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Past Legislative Successes

2011

On Wednesday, November 23, 2011, the Treasury Department announced an extension of the New Issue Bond Purchase Program and the Temporary Liquidity Facility. NIBP will be extended for one year, i.e. through 2112 and TLCP for three years, i.e. through 2015. In a conference call this morning with the leadership of NALHFA and NCSHA senior Treasury officials outline the legal hurdles that had to be overcome to be able to extend the program. Without going into a lot of detail, they included the fact that Treasury's authority to undertake the program under the Housing and Economic Recovery Act of 2008 has expired, there are cost that have to be offset because there is no current year appropriation to pay for the extension. Among the goals of the extension are to provide more flexibility to HFAs, i.e. to use unused single family allocation for multifamily project(s)so as to maximize available allocations, getting fees to offset the cost of the extension, a change in how interest rates are set (see Term Sheet) and an exit strategy for the NIBP and TCLP programs.

NIBP Term Sheet, 2011 Extension

TCLP Term Sheet, 2011 Extension



2010

NALHFA secured increased formula funding for the Community Development Block Grant (CDBG) program in FY 2010. The amount increased to $3.948 billion, up from the FY 2009 level of $3.60 billion. The Home Investment Partnership Program (HOME) also received a funding boost from $1.6 billion to $1.825 billion. These long-needed increases helped NALHFA members to increase their efforts to expand their efforts in affordable housing and neighborhood revitalization.





2009

NALHFA’s advocacy helped fashion the congressional response to the Obama Administration’s $780 billion economic stimulus package. The final bill, American Recovery and Reinvestment Act (ARRA) provided funding for key programs of the department of Housing and Urban Development including:

 

  • $2 billion for a round 2 of the Neighborhood Stabilization Program, which was originally funded by the Housing and Economic Recovery Act of 2008;
  • $1.5 billion for a new version of homeless housing programs entitled Homeless Prevention and Rapid Housing (HPRP). This program became the prototype for the subsequent enactment of the consolidation of the McKinney Act’s homeless housing programs, Homeless Emergency and Rapid Transition to Housing (HEARTH) Act. NALHFA had worked on this legislation for many years previously.
  • $1 billion in CDBG funds designed to create jobs through undertaking shovel-ready projects;
  • $2 billion in HOME funds for the Tax Credit Assistance program (TCAP) to help achieve project financial feasibility;
  • Tax Credit exchange program to allow unused tax credits to be moved forward;
  • $2 billion in additional Section 8 rent subsidies to cover shortfalls in the regular Section 8 program.

Although not a legislative issue, NALHFA leaders and staff spent 10 months convincing the U.S. Treasury Department to create a program whereby it would by single-family and multifamily housing bonds because local and state Housing Finance Agencies (HFAs) could not sell housing bonds in the capital markets. This was the result of historically low interest rates and HFAs could not fund the negative arbitrage that would result because of the limits on the temporary investment of bond proceeds. The $15.3 billion program enabled 47 local HFAs to participate and sell bonds to the Treasury at the Treasury’s cost of funds. NALHFA achieved many victories in shaping the program, the most important of which was the $25 million "small issuer” exemption whereby all of the bonds could be sold to the Treasury. (See current focus for more detail).




2008

On Wednesday, July 31, 2008 President Bush signed H.R. 3221, the "Housing and Economic Recovery Act of 2008. The massive, 694 page bill contained many of NALHFA’s highest legislative priorities for the second session of the 110th Congress for which members and staff worked so hard. Efforts now turn toward implementation of the bill’s many provisions that will positively affect county affordable housing and community development programs. Attached is a detailed summary of the bill’s key provisions affecting local housing finance agencies.

