Enterprise Community Partners Leader Provides Congress Suggestions to Address Foreclosure Crisis (see story under Capitol Hill).

Enterprise's 'Inclusionary Zoning: A Tool for Promoting Regional Equity': Online Event on February 27, 2:00 p.m. ET, sponsored by the Ford Foundation. Walking webinar participants through select seasoned and proposed IZ programs, panelists will discuss purposes, goals, the benefits of a "regional equity" approach, dealing with political and cost issues, and incentives. For details and registration information, visit the Enterprise Community Partners websit e.

NeighborWorks America and SONYMA to Partner for Homeownership Promotion in New York State. Under a one-year, $450,000 agreement, NeighborWorks America's Northeast District and local NeighborWorks organizations will work with the State of New York Mortgage Agency to reach out to low-income and minority neighborhoods where the agency's mortgages would be most beneficial. The six NeighborWorks organizations are: Neighborhood Housing Services (NHS) of South Buffalo; NeighborWorks® Rochester; Home HeadQuarters (Syracuse and Binghamton regions); Troy Rehabilitation and Improvement Program (capital and mid-Hudson regions); UNHS Homeownership Center (Mohawk Valley); and NHS of New York City (which also covers Westchester). (More info.)

LISC's 'Getting It Done: New Tools for Communities': March 26-27 in Chicago. Sponsored by LISC Chicago, LISC Sustainable Communities, the MacArthur Foundation, and State Farm, the conference will feature workshops in the following topic areas: Community Engagement; Deal-Making; Communications; Leveraging Resources; Planning; Leading and Managing; Building Community Spirit Through Playing and Creating; Measuring and Evaluating; as well as roundtable discussions and neighborhood tours. For more info, visit the conference website or call (312) 408-2580 ext. 25.

NACEDA Summit to Feature Foreclosure Prevention Panel. NACEDA's experts will examine both the national picture and what states, with the input from CDCs, are doing to solve this crisis. On the State/local level, both legislative achievements and remediation efforts will be discussed. So mark the date--March 31-April 2--for NACEDA's Second Annual Capacity Building and Policy Summit, Washington, DC at the Doubl eTree Hotel. NACEDA group rate of $189 per night is available. Call (202) 232-7000 to reserve room--mention NACEDA Summit to receive discounted rate. (Book early to ensure a room and the rate.)

Track federal legislation at http://thomas.loc.gov.

Stimulus Package Includes GSE and FHA Loan Limit Increases. Signed by President Bush on February 13, the two-year, $168 billion Recovery Rebates and Economic Stimulus for the American People Act of 2008 (H.R. 5140, now P.L. 110-185) includes rebates for individuals and tax breaks for businesses to spur investment as well as provisions that raise the loan limits for government-sponsored enterprises Fannie Mae and Freddie Mac (from $417,000) and the Federal Housing Administration (from $362,000) to 125% of the area median cost of a single-family home and a maximum of $729,750 in high-cost areas through December 31, 2008 (retroactive to July 1, 2007).

FY 2009 Budget Request Released to Congress on February 4, with community development-related program funding levels that have drawn much criticism from advocates. "Critical housing and community development programs are once again underfunded, which will hurt job growth and increase homelessness," Sen. Christopher Dodd (D-CT) said in a statement issued the same day. The Community Development Block Grant program would get $3 billion, amounting to an 18.4% cut that would be "like rubbing salt into the wounds of many lower-income communities already devastated by historically high foreclosure levels," NACEDA Chairwoman Diane Sterner said in a released statement. The Public Housing Capital Fund would be cut by $415 million (17%). The proposed $1.3 million cut to Section 8 voucher renewals could result in the loss of more than 100,000 vouchers currently in use, according to the Center on Budget and Policy Priorities (CBPP). A $50 million (3%) increase for McKinney-Vento Homeless Assistance Grants not only falls far short of meeting the increased demand for renewals of permanent supportive housing, according to the National Alliance to End Homelessness, but is targeted not to existing McKinney-Vento programs but rather to the President's own Samaritan Initiative, which Congress has rejected in several previous budgets. Regarding rural programs, USDA's Section 521 Rental Assistance funding would more than double to $997 million--the "right amount," according to the Housing Assistance Council--but, as in the previous year's request, the Administration would defund USDA's Section 502 direct homeownership loans, Section 515 rental housing loans, and Rural Community Development Initiative, and HUD's Rural Housing and Economic Development. Also on the chopping block this year are Section 523 self-help technical assistance, rental housing preservation, Section 514/516 farmworker housing loans and grants, and $20 million in unused USDA vouchers. HUD budget chart available from the National Low Income Housing Coalition.

