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NALHFA Housing Finance Update 08-05-16

Posted By Administration, Friday, August 5, 2016

HUD Issues Further Comment on HFA DPA Programs

On July 18, Principal Deputy Assistant Secretary for Housing Ed Golding issued a memo following up on previous communications regarding down payment assistance (DPA) programs sponsored by housing finance agencies (HFAs).  The memo indicates that even though previous communications from the Department of Housing and Urban Development (HUD) underscored the agency’s support for HFA DPA programs, HFAs are still obligated to follow all applicable HUD and Federal Housing Administration (FHA) guidelines. 

The notice reiterates HUD and FHA support for HFA DPA programs.  However, according to conversations with HUD staff the agency felt it necessary to emphasize the need for compliance with program guidelines.  Agency staff indicated the memo should not be construed as a move to reverse its position supporting HFA DPA programs. Other updates related to HFA DPA programs, include:

  • NOVA Audit: while the agency considers the DPA issue related to the NOVA audit a settled matter, it is still reviewing the portion of the audit that relates back improper fees charged (by the lender) to consumers (of which HUD concurred with the IG’s assessment).
  • HUD Deputy Secretary Nani Coloretti tasked FHA with developing recommendations and policy guidance surrounding DPA programs. FHA is in the act of following up with that task—which is scheduled to be delivered to the Deputy Secretary in late-August.
  • loanDepot Audit: similar to the NOVA audit, the recommendations  have been forwarded to the HUD Deputy Secretary for a final decision—the decision to move the process up to the Dep. Secretary was made in the Spring, and a final decision from HUD is imminent. Reports indicate that the decision on the loanDepot audit should be similar to the NOVA audit decision.

To view the most recent memo, click here. For more information, contact NALHFA Executive Director Jason Boehlert at 202.367.1225 or

NALHFA Partnering with DC HFA and FHLBs of Atlanta & Boston for Fall Finance Workshop

On October 7, NALHFA will be holding its Fall Finance Workshop entitled Capital Collaborations for Housing and Community Development. The workshop will be help in partnership with the District of Columbia Housing Finance Agency (DC HFA), and the Federal Home Loan Banks (FHLBs) of Atlanta and Boston.  Workshop sessions include:

  • HFA and PHA Collaborations: Learn how PHAs and HFAs can effectively collaborate to affect a broad array of affordable housing and community revitalization outcomes.
  • Leveraging the Community Reinvestment Act as a Community Development Tool: Learn how local HFAs can play a larger role in the CRA plans of banks serving their markets.
  • Collaborating with Federal Home Loan Banks to Advance your Housing Finance Objectives: Learn how HFAs can potentially collaborate with the FHLB system to support locally-based affordable housing and community revitalization efforts.
  • Cutting-Edge Capital Market Financing Opportunities: Learn how local agencies and HFAs are tapping into new and innovative products in the capital markets to underwrite their housing and community development finance needs.

Space is limited! Register today at the NALHFA website, here. Registration for NALHFA members is $100 and non-members is $150.  Hotel and speaker information will be forthcoming. For more information, contact NALHFA at 202.367.1197 or

GAO Report Exams LIHTC Allocating Agencies

In June, the Government Accountability Office (GAO) issued a report reviewing allocating agency administration of the Low-Income Housing Tax Credit (LIHTC) program.  This is the second of three GAO reports focusing on the LIHTC program. The first report, released in July 2015, found that Internal Revenue Service (IRS) oversight of allocating agencies was minimal and recommended joint administration with HUD to more efficiently address oversight challenges (to view, click here).

The most recent GAO report found that allocating agencies administering LIHTC programs have certain flexibilities for implementing program requirements and the agencies have done so in various ways. Although GAO found that allocating agencies generally have processes to meet requirements for allocating credits, reviewing costs, and monitoring projects, some of these practices raised concerns:

  • More than half of the qualified allocation plans that GAO analyzed did not explicitly mention all selection criteria and preferences.
  • Allocating agencies notified local governments about proposed projects as required, but some also required letters of support from local governments. HUD has raised fair housing concerns about this practice, saying that local support requirements could have a discriminatory influence on the location of affordable housing.
  • Allocating agencies can increase the eligible basis used to determine allocation amounts for certain buildings at their discretion, but are not required to document the justification for the increases.