Highlights of the Bill (HR3211) include:

  • An appropriation of $4 billion in Community Development Block Grant-like funds for the Neighborhood Stabilization Program (NSP1), of which $3.92 billion is for grants to local and state governments for the acquisition, rehabilitation of foreclosed properties. The other $80 million is combined with a separate appropriation of $100 million for foreclosure prevention counseling. There are a number of issues surrounding implementation of this program that are discussed below.
  • An additional, one-time $11 billion in tax-exempt bond volume cap to enable local and state housing agencies to issue Mortgage Revenue Bonds to refinance homeowners with subprime loans who are facing foreclosure, aid first-time homebuyers, and produce multifamily rental housing.
  • A permanent exemption from the Alternative Minimum Tax for tax-exempt single-family and multifamily housing bonds. This is estimate to save issuers 50 – 65 basis points in issuance costs.
  • A one-time recycling of tax-exempt multifamily bond proceeds within 6 months of repayment of the conduit loan used to finance a qualified residential rental project. The refunding bonds do not require a new volume cap allocation and must be issued within 4 years of the date of the original bonds with a maturity of no more than 30 years.
  • An increase in the state Low-Income Housing Tax Credit cap by $.20 (to $2.20 per capita) for each of 2008 and 2009; the small state minimum is increased by 10% for 2008 and 2009.
  • The authority for investors to use Low-Income Housing Tax Credits to offset Alternative Minimum Tax Liability.
  • Creation a Housing Trust Fund to be funded by tapping the portfolios of each of the GSE’s in an amount of 4.2 basis points for each dollar of unpaid principal of its total new business purchases. 65% of the funds are to be allocated by HUD among the states and 35% are placed in a Capital Magnet Fund to be allocated to Community Development Financial Institutions. The trust fund is expected to total approximately $500 million. 75% of the funds are targeted for production and preservation of housing for households at or below 30% of median income.
  • Increase the FHA mortgage insurance high housing cost limit to $625,000.
  • Mortgages to be insured by FHA must be accompanied by a 3.5% of the appraised value of the property cash downpayment. Family members can lend the downpayment to the borrower, which in combination with the first mortgage cannot equal more than 100% of the appraised value plus any initial service charges, appraisal, inspection, and other fees in connection with the mortgage.
  • Effective October 1, 2008, seller-financed down payments are prohibited.

HUD Meeting on Implementation of the $4 Billion in NSP Funds

NALHFA staff attended a meeting July 31, 2008 with the new Assistant Secretary for Community Planning and Development, Susan Peppler, and the staff of the Office of Block Grant Assistance, which was attended by representatives of the U.S. Conference of Mayors, National Association of Counties, National Community Development Association, and the Council of State Community Development Agencies to discuss implementation issues. HUD will draw staff from many different offices to resolve issues, including staff from the Office General Counsel, Policy Development and Research, Disaster Response, the Section108 office. Because HUD staff is limited by the HUD Reform Act and the Administrative Procedures Act in what it can say publicly about how it’s going to handle various issues, the meeting served as our opportunity to make recommendations. HUD did say the Secretary has every intention to meet the deadline of 60 days to write the regulation or guidance (September 28), and the 30 day thereafter allocation deadline.

Formula

HUD staff said that they would use publicly available data for the formula that is specified in the statute: number and percentage of homes in foreclosure, number and percentage of subprime loans, and number and percentage of homes in delinquency or default. NALHFA members should be advised that there is no estimate yet as to what the allocation to individual communities would be. Because this is a different formula no every jurisdiction that currently gets CDBG funds will get these funds.

Division of the Funds between Local and State Governments

The statute makes no provision as to how the funds are to be allocated between local and state governments. NALHFA made the point that since these are CDBG-like funds, and the foreclosure problem is a neighborhood problem, the CDBG statute should be used. This would provide 70% to entitlement counties and cities and 30% to the states. Elsewhere in the statute there is a requirement that each state get no less than 0.5% of the funds. This requirement could be satisfied if state is defined as the jurisdictions in the state rather than just the state government. The state representatives seemed amenable to the 70/30 split.

Administrative Costs

Here again the statute is silent. NALHFA and other local government groups recommended that there be a 20% administrative allowance, the same as the CDBG program. The states want at least 10%, since the 2% they get under the CDBG program is insufficient. HUD had no response to this recommendation.

Citizen Participation and Application

NALHFA recommended a simple, streamlined application, like an action plan with an alternative, streamlined citizen participation process like that which is used with disaster funding.

Funding Threshold

The issue of whether there should be a threshold for receiving direct funding was raised but there was no recommendation from the groups.

Income Targeting

The statute requires that at least 25% of the funds be used to benefit households at or below 50% of median income. NALHFA suggested that this be a nationwide requirement as opposed to a jurisdiction-by-jurisdiction requirement.

