, include another round of $1,200 economic impact payments, extend unemployment benefits, and strengthen the Payroll Protection and Economic Injury Disaster Loan programs. The bill did not include funding for a few vital programs, however, including HUD’s HOME Investment Partnerships and Section 4 Capacity Building programs. Also absent from the bill are the ACTION Campaign’s Housing Credit priorities. The Senate is not likely to take up the bill as passed by the House, and Senate Leadership has instead said they are monitoring the implementation of previous Covid-19 legislation. For more information, read a blog post from Enterprise’s VP of Policy Advocacy Liz Osborn and see a section-by-section summary of the bill.

2021-2022 Tax Credit Application QAP Notice

Tax Credit Application QAP Notice

It is time once again to begin working on the Tax Credit Application. Please submit any comments, ideas, suggestions, or observations you have for the 2021-2022 Tax Credit Application via our online discussion forum at http://ohfa2021qapcomments.freeforums.net/ by July 17, 2020.

Please follow the edgar.silva.

Important Dates:

An initial draft of the 2021-2022 QAP was posted to OHFA’s website on June 9, 2020.

Please submit all comments regarding this draft to the online discussion forum by 12:00 PM on July 17, 2020. A second draft of the 2021-2022 Application will be posted by approximately July 24, 2020. Comments on this second draft will be accepted until August 2, 2020.

In light of COVID-19, OHFA will be holding the formal public input session covering the 2021-2022 Application via Zoom. Details for this input session are forthcoming.

A final draft of the proposed changes to the 2021-2022 Application will be posted on or about August 28, 2020.

The finalized Application will be taken to the September 16, 2020 Trustees meeting for approval.

The 2021-2022 Application training session will be held in October. The exact date and format will be determined at a later time.

OKC & MWC Temporary Rental Assistance

For those who live in Oklahoma City and Midwest City who suffered financial losses from the coronavirus may be eligible for emergency payment of rent, mortgage, and utilities through the Community Action Agency (CAA) of Oklahoma City and Oklahoma and Canadian Counties Incorporated.

Applications are being accepted both online and in person.

Those who apply must provide copies of utility bills, eviction notices, and the amount they are behind on their bills.

Jessie Thompson, executive director of CAA of Oklahoma City, said that a family of four’s income cannot exceed $59,500 per year to be eligible.

There is a limit of $1 million in funding available for Oklahoma City residents and just over $235,000 for Midwest City residents, so Thompson said that people should apply as soon as possible.

The funds come from Community Development Block Grant funds designated for coronavirus recovery by the U.S. Department of Housing and Urban Development.

Oklahoma City residents can earn up to $3,600 per household while those in Midwest City can earn up to $1,000 per household.

CLICK HERE for more information.

OCC Finalizes New CRA Regulations; Comptroller Otting Resigns

The Office of the Comptroller of the Currency (OCC) on May 20 approved a final rule substantially amending its Community Reinvestment Act (CRA) regulations. The final rule is generally consistent with the proposed rule OCC released late last year but includes some changes in response to public comments.

The rule seeks to simplify OCC’s CRA rules and encourage further CRA activity by changing how banks’ CRA compliance is measured, clarifying what lending and investment activities are eligible for CRA credit, and requiring online banks to finance CRA eligible activities in areas with a substantial number of customer deposits. The new regulations will likely impact banks’ affordable housing investment activities, including Housing Credits and Housing Bonds.

The new rule applies only to those banks supervised by OCC, which oversees all nationally chartered banks. According to OCC, the banks it regulates account for a majority of total CRA activity. The other federal banking regulators, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, did not join the final rule. While FDIC joined the OCC in issuing a proposed rule in December, Chair Jelena McWilliams has said the agency is not ready to move forward with final CRA changes while it and the banks it regulates focus on COVID-related issues. The Federal Reserve has not proposed any changes to its CRA guidance.

On the same day the rule was approved, OCC confirmed media reports that Comptroller Joseph Otting will leave the agency on May 21. Otting, who was first appointed in 2017 and was deeply committed to reforming the CRA regulations, is leaving before his five-year term expires. No announcement has been made as to the reason for his departure.

The final rule goes into effect on October 20, but banks will have until 2023 before they are evaluated under the new standards. Some provisions of the rule do not go into effect until January 1, 2024.

NCSHA is still analyzing the final rule and the impact it could have on HFA programs and affordable housing investments. Some of the rule’s major provisions are summarized below.