To view the GAO report, click here.  To view a summary of the report, click here.

Legislative News

Updated Version of LIHTC Expansion Legislation Introduced: On July 14, Senator Maria Cantwell (D-WA) and Senate Finance Committee Chairman Orrin Hatch (R-UT) introduced legislation (S. 3237) to expand and strengthen the Housing Credit. Senate Finance Committee Ranking Member Ron Wyden (D-OR) also joined as an original cosponsor. The measure builds on an earlier version of the Affordable Housing Credit Improvement Act (S. 2962), introduced by Sens. Cantwell and Hatch in May.  The Senators indicated they will continue to seek cosponsors for S. 2962, which already has strong bipartisan support, while also beginning to make the case for reforms outlined in the revised legislation. S. 3237 includes all of the provisions from S. 2962 to:

  • Expand the annual Housing Credit allocation by 50 percent. This would make a meaningful step towards addressing our nation’s vast and growing affordable housing needs by enabling the creation or preservation of up to 400,000 new affordable homes over the next decade.
  • Make affordable housing financing more predictable and feasible by creating a permanent minimum 4 percent Housing Credit rate for acquisition and for Housing Bond-financed properties.
  • Permit income averaging within Housing Credit properties in order to preserve rigorous targeting while providing more flexibility and responsiveness to local needs.

S. 3237 adds programmatic modifications to:

  • Make Housing Credit administration more predictable and streamlined.
  • Support the preservation of existing affordable housing.
  • Facilitate Housing Credit development in challenging markets like rural and Native American communities.
  • Increase the Housing Credit’s ability to serve extremely low-income tenants.

To view a summary prepared by the Action Campaign, click here.

Rental Assistance Reform Bill Signed into Law: On July 29, President Obama signed into law legislation (H.R. 3700) reforming federal rental assistance programs.  The legislation, which garnered broad bipartisan support in the House and Senate, is the first major overhaul of federal rental assistance programs in nearly two decades. Key provisions of the bill include:

  • Facilitating broader use of project-based vouchers by allowing public housing agencies (PHAs) to project-base a greater share of their voucher assistance and extend the length of project-based voucher contract terms to 20 years.
  • Simplifying the rules for determining tenant rent payments.
  • Streamlining inspections in the voucher program.
  • Allowing flexibility around the uses of public housing funds so that PHAs can transfer up to 20 percent of operating funds into capital funds in order to make needed repairs.
  • Expanding access to the Family Unification Program for youth aging out of foster care who are at risk of homelessness.
  • Limiting assistance for public housing tenants whose incomes rise about 120 percent of area median for two consecutive years.

For more details on the legislation, click here.

House GOP Tax Plan UnveiledOn June 24, House GOP leaders released A Better Way:  A Pro-Growth Tax Code for All Americans a federal tax reform plan developed by the House Ways and Means Committee.  The proposal outlines broad changes to corporate and individual tax laws. Specific reforms outlined in the proposal include:

  • No direct commentary on municipal bonds, the current tax-exempt status of municipal bonds, New Market Tax Credits (NMTCs), or the Low-Income Housing Tax Credit (LIHTC).  The document does reference the need to eliminate numerous deductions, exemptions, and credits that are viewed as "special interest" provisions.
  • The Alternative Minimum Tax is eliminated for both individuals and corporations.
  • The corporate income tax rate is reduced to 20 percent and individual tax brackets are reduced to three brackets—12-, 25- and 33-percent.
  • The plan retains items such as the mortgage interest deduction and the charitable deduction for individuals and also provide for immediate expensing for corporations and indefinite net operating loss carry-forward.

The plan is expected to serve as the basis for future discussions on tax reform developed by House Republican leaders in 2017. To view a summary of the tax plan, here.To view the Washington Post's coverage, here.