Definition of "Use”

The statute requires that a jurisdiction must use all of its funds within 18 months of receipt. HUD initial read of this is that use means the same way as does when used in the context of appropriations bills – spent within 18 months. NALHFA urged HUD to be more open to allowing "commitment” in 18 months rather than spending. Otherwise, this could be a real problem in many situations.

FY 2009 HUD Appropriations

In mid-July, the Senate Appropriations Committee approved the FY 2009 Transportation and Housing and Urban Development appropriations bill. The bill includes a total of $3.89 billion in Community Development Block Grant (CDBG) funds, including $3.7 billion in formula grants, an increase of $110 million over FY 2008. Economic Development Initiative grants total $104 million within that amount. The HOME program would receive $1.97 billion, including $1.94 billion in formula grants, a $310 million increase over FY 2008.

Homeless housing programs would get $1.68 billion up from this year’s $1.59 billion. The HOPE VI demolition and replacement of severely distressed public housing program gets $100 million under the Senate bill, while the public housing capital fund is level-funded at $2.44 billion and the operating fund gets a $200 million increase to $4.4 billion.

Project-based Section 8 rent subsidies get $8.45 billion up from this year’s $6.38 billion, while tenant-based Section 8 gets $16.7 billion, up from this year’s $16.39 billion.

The Senate is not expected to take up the bill.

In early July, the House Transportation and Housing and Urban Development Appropriations Subcommittee approved its version of the FY 2009 HUD spending bill. It provides a total of $4 billion for CDBG ( amount for formula grants is not known), $1.65 billion in HOME fund sand $1.68 billion in Homeless housing funds. The bill was never marked up by the House Appropriations Committee.

Choosing to avoid a veto fight with President Bush, Congress intends to pass a "continuing resolution” in September through the end of the year, leaving completion of the FY 2009 appropriations bills to the next Congress. The resolution will fund programs at their FY 2008 levels.


Summary of the Key Elements of H.R. 322

The "Housing and Economic Recovery Act of 2008” Affecting Local Housing Finance Agencies

Tax Code Provisions

Changes to Tax-Exempt Bonds (All three are among NALHFA’s highest legislative priorities)

  • Provides an additional $11 billion of volume cap for 2008 for issuing Mortgage Revenue Bonds or bonds to finance multifamily rental housing. Bond may be issued to refinance eligible subprime loans (adjustable rate loans made after December 31, 2001 and before January 1, 2008 that the issuer determines will be reasonably likely to cause hardship if not refinanced), provide assistance to other first-time homebuyers, and produce rental housing. Bond proceeds used for refinancing must be used within in 12 months of issuance. Additional volume cap may be carried forward into 2009 and 2010 and only used for housing. Applies to bonds issued after the date of enactment.
  • Provides a permanent exemption from the Alternative Minimum Tax for tax-exempt single-family and multifamily housing bonds. Applies to bonds issued after the date of enactment.
  • Permits a one-time recycling of multifamily bond proceeds within 6 months of the repayment of a conduit loan used to finance a qualified residential rental project. The refunding bonds do not require a new volume cap allocation and must be issued within 4 years of the date of the original bonds and the maturity may be no longer than 34 years. Effective for loans received after the date of enactment.

Changes that Apply to both Bonds and Tax Credits

  • Provides in the case of a building financed by bonds and tax credits that both the bond and tax credit provisions for over-income tenants are satisfied if the next available unit is rented to a tenant who satisfies the income and rent-restrictions. Effective for determinations of status for periods beginning after the date of enactment with respect to bonds issued before, on, or after such date.
  • Conforms the tax-exempt bond rule for students to the rule of the tax credit program. i.e. no credit is allowed for units occupied by full-time students unless those students are comprised entirely of single parents and their children or are married and file a joint return. Effective for determinations of the status qualified rental housing projects for periods beginning after the date of enactment with respect to bonds issued before, on, or after such date.
  • Conforms the tax-exempt bond rule to the tax credit rule with respect to single-room occupancy units, i.e. non-transient units may be eligible even though such housing may provide for eating, cooking, and sanitization facilities on a shared basis. Effective for determinations of the status qualified rental housing projects for periods beginning after the date of enactment with respect to bonds issued before, on, or after such date.
  • Provides that any determination of area median for purposes of the tax-exempt bond and tax credit programs may not be less than that calculated for the previous year. Effective for determinations of area median income for calendar years after 2008.
  • Waives the annual recertification of income requirements under the tax-exempt bonds and tax credit programs for any project as long as no residential unit is occupied by tenant who are not income eligible. Effective for years ending after the date of enactment.
  • Extends to non- housing private activity bonds that are guaranteed by the Federal Home Loan Banks, eligibility for tax-exempt treatment. Effective for guarantees made after the date of enactment.

