Public Policy

State:

LEGISLATIVE UPDATE FROM SPECIAL SESSION ON PROPERTY TAXES (from FHC)

The Florida Community Land Trust Institute, a collaboration between 1000 Friends of Florida and the Florida Housing Coalition, is pleased to announce that the Florida Legislature has evidenced substantial support for community land trusts by responding to the ad valorem tax challenge in effectively using the community land trust vehicle.

On June 14 th, 2007, the special session on property tax relief brought with it the passage of what had started out in the general session as HB 1151, filed by Representative Keith Fitzgerald addressing community land trust ad valorem taxes ( Florida Statute, Section 193.017).

HB 1 (2007 B) provides statutory direction to property appraisers to use the restriction on the resale price contained in the recorded ground lease when determining the value of the house and it exempts the value of the land owned by the community land trust . The new statute also defines community land trusts- to be a 501 (3)(c ) organization and has as one of its purposes the acquisition of land to be held in perpetuity for the primary purpose of providing affordable homeownership.

Section 196.1978 which addresses exemption from property taxes, extends ad valorem tax exemption to “land that is owned by an exempt entity and that is subject to a 99 year or longer ground lease for the purpose of providing affordable homeownership”.

Other significant affordable housing property tax legislation:

HB 1 also created Section 193.803 to address how workforce rental and affordable rental housing is to be appraised. The new section makes clear that workforce and affordable rental housing is to be assessed based on the net income generated from the rental development. It sets forth a process for using a Department of Revenue form to annually file for classification as affordable rental housing and defines what housing qualifies (which is basically all rental housing that has received government subsidy and is subject to a land use restriction agreement).

To view the entire 59 page bill, Click Here

Federal:

FLACDC in partnership with other statewide coalitions for community development also follows national policy issues of interest to our industry. The FY2008 Federal Budget recommends cuts to a number of programs that CDCs use to revitalize and redevelop their communities. Many of these programs provide direct funding to city and/or county governments which is then disbursed locally, often to CDCs.

We ask that you familiarize yourself with the information provided. When you contact your Congressional Representatives and Senators, explain to them how the proposed cuts to these programs will hurt your community and their constituents. We will do our best to provide timely updates on some of these programs and we may periodically contact you directly asking for a letter or phone call on a specific issue.

Capitol Hill

HUD FY08 Appropriations Update: Senate Restores Many Levels, Includes $200M for Foreclosure Aid, but Veto Likely. The bill passed by Senate on September 12 would keep $3.77 billion in CDBG, save HOPE VI from de-funding, and provide $200 million in foreclosure aid for nonprofit groups that offer counseling to help troubled homeowners. A House-Senate conference committee will work to resolve differences between that version and the one passed by the House on July 24. Both bills are now numbered H.R. 3074. In the likely event of no agreement by October 1, a continuing resolution will continue funding at FY07 levels. A bill reaching the president’s desk with the current levels likely would be vetoed, according to a warning of such in case of proposed funding exceeding Administration-requested levels (e.g.,   $2.97 billion for CDBG). In spite of that, Senate Democrats are pressing on with their own plans for funding levels in the Appropriations Committee. Contact the committee at (202) 224-7363; Sen. Murray at (202) 224-2621. See postings at http://thomas.loc.gov/home/approp/app08.html .

FHA Reforms Proposed to Counter Foreclosures. A new Federal Housing Administration program offered by the Administration would help perhaps 600,000 to 700,000 homeowners over the next two years, according to a senior HUD official. President Bush, in an August 31 statement, urged Congress to pass FHA reform and provide a temporary tax waiver for owners of homes whose market value has fallen below their loan amounts. HUD Secretary Jackson unveiled the creation of FHASecure, which would offer loan refinancing to credit-strong families who have fallen behind on their adjustable-rate mortgage (ARM) due to its adjusting. At press time, the FHA is expected soon to issue rules that would create risk-based insurance payment premiums. A variation of that plan was proposed by Rep. Barney Frank (D-MA) in a bill that overwhelmingly passed the House but has stalled in the Senate. However, the Senate Banking Committee reportedly is planning to vote September 19 on a bill would raise the limit at which the FHA could insure loans to $417,000 in high-cost localities and reduce the 3% down payment requirement to 1.5%, and allow FHA to charge the risk-based premiums. The Mortgage Bankers Association has announced its support for FHA reforms. For more info, contact HUD at (202) 708-0865; MBA at (202) 557-2924.