GSE Regulatory Reform Hearing Held on February 7 by the Senate Committee on Banking, Housing, and Urban Affairs, the first Senate hearing in the 110th Congress regarding reform of the government-sponsored enterprises. Witnesses included the CEOs of GSEs Fannie Mae and Freddie Mac--who said they support regulatory reform--as well as the Federal Housing Finance Board and the Office of Federal Housing Enterprise Oversight. Much discussion revolved around how the GSEs could help with the subprime mortgage market. Chairman Christopher Dodd (D-CT) urged the GSEs to "live up to their public obligations" to help subprime borrowers in difficulty. Freddie's Richard F. Syron reported that "since May, we have bought about $42 billion of prime rate mortgages that financed borrowers who previously may have found themselves in subprime." Fannie's Daniel Mudd voiced support for creation of an affordable housing fund, but said Fannie wants to retain management of it. Ranking member Richard Shelby (R-AL) agreed that strong legislation is needed, but objected to the nearly 75% GSE loan limit increase that has since become law as incorporated in the economic stimulus package just signed (see above). There was general agreement to use the House-passed H.R. 1427 as a starting point for the Senate GSE reform bill, according to Sen. Thomas Carper (D-DE). Sen. Jack Reed (D-RI) emphasized that the National Housing Trust Fund must be included, and discussed his legislation, the GSE Mission Improvement Act (S. 2391), which sets up an affordable housing program that would address the subprime housing crisis the first year and then operate through the Trust Fund.

Trust Fund Bill Gains Co-sponsors, Endorsements. Sens. Richard Durbin (D-IL) and Sherrod Brown (D-OH) have notified Sen. John Kerry (D-MA), sponsor of the National Affordable Housing Trust Fund Act of 2007 (S. 2523), that they will co-sponsor it. Bishop William F. Murphy, Chairman of the Committee on Domestic Justice and Human Development of the U.S. Conference of Catholic Bishops urged support in a January 22 letter to all U.S. senators. The American Bar Association similarly voiced support in a February 7 letter to Sen. Kerry. The General Board on Church and Society (GBCS) of the United Methodist Church announced its commitment to passage of the Trust Fund, as reported in the Christian Post on January 31.

OCC Comptroller and Deputy Urge CRA Amendment to Address Foreclosure Crisis. Providing Community Reinvestment Act consideration for community development investments in distressed middle-income areas would "give favorable CRA consideration for--and encourage--loans, services, and investments in more communities suffering from the consequences of foreclosures," said John C. Dugan, Office of the Comptroller of the Currency, in a February 12 speech to the National Association of Affordable Housing Lenders. He said the CRA in its 31 years has improved conditions in many underserved communities, and raised the question of whether it should be expanded to include not just banks but also other institutions that provide similar services. The Deputy Comptroller for Compliance Policy, Ann F. Jaedicke, similarly discussed the CRA in testimony the next day before the House Committee on Financial Services. That hearing included three panels of witnesses and testimony by representatives from the Federal Reserve Board, National Community Reinvestment Coalition, and the American Bankers Association, as well as OCC.

Enterprise Urges Congress to Invest in Stabilizing Foreclosure-Distressed Communities. In testimony before the Senate Banking, Housing and Urban Affairs Committee on January 31, Doris Koo, President and CEO of Enterprise Community Partners, emphasized the need for strategic federal intervention and resource deployment to help these communities, which are disproportionately low- and moderate-income. She proposed a Neighborhood Stabilization Fund jointly developed by Enterprise and the Center for American Progress.

Green Block Grant Bill Signed Into Law by President Bush. The Energy Independence and Security Act of 2007 (P.L. 110-140) calls for the creation of a new Energy Efficiency and Conservation Block Grant that would provide green project funding to communities across the country.

Mortgage Refinancing Initiative Act Introduced by Sen. Hillary Clinton (D-NY) on January 31 to "temporarily modify the Mortgage Revenue Bond program to allow state housing agencies to use the proceeds of tax-exempt bond issuances to facilitate mortgage refinancings," according to a released statement. "State housing agencies will be able to commit up to $10 billion over two years to refinancing unworkable mortgages. States will high foreclosure rates will receive the greatest assistance."

Foreclosure Crisis: Comprehensive Plan Proposed by Sen. Clinton. Key provisions would be a 90-day moratorium on subprime foreclosures, a 5-year rate freeze on subprime adjustable rate mortgages, and $30 billion for states and communities to fight foreclosures and offset costs associated with mounting vacancies.

Industrial Bank Holding Company Act of 2008: Mark-Up Hearing Held by the Senate Committee on Banking, Housing, and Urban Affairs on February 13. The hearing addressed benefits of the act and effectively passed the legislation out of committee. Sen. Mike Crapo (R-ID), working on a "non-controversial" package of regulatory relief measures, requested cooperation from committee members, including Chairman Christopher Dodd (D-CT), who committed to it.