House Approves SIB Legislation: On June 21, the House of Representatives unanimously passed legislation (H.R. 5170) to expand federal support to state and local Social Impact Bonds (SIBs), also called “social impact partnerships” or “pay-for-success” contracts. The bill, sponsored by Reps. Todd Young (R-IN) and John Delaney (D-MD), would establish a new interagency council to identify, support and monitor eligible state and local SIB initiatives. The measure would also create a new 10-year, $10 million fund within the Treasury Department to support state and local SIBs. The bill now awaits Senate action, where similar legislation was introduced last Congress by Senate Finance Committee Chairman Orrin Hatch (R-UT).

First-Time Homebuyer Tax Credit Legislation Introduced: On July 13, Senate Finance Committee Ranking Member Ron Wyden (D-OR) introduced legislation (S. 3175) that would provide first-time homebuyers with a refundable tax credit of up to $10,000, which would be equal to 2.5 percent of the purchase price for homes that are acquired for less than $600,000. Homes purchased between the $600,000 and $700,000 range would receive a smaller credit. The credit would be available to first-time home buyers and would phase out for individuals with annual incomes exceeding $80,000 and married couples exceeding $160,000. To view the bill, click here. To view Wyden’s statement on the measure, click here.

Bank-Qualified Municipal Bond Legislation in Senate: On July 14, Sens. Robert Menendez (D-NJ) and Ben Cardin (D-MD) introduced legislation that would increase the bank-qualified debt limit from $10 million to $30 million. Identical legislation (H.R. 2229) was introduced in the House, last year.  For more information, visit the Government Finance Officers Association (GFOA) website, here.

Regulatory Updates

HTF State Allocation Plan Information Available Online: The National Low Income Housing Coalition (NLIHC) has made available national Housing Trust Fund (HTF) allocation plan information, as well as information on public participation activity.  HTF resources compiled by NLIHC include draft allocation plans, notices of public comment periods, submitted comment letters, and contact information for the State Designated Entity (SDE) responsible for administering HTF dollars. To view, click here.

MSRB to Launch Permanent Series 50 Exam: The Municipal Securities Rulemaking Board (MSRB) will make available the permanent Municipal Advisor Representative Qualification Examination (Series 50) beginning September 12, 2016. As provided for under MSRB Rule G-3, municipal advisor representatives are required to take and pass the Series 50 in order to engage in municipal advisory activities. The score required to pass the Series 50 exam is 71 percent. For more information, click here.

CDFI July 2016 QEI Report: The Community Development Financial Institutions (CDFI) Fund has released its July 2016 New Markets Tax Credit (NMTC) Qualified Equity Investment (QEI) Issuance Report.  The Report provides information on each entity that has not finalized all of its NMTC allocation. To view, click here.

News and Notes

NALHFA Member Authors Tax Exempt Bond Handbook: NALHFA Board Member and New York City Housing Development Corporation Chief Operating Officer and General Council Richard Froehlich serves as co-author of the Beginner's Guide to Tax-Exempt Bonds for Affordable Housing. The Guide is made available through the American Bar Association, here.

Harvard Joint Center for Housing Studies Releases 2016 State of Housing Report: The annual study of housing availability and affordability provides a current assessment of the state or rental and home ownership markets.  According to the study, while housing markets display continued recovery home ownership continues its decade-long slide and gaps in rental affordability persist.  The number of severely cost-burdened renters – those paying more than half of their income in rent – has reached an all-time high of 11.4 million households. The  report also notes  that lack of a strong federal  response to  the affordability crisis has left state and local governments struggling to expand rental assistance and promote construction of affordable housing in areas with access to better educational and employment opportunities through inclusionary zoning and other local resources. To view the report, click here.

$90 million Resilient Communities Initiative Launched: Enterprise Community Partners, the Federal Reserve Bank of San Francisco, Low Income Investment Fund and Natural Resources Defense Council, have launched a new initiative called the Strong, Prosperous and Resilient Communities Challenge (SPARCC).  SPARCC aims to ensure that new investments in infrastructure, climate resilience and health in major U.S. regions benefit low-income communities and people of color.  Six multi-disciplinary teams across the nation will be selected to receive access to a total of $90 million in grant funding, technical assistance, program support and financing to accelerate their efforts over the next three years.  For more information, click here.