Administration Addressing Foreclosure, Officials Meet. As referenced above, President Bush announced a plan to address the foreclosure crisis, including FHA reform. On September 12, Treasury Secretary Henry Paulson and HUD Secretary Alphonso Jackson convened a meeting with major mortgage servicers to discuss the plan, examining the role of servicers in helping struggling borrowers and what types of new products might be needed to fix problems in the mortgage market.

Schumer Proposes to Unleash GSEs on Foreclosure. Senator Charles Schumer (D-NY) last week introduced a bill to extend Fannie Mae’s and Freddie Mac’s loan authority by 10% for one year, to infuse more capital into troubled areas. Currently Fannie's portfolio is capped at $727 billion dollars, and Freddie’s at $728 billion, and both are restricted to a maximum of $417,000 dollars on mortgage purchases. Schumer’s bill would allow these government-sponsored enterprises (GSEs) to purchase loans of as much as $625,000 in high-cost areas. And half of the portfolio expansion—about $73 million dollars for Fannie and Freddie combined—would be required to go to helping borrowers with certain high-risk adjustable-rate mortgages refinance into more-affordable products.

Anti-Predatory Lending Update. At least five bills are in the works or expected. The Borrower’s Protection Act of 2007 (S. 1299) from Sen. Charles Schumer (D-NY) would regulate mortgage brokers and originators under the Truth in Lending Act by establishing a fiduciary duty and other standards of care. In addition the bill outlines standards for brokers and originators to assess a borrower’s ability to repay, and holds lenders accountable for brokers and appraisers. Essentially the bill would deal with lenders that do not underwrite loans to their full rate. These lenders instead use teaser rates to qualify borrowers or do not include taxes and insurance when calculating payments. S. 1222 from Sen. Barack Obama would amend federal law against mortgage fraudsters, and would place particular emphasis on strengthening HUD’s authority to provide borrower counseling and technical assistance. A draft bill from the National Community Reinvestment Coalition (NCRC) specifically addresses mortgage point and fee thresholds that would automatically trigger a fraud alert. For that function it would amend standards in the Home Ownership and Equity Protection Act (HOEPA). The Senate Banking Committee Chairman, Christopher Dodd (D-CT), announced on September 5 that he is going to introduce a bill to reform the mortgage industry and rescue victims of predatory lending. Giving HOEPA more bite reportedly will be among the major provisions. Lenders and brokers have gotten good at avoiding HOEPA trigger points while maximizing the costs of their sub-prime loans, according to Dodd. Senator Hillary Clinton earlier this year announced a legislative initiative emphasizing face-to-face financial counseling, limits on prepayment penalty applicability, and strengthening the Truth in Lending Act and existing federal regulations to ensure plain-talk, no-fine-print disclosure. Action is expected on these bills, according to NCRC, which will conduct a conference call on September 19 at 2:00 p.m. ET, approximately 90 minutes, also addressing bankruptcy legislation as well as GSE and FHA reform. For more info, call (202) 628-8866 or visit http://www.ncrc.org .

Upcoming Hearings on Sub-prime and Credit. Sen. Schumer, as Chairman of the Joint Economic Committee, has scheduled a September 19 hearing on how problems in the sub-prime lending market are spilling over to the broader economy. The next day, the House Financial Services Committee is scheduled to hold its second hearing on the credit crunch, with witnesses including Federal Reserve Board Chairman Ben Bernanke, Treasury Secretary Henry Paulson, and HUD Secretary Alphonso Jackson.

National Fund for Workforce Solutions Launched. Spearheaded by the Labor Department, with backing from business groups and foundations, the program will provide funds to educate, modernize and create job opportunities for low- and moderate-income workers. The Annie E. Casey, Ford, and Hitachi foundations are among the contributors to the $20 million fund. Goals are for $50 million through a protracted recruiting drive, and for 50,000 people to be placed in career-oriented jobs, leveraging $200 million in local funds to help 1,000 employers recruit and train qualified employees. Nonprofits already have taken part in a pilot version in Boston, San Francisco, Rhode Island, Baltimore, and New York. For more info, contact the Hatcher Group, (301) 656-0348 or visit www.nfwsolutions.org .

