Trade groups have differing stances on government’s affordable housing plan

Key Takeaways:

– HUD, Department of the Treasury, and White House announced indefinite extension of FFB risk-sharing program
– Program provides capital for state and local HFAs to offer FHA insured multifamily loans at reduced interest rates
– MBA opposes extension, citing unfair competition with private sector and potential safety concerns
– MBA suggests improving existing programs instead of extending the FFB program
– NHC supports extension, sees it as aiding in affordable housing efforts
– FFB program has closed or committed $4.9 billion for 42,000 apartments
– NHC looks forward to working with HUD and Treasury to further capitalize on program success

HousingWire:

Shortly after the U.S. Department of Housing and Urban Development (HUD) and the White House announced plans to extend the Federal Financing Bank (FFB) risk-sharing program, two prominent housing associations shared their differing perspectives on the move.

In a series of policy announcements designed to address housing supply and affordability, HUD, the U.S. Department of the Treasury and the White House announced the indefinite extension of the risk-sharing program between the FFB and the Federal Housing Administration (FHA).

This will provide “an ongoing source of capital so that state and local housing finance agencies (HFAs) can continue to offer FHA insured multifamily loans at reduced interest rates to create and preserve high-quality, affordable rental homes,” according to the White House.

MBA: Risk sharing is ‘unnecessary’

Hours after the announcement was officially released, the Mortgage Bankers Association (MBA) detailed its opposition to the move in a statement from president and CEO Bob Broeksmit.

“While we agree with the Administration that there is a desperate need for more affordable housing supply, extending the FHA-FFB Risk Sharing program is unnecessary, as it undermines the successful FHA Multifamily Accelerated Processing (MAP) program and creates unfair competition with the private sector,” Broeksmit said in a statement.

MAP lenders must follow an underwriting and requirements guidebook that spans nearly 1,000 pages while adhering to Davis-Bacon Act split-wage requirements and complying with stringent environmental standards, the MBA pointed out.

FFB program participants are not obligated to follow the same requirements, which “could lead to less safe housing choices for those most in need,” Broeksmit said.

As an alternative, Broeksmit says the White House should aim to make existing programs “more attractive and useful for participating lenders and borrowers” by reducing or eliminating unnecessary and duplicative fees, raising statutory loan limits, lowering multifamily mortgage insurance premiums and more.

“We will further analyze the initiatives announced today and will continue to call on the Administration, Congress, and industry stakeholders to work together on more affordable and effective lending programs,” he said.

NHC: Extension aids affordable housing efforts

Meanwhile, the National Housing Conference (NHC) lauded the move by the Biden administration and announced its support.

“[NHC] commends the Biden Administration for indefinitely extending the [FFB] Risk Sharing Program,” president and CEO David Dworkin said in a statement. “This joint [HUD] and Treasury program was created in 2015 to close a funding gap in the private markets and stimulate greater affordable housing production.

“FFB funding is an excellent source for state and local [HFAs] to access long-term, fixed-rate financing to construct and preserve affordable multifamily rental housing.”

The FFB risk-sharing program has “closed or committed $4.9 billion for 42,000 apartments,” Dworkin said. Its 2021 reinstatement and new indefinite extension “will ensure continued access to funds for HFAs to facilitate the creation of new affordable housing units.”

He added that NHC looks “forward to working with HUD and the Treasury to further capitalize on its success.”

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Property Chomp’s Take:

If you’re like me and have been following the recent announcements from the U.S. Department of Housing and Urban Development (HUD) and the White House, you may have come across the news about the extension of the Federal Financing Bank (FFB) risk-sharing program. This move has sparked differing perspectives from two prominent housing associations, the Mortgage Bankers Association (MBA) and the National Housing Conference (NHC).

The MBA, represented by president and CEO Bob Broeksmit, expressed opposition to the extension of the risk-sharing program. Broeksmit highlighted concerns about the program undermining the successful FHA Multifamily Accelerated Processing (MAP) program and creating unfair competition with the private sector. He pointed out the stringent requirements that MAP lenders must adhere to and raised concerns about the potential for less safe housing choices for those most in need under the FFB program.

On the other hand, the NHC, represented by president and CEO David Dworkin, praised the Biden administration for indefinitely extending the FFB Risk Sharing Program. Dworkin commended the program for closing a funding gap in the private markets and stimulating greater affordable housing production. He highlighted the success of the program in funding thousands of affordable housing units and expressed optimism about its continued impact on affordable housing efforts.

The differing perspectives from these two housing associations shed light on the complexities of housing finance and the challenges of balancing affordability with safety and competition. As the debate continues, it will be interesting to see how the extension of the FFB risk-sharing program plays out and its impact on the housing market.

In conclusion, the extension of the FFB risk-sharing program is a topic of debate within the housing industry, with the MBA and NHC offering contrasting views on its implications. As stakeholders continue to analyze and discuss the program, it is crucial to consider the diverse perspectives and interests at play in shaping housing policy and affordability.

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