Inclusionary Zoning Initiatives on the Rise:  A report by the Urban Land Institute’s (ULI’s) Terwilliger Center for Housing indicates cities are increasingly introducing or strengthening inclusionary zoning policies to address affordable housing challenges.  Inclusionary zoning requires or encourages developers to create below-market rate units as part of market-rate development projects, with the goal of creating workforce and affordable housing that the private market would not produce on its own.  To view the report, click here.

Zillow Reports Widening Housing Affordability Gap: In July, Zillow reported that the housing affordability gap between rich and poor households is widening. Households in the bottom-third of the income bracket can expect to spend twice as much of their income on an entry-level home as those in the top income tier. Currently, the most affordable home-buying markets are located in the Midwest (led by Detroit and Indianapolis), while four of the five most expensive markets are in California (led by San Jose, San Francisco and Los Angeles).  Households earning the median national income and buying the median-valued home can expect to spend 14.8 percent of their income on a mortgage, while median-income renters can expect to pay 30.1 percent of their income on rent. To view, click here.

NALHFA Welcomes Incoming Board Member

NALHFA is pleased to welcome Terry McCarthy, Executive Director, Jefferson Parish Finance Authority (Jefferson, LA) as the newest member of the organization’s Board of Directors.  Terry's appointment was approved by the Board of Directors, on July 15, to fulfill the unexpired term of departing board member Mtumishi St. Julien, who is retiring as Executive Director of The Finance Authority of New Orleans. Terry has served as Executive Director of the Jefferson Parish Finance Authority since 2009.

Tags:  Housing Finance Update 

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HUD Confirms Audit of HFA Down Payment Assistance a Settled Matter

Posted By Administration, Tuesday, June 7, 2016

On May 25, Department of Housing and Urban Development (HUD) Principal Deputy Assistant Secretary for Housing Ed Golding issued a memo indicating “loans that include down payment assistance (DPA) provided by state and local housing finance agencies (HFAs) continue to be eligible for FHA insurance. After conducting a thorough and deliberative process, HUD has determined that housing finance agency down payment assistance programs are legal and consistent with the National Housing Act.  Government entities may provide funds to borrowers to help make down payments on FHA loans.” 

The memo references the recent interactions with the HUD Office of Inspector General (OIG) and that the agency considers the matter to be “resolved and are looking forward to working with housing finance agencies and lenders to make down payment assistance programs work even better for homeowners.” (The law firm of Buckley-Sandler recently released a summary of the HUD DPA issue—to view, click here)

In a June 1st meeting with HUD Deputy Secretary Nani Coloretti and Edward Golding, NALHFA President Ron Williams (Southeast Texas Housing Finance Corporation), Director Maria Day-Marshall (District of Columbia Housing Finance Agency) and Executive Director Jason Boehlert discussed the agency’s dispute of recommendations arising from HUD OIG’s audit of NOVA Financial & Investment Corporation’s (NOVA) participation in local HFA-sponsored DPA programs. 

HUD’s decision confirms NOVA’s ability to participate in HFA DPA programs and its conformity with HUD and Federal Housing Administration (FHA) lending guidelines, in this area.  HUD and the OIG continue to work on DPA matters—an audit related to loanDepot’s participation in an HFA DPA program is still pending.  HUD IG David Montoya recently commented in an article in National Mortgage News that the office “strongly disagreed” with HUD’s decision and they “intended to pursue all avenues at our disposal to continue to convey concerns."  While the HUD IG may choose to continue pursuing its audit activities related to HFA DPA programs, HUD indicated that it considers the NOVA audit to be a settled matter and the lender to be in compliance with FHA guidelines regarding participation in HFA DPA programs.  

During the meeting, HUD references the substantial supporting documentation it had issued underscoring the legality of lender participation in HFA-supported DPA programs, including the Edward Golding memo issued July 2015; an August 2015 interpretive legal analysis issued by HUD General Counsel Helen Kanovksy; and now the most recent May 25, 2016 memo from Ed Golding.

