HUD Publishes 2023 List of Difficult Development Areas and Qualified Census Tracts 2023

On October 25, HUD published its annual listing of Difficult Development Areas (DDAs) and Qualified Census Tracts (QCTs) for 2023 in the Federal Register. These determinations are used for the implementation of the Housing Credit program, as outlined under Section 42 of the Internal Revenue Code.

DDAs are areas in the 50 states, the District of Columbia, and U.S. Territories identified by HUD as facing high construction, land, and utility costs relative to area median gross income (AMGI). The determinations also included considerations based on modified Fiscal Year (FY) 2022 Fair Market Rents, FY 2022 income limits, and 2020 Census data and American Community Survey (ACS) data. Similarly, QCTs are designated by HUD for areas where either 50 percent or more of the households have an income less than 60 percent of the AMGI for that year or have a poverty rate of at least 25 percent. The QCT designation is based on new income and poverty ACS data, which includes the most recent three sets of data to ensure that abnormal estimates caused by sampling variance do not affect the QCT status of tracts.

State Housing Finance agencies may use these determinations to provide a basis boost of up to 30 percent for Housing Credit projects located within these federally designated DDAs and QCTs, if the agency determines the increase is necessary to make the project financially feasible. These basis boosts can be a critical way to allow a property to generate more equity and keep rents lower for tenants. These incentives may help to increase the supply of housing in areas where a ratio of high inherent costs to low area incomes can otherwise challenge prospects for development.

New FHFA Actions Aimed at Boosting Equitable Access to Homeownership

On October 24, the Federal Housing Finance Agency (FHFA) announced that it is eliminating upfront loan guarantee fees charged by Freddie Mac and Fannie Mae (the Government-Sponsored Enterprises, or GSEs) for eligible borrowers and certain GSE-backed single-family loans. The goal of this change is to promote equitable access to affordable homeownership. The new FHFA policy would apply to first-time homebuyers earning up to 100 percent of their area median income (AMI) in most areas of the United States, as well as homebuyers earning below 120 percent of AMI in specific high-cost areas. FHFA is also eliminating upfront guarantee fees for GSE-backed affordable mortgage products, including the GSEs’ low down payment mortgages and GSE-backed loans that support the Duty to Serve program.

This policy change builds on the upfront fee increases for second home loans and certain high-balance loans announced by FHFA earlier this year. It will also be accompanied by targeted increases to the upfront fees for most cash-out refinance loans starting February 1, 2023. Additionally, on October 24, FHFA announced that the agency is transitioning the credit scoring framework for the GSEs to the FICO 10T and VantageScore 4.0 models for assessing borrowers’ qualification for GSE-backed loans. These two credit models include new payment history information when available, such as rent and utilities payments. Including these data points in mortgage underwriting will help households with no credit history or low credit scores qualify for GSE-backed home mortgages by building sufficient credit scores based on on-time rent and utility payments. This issue predominantly impacts households of color, who are more likely to be renters than white household, and often aren’t able to build sufficient credit scores to qualify for financing under traditional credit scoring models.


Incentive Evaluation Commission’s Next Meeting

The Oklahoma Affordable Housing Act is currently under review by the Incentive Evaluation Commission. This is the second time for this highly needed resource to be reviewed since the legislation was passed in 2014.

The Incentive Evaluation Commission (IEC) recently heard public comments on proposed changes to various economic and business incentives under review this year. The IEC’s next meeting is scheduled for Thursday, Nov. 17, at 10 a.m., where they will consider final recommendations to report to the governor and elected officials by the end of the year.

Mark your calendar for Nov. 17 to tune in and learn how certain economic incentives could be impacted. Read more here on the incentives under review in 2022.

Thank you to all of our partners who submitted written comments to the IEC. Stay tuned for the final report.

Vote in tomorrow’s primary elections, Vote YES on OKCPS Bond Issue

With important midterm elections happening tomorrow, Tuesday, Nov. 8, now is the time to make sure you and your employees are informed before heading to the polls. The polls will be open from 7 a.m. to 7 p.m., and the Oklahoma State Election Board’s online voter tool can help you confirm your voter registration, locate your polling place and view sample ballots.

Please forward this email to anyone who might need a reminder to vote tomorrow and take the time to research what will appear on your ballot so you can make an informed vote!

Join a Coalition Committee in 2023

Become more involved with the Oklahoma Coalition for Affordable Housing in 2023! We are currently looking for members who would like to join one of the committees for the 2023 year. Cultivate and expand relationships with other industry professionals across the state and help build upon the Coalition’s success. Fill out the 2023 Coalition Committee Interest Form Now!

Join Us November 15 at the 2022 Coalition Annual Meeting

Registration is open for the 2022 Coalition Annual Meeting. Join us as we celebrate the year in review on Tuesday, November 15, at The Capitol Event Center in Oklahoma City, the evening before the OHFA Board of Trustees Meeting. Registration opens at 4:30 p.m. and the meeting begins at 5:00 p.m.
Member Admission:  $45 | Non-Member Admission:  $75
*Coalition event sponsors will receive an email with registration instructions for their complimentary tickets. Stay tuned…

Submit Your Letter of Support for the Affordable Housing Act

The Affordable Housing Act is subject to review every 5 years. We are towards the end of the review process for 2022. The only opportunity to make public comment is right now. You can do that right now or you can attend the meeting of the Incentive Evaluation Commission (IEC) next Thursday, October 27. To review their report, Click Here.

A sample letter of support template is provided HERE. To submit a public comment, please submit to Beverly Hicks at Comments must be submitted by 5:00 on Monday, October 24. If you are a member of the Coalition and plan to attend the meeting, please email and let us know.