Changes to the Low-Income Housing Tax Credit Program

  • Increases the state housing tax cap by $.20 (to $2.20 per capita) for each of 2008 and 2009; the small state minimum is increased by 10% for 2008 and 2009; (Among NALHFA’s highest legislative priorities
  • Permits the tax credit and the rehabilitation tax credit to be used to offset the Alternative Minimum Tax. Effective for tax credits attributable to buildings placed in service after December 31, 2007. (Among NALHFA’s highest legislative priorities)
  • The amount of the credit for any building which is placed in service after the date of enactment and before December 31, 2013, and which is not federally subsidized, shall be no less than 9%; Effective for buildings placed in service after the date of enactment;
  • Modifies the definition of "Federally subsidized building” to exclude below market Federal loans (e.g. those funded by HOME funds). Such buildings will receive the full 9% credit. Tax-exempt bonds are considered Federal subsidies and get the 4% credit. This amendment is effective for buildings placed in service after the date of enactment;
  • Allows state housing credit agencies to designate projects that need additional credits for financial feasibility to boost credits by 30% as is permitted in "difficult to develop areas.” Effective for buildings placed in service after date of enactment;
  • Modifies the rehabilitation minimum threshold to the greater of $6,000 (to be adjusted for inflation for buildings paced in service after 2009) or 20% of adjusted basis. This amendment is effective for buildings for which credits are allocated, or tax-exempt bonds are allocated, after the date of enactment;
  • Increases the allowable community service facility space to 25% of the eligible basis of the project as does not exceed $15 million plus 10% of the additional eligible basis. Effective for buildings placed in service after the date of enactment;
  • Clarifies that no basis reduction is required for Federally-funded grants to enable the property to be rented to low-income tenants during the compliance period if those grants do not otherwise increase the taxpayer’s eligible basis in the building. Effective for buildings placed in service after the date of enactment;
  • Repeals the 10% attribution rule used to determine whether parties are related for purposes of determining whether an existing building qualifies for the Credit. Effective for buildings placed in service after the date of enactment;
  • Waives the 10-year prior placement in service rule in the case of any Federally- or state-assisted building including those buildings assisted or financed under Section8 221(d(3), 221(d)(4) or 236 or 515. State-assisted means similar programs. Effective for buildings placed in service after the date of enactment;
  • Repeals the present-law prohibition on using tax credits in building also receiving Section 8 moderate rehabilitation subsidies. Effective for buildings placed in service after the date of enactment;
  • Extends the credit carryover rule, wherein more than 10% of the taxpayer’s reasonably expected basis is incurred, to 12 months after the allocation is made. Effective for buildings placed in service after the date of enactment.
  • Eliminates the bond posting requirement (that a credit-supported project will remain in compliance for the 15 year period). Effective for disposition of interests in buildings after the date of enactment.
  • Adds two additional criteria which states must use in allocating credits among projects: the energy efficiency of the project and the historic nature of the project. Effective for allocations made after December 31, 2008.
  • Provides an additional exception to the general rule that student housing is not eligible for tax credits in the case of a student who previously received foster care assistance. Effective for determinations made after the date of enactment.
  • Provides that projects in rural areas may use the greater of the area wide median income limits or the national non-metropolitan median income for purposes of income-targeting of the program. Effective for determinations made after the date of enactment.
  • Clarifies that a project which otherwise meets the general public use requirements may have occupancy restrictions or preferences that favor tenants with special needs, members of a group specified under a Federal or state program that supports housing for such a group, or who are involved in artistic and literary activities. Effective for buildings placed in service before, on, or after the date of enactment.
  • Requires the Government Accountability Office to study, and report to Congress by December 31, 2012, the effectiveness of the changes made to the tax credit program.