“Single-Ratio” Test for Compliance

Under current CRA regulations, large banks must meet three tests to comply with CRA guidelines: the “lending test,” the “service test,” and the “investment test.” The new rule replaces that system with a “single-ratio” test, which measures the total dollar volume of a bank’s CRA activity compared to the bank’s total assets. OCC argues that this approach will greatly streamline the CRA exam process and make it more objective and transparent.

In its comments on the proposed rule, NCSHA raised strong concerns about the single-ratio test and the elimination of the investment test. Without the investment test, NCSHA argued, banks would have substantially less incentive to make affordable housing investments, including Housing Credit and Housing Bond purchases, because they would be able to meet their CRA requirements solely through lending. While equity investments have a much bigger community impact, they are also more expensive and less profitable than lending activities. NCSHA specifically asked OCC and FDIC to retain the separate investment test, as did many other affordable housing advocates.

To offset concerns the single-family ratio test would reduce banks’ CRA investments, the rule allows banks to receive “double credit,” in dollar terms, for certain investments. The list of activities eligible for double credit expressly includes investments in Housing Credits but does not include Housing Bonds (or any municipal bonds). In its comments, NCSHA urged the agencies to include Housing Bonds and HFA mortgage-backed securities in the list of investments eligible for double credit.

Some advocates have raised concerns that the double credit will lower bank investment activities by effectively enabling them to meet their CRA obligations by investing less in dollar terms. To address these objections, the final rule will only allow banks to receive double credit for eligible investments after the quantifiable dollar amount of their eligible investment activities for the applicable evaluation period matches the dollar amount of such activities for their prior evaluation period. For example, if a bank made $100 million in investments eligible for double credit in its previous CRA evaluation period, it will not be able to claim double credit for such investments in its next evaluation period until after it has made at least $100 million worth of such investments.

List of Eligible Activities

OCC also released concurrently with the final rule a comprehensive list of activities for which banks are eligible to receive CRA credit. The list includes Housing Credit investments and Housing Bond purchases, common CRA activities for banks. The final rule also makes eligible for CRA credit any standby letters of credit banks offer as credit enhancements for eligible activities, such as Housing Bonds. NCSHA requested that Housing Bonds and bank letters of credit for HFA programs be included as eligible activities. The final rule will also allow banks to get credit for acting as syndicators and/or sponsors of Housing Credit deals (as well as New Markets Tax Credit deals).

Other notable eligible activities include financing for naturally occurring affordable housing and for targeted activities in Opportunity Zones, both of which NCSHA supports. In its comment letter, NCSHA suggested investments in Opportunity Zones should get CRA credit only if they have a demonstrable benefit to low- and moderate-income (LMI) individuals and communities. In the final rule, OCC says banks should only receive CRA credit for Opportunity Zone investments that benefit LMI individuals and communities, and each investment’s eligibility will depend on its circumstances.

The list of eligible activities is not intended to be exhaustive. OCC also encourages banks to reach out to the agency to determine whether any other activities may be CRA-eligible.

Assessment Areas

OCC is generally keeping its current approach of evaluating bank CRA activity predominately in geographically defined “assessment areas” surrounding a bank headquarters, its branches, and deposit-taking ATMs, as well as areas where a bank conducts a significant volume of retail lending (though the final rule will give the banks the option of not basing assessment areas around deposit-taking ATMs if they so choose). To address the rise in online banking, and ensure banks support those areas in which they do business, the new rule requires banks receiving half or more of their deposits from outside their current assessment areas to make areas generating at least five percent of each bank’s deposits a new CRA assessment area.

Covid-19 Temporary Rental Assistance – Accepting Applications Now through Wednesday, June 10

The Oklahoma Coalition for Affordable Housing was able to secure a small grant to establish a statewide temporary rental assistance fund for low-income households affected by COVID-19.  We are accepting applications ONLY June 10, Wednesday at 10:00 a.m. until 4:00 p.m.  Coalition Members only. First-come, first-served basis. Download Application. For additional details, CLICK HERE.

USDA Implements Immediate Measures to Help Rural Residents, Businesses and Communities Affected by COVID-19

USDA Implements Immediate Measures to Help Rural Residents, Businesses and Communities Affected by COVID-19

WASHINGTON, June 3, 2020 – USDA Rural Development has taken a number of immediate actions to help rural residents, businesses and communities affected by the COVID-19 outbreak. Rural Development will keep our customers, partners and stakeholders continuously updated as more actions are taken to better serve rural America.

View the full stakeholder announcement.