How Some Localities Reportedly Are Dealing with Foreclosure Crisis. In Cleveland and Buffalo, judges have ordered banks to cover maintenance costs of foreclosed properties. Cleveland and Baltimore are suing several banks on account of subprime lending practices. Baltimore has launched a public education campaign to encourage homeowners to seek professional housing counseling. Massachusetts now requires a 90-day review period for foreclosures. New York is considering a one-year moratorium on foreclosures. In Ohio, Lucas County has devoted $400,000 of federal Temporary Assistance for Needy Families funding to provide one-time assistance for qualified households to cover late mortgage payments. Older industrial and struggling urban areas have been particularly hard hit with foreclosures. In 4Q 2007, the highest rates were in Stockton, CA; Detroit, MI; and Riverside-San Bernardino, CA, according to RealtyTrac.

State Bankers Release Foreclosure 'Loss Mitigation' Report. In a February 14 conference call, the Conference of State Bank Supervisors (CSBS) discussed findings as reported by 13 major residential mortgage servicers. It was presented that 7 of 10 seriously delinquent borrowers are not on track for loss mitigation, and that lack of contact between servicers and debtors is a major problem. However, a reporter cited figures released that morning by Hope NOW stating that 70 percent of delinquent homeowners were being reached by servicers. According to the CSBS report, servicers have increased their efforts to reach and work with borrowers. Other major findings are that payment resets on hybrid adjustable rate mortgages (ARMs) so far have not been a driving force; homeowners are helping themselves; and the refinance option has nearly evaporated.

CDBG Allocations Data Method to Change to American Community Survey in 2010, according to HUD officials. It will replace the Census Bureau's 10-year data in determining Community Development Block Grant population efforts.

New Guidance on Guaranteed Underwriting System. Lenders are encouraged, but not required, to use the system in underwriting Section 502 guaranteed loans from USDA Rural Development. AN 4330, dated January 30, 2008, is available online or from USDA-RD offices.

HousingPolicy.org Launched on January 29. The National Housing Conference's Center for Housing Studies developed this online guide to state and local housing policy. Highlights include: Policy Toolkit, profiling 22 highly effective state and local strategies; Gallery of Affordable Homes; and a podcast featuring former HUD Secretary Henry Cisneros.

Banks, Lenders Expect Continued Economic Downturn in 2008, according to a quarterly Federal Reserve survey conducted in January. About 75 to 85 percent of domestic and foreign banks reportedly anticipate a deterioration in the quality of their commercial real estate loan portfolios, and 70 to 80 percent of domestic respondents have that expectation regarding their prime, nontraditional, and subprime residential mortgage loans, as well as of their revolving home equity loans. They were found to be particularly pessimistic about loss mitigation strategies designed to help homeowners facing possible foreclosure.

Arts and Culture Can Enhance Community Development, according to Creativity and Neighborhood Development: Strategies for Community Investment, produced by the Reinvestment Fund (a CD organization that invests in the mid-Atlantic region) in collaboration with the University of Pennsylvania's Social Impact of the Arts Project (SIAP) and the Rockefeller Foundation. The publication, newly released with a summary piece, The Power of Place-Making, highlights the intrinsic value of community-based creative activity and offers investment ideas in the areas of creativity, development, and knowledge.

Transit Proximity Valuable to Low-Income Households, according to Reconnecting America and the National Housing Trust, as transportation ranks second in cost for most Americans, after housing. The authors recommend particularly prioritizing the Low Income Housing Tax Credit and Section 8 programs to preserve affordable housing near public transit for easy access to jobs, healthcare, education and community services.

Supportive Housing Increases Neighborhood Property Values, contrary to widely held belief, according to Project H.O.M.E.'s Economic and Fiscal Impact on Philadelphia Neighborhoods, released by said Philadelphia-based non-profit on January 31. House prices within a quarter-mile of 15 Project H.O.M.E. sites (all of which had faced strong local opposition) were found to appreciate over time at a significantly higher rate than the citywide average, about 1.8 percent per year.

CDFI Certification. Due date: March 5. See Federal Register, 2/4/08, pp. 6558-59 or http://www.cdfifund.gov. Contact staff at cdfihelp@cdfi.treas.gov.

HUD Home Equity Conversion Mortgage Regulation Amendments effective February 7 on an interim basis; comments due March 10. See Federal Register, 1/8/08, pp. 1433-36 or http://www.regulations.gov. Contact James Beavers, HUD, (202) 708-2121.

Consumer Lending Protections proposed by the Federal Reserve. Due date: 90 days after publication in the Federal Register. Click for proposal. Contact Kathleen C. Ryan, Fed, (202) 452-2412.

NACEDA Policy Update seeks your state/local news. Please send to Jane DeMarines.

Copyright © 2008 by NACEDA. All rights reserved. Any republication must be credited to NACEDA.