HUD has communicated its decision to HUD Inspector General David Montoya in a decision memo that further elaborates on and reaffirms its interpretation of FHA and HUD DPA guidelines, as operated by local HFAs and other governmental entities.  The memo provides a determination on recommendations raised in the audit, including:

  • “Prohibited Sources” Provisions and Treatment of Governmental Entities: the decision memo references a 2012 interpretive rule that places “no restrictions or prohibitions on how governmental entities (including local HFAs) raise funds for down payment assistance programs” and that once the funds “legally belong to the government entity, that control is sufficient to render them eligible for use as down payment assistance and a proper source for the borrower’s minimum cash investment.” HUD indicates that the governmental entities involved in the NOVA audit served as a “permissible source for borrowers’ minimum cash investment.”
  • Gift Funds: with respect to the NOVA audit, the decision memo indicates that “funds used for the down payment assistance were consistent with the FHA rules governing gift funds,” and “borrowers received grant funds from the governmental entities and were not, in fact, required to repay these grants.” Since there was no expectation of repayment of the DPA, HUD concludes that the DPA “at issue in OIG’s audit is permitted under current FHA rules.”
  • Premium Pricing: the decision memo indicates FHA’s policies regarding premium pricing “were not applicable in the circumstances as alleged by OIG,” and is “only applicable where the interest rate negotiated between the borrower and lender results in a credit from the lender.”
  • Prospective Guidance/Recommendations: The Deputy Secretary’s decision memo indicates concurrence with the OIG’s recommendation that HUD “update all internal control checklists to include specific HUD FHA rules and regulations governing down payment assistance, premium interest rates, and allowable fees.” NALHFA understands that HUD staff has begun this process.

    The memo adds that “the Department believes the down payment assistance program as described in the OIG’s audit is permissible under law and that the OIG has not established a violation of any FHA rules and regulations at the time of the audit, I am directing FHA, in concert with [Ginnie Mae] to review prospectively, and provide to the Deputy Secretary within 90 days any policy recommendation relating to, (1) the role of secondary mortgage market participants in providing financial assistance to governmental entities that in turn use those funds, including funds generated through prior mortgage transactions, to support down payment assistance programs; and (2) any advisable parameters governing such arrangements.” To view the complete decision memo, click here.

It is important to note that while the decision memo only applies to the NOVA audit—a separate decision will have to be issued for the loanDepot audit—the decision sets a precedent for the agency’s position going forward.

NALHFA urges local HFAs to work closely with their lending partners to ensure compliance with all FHA/HUD lending guidelines. While HUD has reaffirmed the ability of local HFAs to raise DPA funds directly from the capital markets (consistent with existing regulations), lenders participating in these programs must still ensure they are adhering to the requisite regulatory requirements.  

HUD has been careful to communicate that this decision on the NOVA audit doesn’t predispose the OIG to refrain from proceeding on another DPA-related issue and that HUD is not in a position to block them. Reports indicate that the HUD OIG continues conducting inquiries of HFAs and the structure of the DPA programs. 

NALHFA will continue to monitor further guidance or formal recommendations from FHA and HUD on this issue, over the next 90 days.  For further information, contact NALHFA Executive Director Jason Boehlert at 202.367.1225 or

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2016 Post Conference Link

Posted By Administration, Tuesday, June 7, 2016

Thank you to everyone who participated in NALHFA’s Annual Conference! All of the post-conference materials have been posted to the website. You will the award summary and power-point presentations.

Once again we would like to thank all of our sponsors:



  • Golden State Finance Authority
  • City of Dallas Housing Finance Corporation



  • George K. Baum & Investment Bankers


  • Raymond James 
  • Morgan Stanley
  • Southeast Texas Housing Finance Corp



  • RBC Capital Markets
  • CSG Advisers 
  • Hilltop Securities
  • Down Payment Resource
  • US Bank Home Mortgage
  • Nortex Housing Finance Corp.
  • Novogradac
  • eHousingPlus
  • The NRP Group
  • North Central Texas Housing Finance Corp.
  • McKinney Housing Finance Corp.
  • Capital Area Housing Finance Corp.
  • eHome Network
  • Chapman Cutler


NALHFA’s 2017 conference will be held in San Franscisco, CA on from April 26 - 29, at the Park Central Hotel. 