Community Development Block Grants for the Redevelopment of Foreclosed Homes (Among NALHFA’s Highest Legislative Priorities)

  • Appropriates $4 billion of which $3.92 billion is for grants to units of local government and states for the redevelopment of abandoned and foreclosed homes. The other $80 million is combined with a separate appropriation of $100 million for foreclosure prevention counseling.
  • The statute does not specify the allocation between local governments and states, leaving that decision to HUD. (NALHFA will be pushing HUD for a 70% to entitlement cities and counties and 30% to states). Each state must receive no less than 0.5% of the funds
  • Directs HUD to develop a formula within 60 days that directs funding to states and units of local government with the greatest need as need is determined at the discretion of the Secretary based on: number and percentage of home foreclosures in each state or local government; number and percentage of homes financed by subprime loans in the state or local government; and the number and percentage of homes in default or delinquency in each state or local government.
  • Funds must be allocated according to the formula within 30 days of its establishment.
  • Grantees must use the funds within 18 months of receipt to purchase and redevelop foreclosed homes and properties, giving priority to areas with greatest need including those with the greatest percentage of home foreclosures, those areas with the highest percentage of homes financed by subprime mortgages, and areas identified by the state or local government as likely to face a significant rise in the rate of home foreclosures.
  • Funds may be used to: establish funding mechanisms for the purchase and redevelopment of foreclosed homes including soft-seconds, loan loss reserves, and shared equity loans for low-and moderate-income homebuyers; purchase and rehabilitate homes and residential properties that have been foreclosed in order to sell,, rent, or redevelop such homes and properties; establish land banks for homes that have been foreclosed; demolish blighted structures; and redevelop demolished or vacant property. (The statute is silent on using the funds for administrative costs. NALHFA is pushing HUD to allow 20%).
  • Any purchase of a foreclosed home shall be at a discount from the current appraised value, taking into account its condition, and insuring that the purchaser is paying below-market value for the property.
  • Any rehabilitation must meet applicable codes, and energy efficiency or conservation or providing a renewable source of energy is eligible.
  • If a foreclosed property that has been rehabilitated and sold is subsequently resold then the sale shall be in an amount equal to or less than the cost of acquisition and rehabilitation of the property up to a decent, safe and habitable condition.
  • During the 5 years following enactment any revenue generated from the sale, rental, redevelopment, or rehabilitation that is in excess of the cost to acquire and rehabilitate shall be used by the state or local government to the same purposes. After 5 years any profits are to be rebated to the Treasury unless HUD approves a request to use the funds for purposes of this Act.
  • These funds do not require any match.
  • Except as otherwise provided amounts made available shall be treated as if they are Community Development Block Grant funds. The Secretary is given the authority to specify other requirements other than those governing CDBG funds except for those relating to fair housing, nondiscrimination, labor standards, and the environment. If this authority is to be used HUD must provide 10 days notice to the Senate Banking and the House Financial Services Committees.
  • All of the funds appropriated must be used to benefit households whose incomes do not exceed 120% of median income. Not less than 25% of the funds must benefit households with incomes of 50% of median or less.
  • Directs HUD to insure that the sale, rental, or redevelopment of foreclosed homes remain affordable to eligible households for as long as practicable and feasible.
  • Prohibits the use of funds for any project that seeks to use the power of eminent domain, unless such use is for a public purpose (and not for economic development that primarily benefits private entities). Also prohibits making funds available for an organization that has been indicted under Federal election law

Regulation of the Government Sponsored Enterprises (GSEs)