Infrastructure Financing Bill Proposed. In the wake of the August 1 bridge collapse in Minneapolis, Rep. James Oberstar (D-MN) proposed a Highway System Bridge Reconstruction Initiative. Minneapolis Mayor R.T. Rybak backs the bill, but the Bush Administration is at odds over the financing, which would draw from a 3-year fuel tax increase. Info: House Transportation and Infrastructure Committee, (202) 225-4772.

College Cost Reduction and Access Act Approved by Both Chambers. Adopted in a September 7 House-Senate committee conference report on H.R. 2669 were provisions to count employees of 501(c)(3) organizations as public sector for purposes of student loan forgiveness; reduce interest rates on subsidized student loans; cap required repayments based on available dis cretionary income; and increase Pell Grants in amount and broadening eligibility. The latest summary by the Congressional Research Service (CRS), dated July 11, describes the bill as passed by the House. For more info: hbogdan@mdnonprofit.org .

NAHASDA Reauthorization Approved by House. H.R. 2786 would reauthorize the Native American Housing Assistance and Self-Determination Act through fiscal year 2012 and create a demonstration program for guaranteed loans to finance tribal community and economic development activities. The bill now goes to the Senate.

Other Bill Introductions: Section 3 and Housing Act Reforms, Homelessness Task Force, Veterans Housing. August 1, Rep. Nydia Velazquez (D-NY): H.R. 3310, Earning and Living Opportunities Act (reintroduction of H.R. 5164 from previous Congress), to improve HUD’s Section 3 program by setting requirements on HUD-awarded contractors regarding low- and very-low-income employees. August 3, Sen. Mary Landrieu (D-LA): S. 2008, to reform the single-family housing loan guarantee program under the Housing Act of 1949. August 3, Rep. Steve Cohen (D-TN): H.R. 3385, National Homelessness Task Force Act of 2007, to establish a task force to examine homelessness in the United States and make recommendations to alleviate its causes and effects. August 2, Reps. Al Green (D-TX) and Michael Michaud (D-ME): H.R. 3329, the Homes for Heroes Act of 2007 (identical to S. 1084, introduced on April 10 by Senator Barack Obama (D-IL)), to create position of Special Assistant for Veterans Affairs at HUD, authorize a $200 million assistance program for supportive housing and services for low-income veterans, require HUD to coordinate with the Department of Veterans Affairs, and authorize 20,000 new HUD-VA Supportive Housing program vouchers, among other housing-related benefits. All these bills have been referred to relevant committees.

Comments Sought on…  

Subprime Lending Information that lenders can provide to consumers. Deadline: October 15.   See Federal Register, 8/14/07, pp. 45495-500, or http://www.fdic.gov/regulations/laws/federal/ . Contact Victoria Pawelski, FDIC, (202) 898-3571.

Section 202/811 Design Standard Revisions to allow use of HUD funding for dishwashers and clarify that HUD’s design and cost standards do not apply to Section 811 group homes.   Deadline: October 15. See Federal Register, 8/15/07, pp. 45867-69 or http://www.regulations.gov . Contact Yvonne Jefferson, HUD, (202) 708-3000.

OMB 2007 Circular A-133 Compliance Supplement , which applies to audits of federal fund recipients for fiscal years beginning after June 30, 2006. Due date: October 31. See Federal Register, 6/11/07, 32144–45 or http://www.omb.gov . Contact your federal awarding agency.

News : please remove what’s there and add the following under the ‘news’ page

Funding Available

USDA Rural Energy. Grants to improve energy generation, transmission, or distribution facilities for communities with high home energy expenditures; available to nonprofits and others. Deadline: October 1. See Federal Register, 8/17/07, pp. 46195-207 or http://www.usda.gov/rus/electric/hecgp/overview.htm . Contact Karen Larsen, USDA Rural Development, (202) 720-9545, energy.grants@wdc.usda.gov .

Community Development Financial Institutions Fund. Financial assistance awards to CDFIs, technical assistance grants to CDFIs and potential CDFIs. Deadline: October 31; apply for CDFI certification by October 5. Webcast for applicants: http://www.cdfifund.gov . Workshops scheduled in several places during September. See Federal Register, 8/31/07, pp. 50446-57 or http://www.cdfifund.gov . Contact CDFI Fund staff, cdfihelp@cdfi.treas.gov , or (202) 622-6355.