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HUD Reaffirms HFA Down Payment Assistance Programs in Wake of IG Audit

Posted By Administration, Monday, July 20, 2015

On July 20, Federal Housing Administration (FHA) head Edward Golding issued a notice to housing finance agencies (HFAs) and lenders in response to a recent Department of Housing and Urban Development (HUD) Office of Inspector General (IG) report criticizing a lender’s participation in HFA down payment assistance (DPA) programs.

The memo asserts FHA’s support of HFA programs and that the agency believes existing rules for DPA programs provides “HFAs the discretion necessary to fund these programs appropriately.”  In addition, FHA is “taking active steps to completely resolve the issues raised in the audit and to provide proper clarity and guidance to the market.”

Earlier this month, the HUD OIG released an audit that found a private lender’s participation in single-family housing programs conducted by HFAs to be in violation of HUD lending guidelines.  In its audit Report, OIG contends that the HFA loan programs being utilized by the lender violate HUD rules for two main reasons: 1) the DPA is derived from a “premium priced mortgage”; and 2) borrowers are making a “repayment” of the DPA grant through an above-market mortgage loan rate. 

Upon learning about the draft findings of the audit, NALHFA voiced its concerns to HUD that the findings could potentially jeopardize HFA DPA programs that have been in place for more than 20 years, which are fundamentally designed to provide responsible access to credit for low- and moderate-income families.

To view the FHA notice, click here.  To access NALHFA’s letter to the agency, click here.  For additional information, contact NALHFA Executive Director Jason Boehlert at 202.367.1225 or

 Attached Files:

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Get Social with NALHFA!

Posted By Administration, Monday, June 15, 2015

Stay up-to-date with affordable housing and community development news by following NALHFA on Twitter and liking NALHFA on Facebook!

What you can expect from NALHFA’s social media updates:

·         The latest municipal news nationwide

·         Pictures and live updates from NALHFA events

·         HUD Updates

·         Low-Income Housing Tax-Credit news and updates

·         Policy and market news

·         Nationwide events

Follow NALHFA on Twitter at @NALHFAnews and “Like” NALHFA on Facebook!

Tags:  Facebook  NALHFA  Twitter 

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NALHFA Post-Conference Link

Posted By Administrator, Thursday, June 11, 2015

Thank you to everyone who participated in NALHFA’s Annual Conference! All of the post-conference materials have been posted to the website. You will find the photos, award summary, power-point presentations, and speaker bios.

Once again we would like to thank all of our sponsors:



·         Housing Finance Authority of Miami-Dade County


·         George K. Baum & Investment Bankers

·         US Bank


·         Raymond James 

·         Morgan Stanley

·         Southeast Texas Housing Finance Corp.



·         Brookstone Partners

·         eHousing Plus

·         Freddie Mac

·         CohnReznick

·         RBC Capital Markets

·         Related Urban

·         First Southwest

·         Chapman and Cutler LLP

·         Atlantic Pacific Communities

·         Down Payment Resource

·         City of Dallas Housing Finance Corporation

·         eHome America

·         Landmark Companies

·         HTG


NALHFA’s 2016 conference will be held in Dallas, TX. Stay tuned for updates regarding the 2016 conference, and our 2015 Bonds & Tax Credit Workshop, being held in Atlanta, GA. 

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Welcome To NALHFA!

Posted By NALHFA, Wednesday, June 3, 2015

NALHFA would like to thank and welcome its newest members:

·         eHome Network, Lexington, KY


·         Industrial Development Authority of Phoenix, Phoenix, AZ


·         Wells Fargo Securities, New York, NY


·         Garland Housing Finance Corporation, Garland, TX


·         Nevada Rural Housing Authority, Carson City, NV


·         Mortgage Guarantee Insurance Corporation, Milwaukee, WI


·         Jones Walker, Baton Rouge, LA


NALHFA is here to serve its members by providing information training and representing on behalf of local HFAs and the affordable housing community nationwide. 2015 is proving to be an exciting year for NALHFA and its members. We are here to aide our membership in understanding and navigating policy, projects and market challenges. Please feel free to contact us with any questions or concerns.


Tags:  NALHFA  new members  welcome 

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