  • Directs the new independent regulator for the GSEs, Fannie Mae and Freddie Mac, to establish single-family and multifamily affordable housing goals that they must meet in terms of purchasing mortgages. For the Multifamily Special Affordable Housing Goal, the GSE’s are given credit for units that are financed by tax-exempt or taxable bonds issued by a local or state housing finance agency if the bonds, in whole or in part, are secured by a guarantee of the enterprise, or are purchased by the enterprise. However, the regulator may give less than full credit for purchases of investment grade to the extent that such purchases do not provide a new market or add liquidity to an existing market. (NALHFA pushed hard to get goals credit for GSE bond purchases).
  • Creates a Housing Trust Fund to be funded by tapping the portfolios of each of the GSE’s in an amount of 4.2 basis points for each dollar of unpaid principal of its total new business purchases. 65% of the funds are to be allocated by HUD among the states and 35% are placed in a Capital Magnet Fund to be allocated to Community Development Financial Institutions. The trust fund is expected to total approximately $500 million. NALHFA and others pushed for administration of the trust by the GSEs so that they could leverage their other investments. NALHFA and others were assured that the larger National Housing Trust Fund (H.R. 2895), into which this funding will be placed once the former is authorized would be allocated 60% to cities and counties and 40% to the states.
  • In the first three years of the program the funds are to be used to cover any defaults on mortgages insured by the FHA that refinanced sub prime loans. 100% of the trust fund monies will be used for this purpose in 2009, 50% in 2010, and 25% in 2011.
  • HUD is directed to develop a needs-based formula aimed at providing housing primarily for extremely-low income families (30% of median income or less).
  • States are required to prepare detailed allocation plans that will ensure that at least 75% of the funds are targeted to the production, preservation and rehabilitation of rental housing and operating costs for extremely-low income households. Funds can also be used for homeownership for extremely low- and very low-income and first-time homebuyer households (limited to 10% of the funds).
  • The Capital Magnet Fund is to be administered by the Treasury Department to administer a competitive program to assist Community Development Financial Institutions or other nonprofit organizations which have as a principal purpose housing development or management of affordable housing.

Modernization of the Federal Housing Administration

  • Increase the FHA mortgage insurance high housing cost limit to $625,000.
  • Mortgages to be insured by FHA must be accompanied by a 3.5% of the appraised value of the property cash downpayment. Family members can lend the downpayment to the borrower, which in combination with the first mortgage cannot equal more than 100% of the appraised value plus any initial service charges, appraisal, inspection, and other fees in connection with the mortgage.
  • Effective October 1, 2008, seller-financed down payments are prohibited.


2007

NALHFA helped its member, The Finance Authority of New Orleans, secure legislation modifying the Mortgage Revenue Bond statute to aide in the recovery New Orleans and other areas affected by Hurricanes Katrina and Wilma. These provisions, which were signed into law by President Bush, waived a statutory requirement that a home has to be more than 20 years old before it can be refinanced and waived another requirement that at least 75 percent of the original walls remain in place before it can be refinanced. By eliminating these requirements issuers of tax-exempt Mortgage Revenue Bonds can take advantage can take advantage of the refinancing provisions of the Internal Revenue Code and help thousands of homeowners refinance their existing mortgages and rebuild their homes.





2006

NALHFA spent much of 2006 focused on FY 2007 appropriations for core HUD affordable housing and neighborhood revitalization. Instead of a complete elimination of the Community Development Block Grant program, the Bush Administration’s FY 2007 budget proposed a $1 billion cut. NALHFA undertook a grass roots effort to reverse the cut. Just before the 2006 congressional elections the Republican leadership decided to stop work on the appropriations bills prior to the lection, leaving the task to the next Congress. The "Continuing Resolution” funding programs at their FY 2006 levels eliminated NALHFA’s hard-fought increases of nearly $200 million in Community Development Block Grant formula funds and $130 million in HOME formula grants.





2005

The Bush Administration’s FY2006 proposed budget included the elimination of the $4.7 billion Community Development Block Grant (CDBG) program, and replacing it with a new $3.71 billion, "Strengthening America’s Communities Initiative” grant program.

NALHFA helped lead a coalition of eleven national associations of elected officials, practitioner, and nonprofit intermediaries in a broad grass roots campaign to save the Community Development Block Grant program, at HUD, and level-funded at $4.7 billion. The campaign has focused initially on restoring funding for CDBG in the FY 2006 congressional budget resolution, achieved through sign-on letters from members in both the House and Senate.

Due to the work of NALHFA and other housing advocates, 58 Senators and 181 House Members signed letters urging their respective committees to include sufficient funding in the budget resolution.

Other activities undertaken by NALHFA and other coalition members included background briefings on the program for House and Senate staff, a press conference at the National Press Club, editorials in the national and local media on the benefits of the program, testifying in support for CDBG and against the Administration’s proposal at several congressional hearings, and individual meetings with appropriations subcommittee staff and staff to individual members pointing out the impact of CDBG on their states and districts.

Due too the grass roots efforts of NALHFA and other organizations, in the final version of the FY 2006 HUD appropriations bill, Congress maintained the program, at HUD, at a funding level of $3.86 billion in formula grants.




2004

Congress did not pass the FY 2004 appropriations bill until 2004. In the conference report, NALHFA succeeded in protecting funding for key programs even though many programs were significantly cut or zeroed out. As a result, CDBG was funded at $4.92 billion, with formula grants reduced only slightly, while HOME was level funded at $2 billion. This was after a .65% across-the-board reduction in all federal programs.

NALHFA declared victory as the Internal Revenue Service (IRS) published new purchase price limits, which are tied to the FHA single-family mortgage insurance limits and updated annually. This was needed because the Internal Revenue Service had refused to update the 1994 safe harbor listing of purchase price limits.

NALHFA succeeded in getting a proposal to repeal the Mortgage Revenue Bond’s so called "ten-year rule” into the Senate version of a Jumpstart Our Business Strength (JOBS) Act. Despite persistent lobbying by NALHFA and others, the provision was dropped by a House-Senate conference committee.

 


 

2003

NALHFA spent much of 2003 protecting the Low-Income Housing Tax Credit and tax-exempt housing bonds from the threat posed by the Bush Administration’s tax-free dividend proposal. The proposal would have resulted in a loss of 40,000 units or 35% of annual production. As a result of the lobbying of NALHFA and others, Congress rejected the Administration’s approach and instead reduced the tax rate on dividends to 15%.

NALHFA succeeded in modifying eligibility criteria to ensure that the Bush Administration’s American Dream Downpayment Initiative (ADDI) would include direct funding for urban counties and consortia meeting the funding threshold.

The 107th Congress passed the FY 2003 bill early in 2003 with the final version of the bill providing a .65% across-the-board cut in programs. Even after the cut, HOME received a $111 million increase in formula grants to $1.86 million. The bill also included $70 million for the Bush Administration’s American Dream Downpayment Initiative (ADDI).



2002

NALHFA continued to build support for two key refinements to the Mortgage Revenue Bond program, including the repeal of the so "ten-year rule” governing the recycling of mortgage prepayments, and an additional method for calculating purchase price limits.

NALHFA succeeded in getting its housing production within HOME proposal included in H.R. 3995, the "Housing Affordability for America Act of 2002.” During markup of the legislation, Rep. Bernie Sanders substituted his competing "National Housing Trust Fund” for the NALHFA proposal.

His proposal was subsequently dropped from the bill that was approved by the Financial Services Committee. Given the controversy over these provisions, the bill was never considered on the House floor.




2001

NALHFA successfully lobbied for a $50 million increase in HOME to $1.85 billion. The bill also included $50 million for the Bush Administration’s American Dream Downpayment Initiative (ADDI).

NALHFA began its campaign to make two modifications to the tax-exempt Mortgage Revenue Bond program, including the repeal of the "ten-year rule” governing the recycling of mortgage prepayments, and an additional method for calculating purchase price limits. NALHFA submitted a series of legislative recommendation to the Millennial Housing Commission including a proposal to create a new rental housing production emphasis within the HOME program.



2000

NALHFA secured an acceleration of the phase-in increase in the volume cap on tax-exempt bonds and Low-Income Housing Tax Credits (LIHTC). The delayed phase-in was passed in 1998 and provided for a five-year increase. Under the acceleration, the bond cap would increase over two years from the greater of $50 per capita, per state or $225 million and tax credit from $1.25 per capita, per state to $1.75, with a $2 minimum per state. NALHFA succeeded in getting the acceleration into all three legislative vehicles that presented themselves. NALHFA successfully blocked a provision that was included in the Senate version of the appropriations bill that would have allocated $1 billion to state housing finance agencies to carry out a new housing production program for households at 30% of income or below. NALHFA insisted that local housing agencies have a share of these new resources. NALHFA lobbied Congress for a substantial increase in CDBG to $5.1 billion, the highest in the program’s history, and an increase $200 million for HOME to $1.8 billion for FY 2001. These efforts resulted in a $170 million increase in CDBG formula funding to $4.4 billion, the first significant increase since 1995.

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