On September 1, the Biden Administration announced that they will begin taking a number of steps to “create, preserve, and sell to homeowners and non-profits nearly 100,000 additional affordable homes for homeowners and renters over the next three years, with an emphasis on the lower and middle segments of the market.”
Policymakers at every level of government have a role to play in removing obstacles to housing production, easing costs and creating a supportive environment for the providers of apartment homes, and NMHC looks forward to working together to further this goal. NMHC strongly believes that breaking down barriers that prohibit the preservation and creation of new housing is critical to increasing housing affordability and we applaud the Biden Administration for their focus on this important issue. According to NMHC and NAA research, our nation will need to build 328,000 new units each year through 2030 to keep up with current demand—the President’s goal of adding 100,000 new affordable homes is an important step in chipping away at this figure.
The President’s proposed plan utilizes Treasury, HUD and FHFA programs and policies to increase financing opportunities and break down state and local barriers. Use the dropdown menu below to access a detailed analysis of the proposal provisions most impactful to the multifamily industry and NMHC’s viewpoint:
- The Biden Administration’s restarting of the Federal Housing Administration (FHA) Section 542(c) Housing Finance Agencies (HFA) Rick-Sharing Program in partnership with the Department of Treasury’s Federal Financing Bank (FFB Risk Sharing) will provide low-cost Ginnie Mae rates to finance the development of affordable rental housing. Unlike the previous program, there will be no dollar limit on the amount of financing FFB will be authorized to provide; and HFAs will have three years to execute the deals.
- NMHC Viewpoint: NMHC has supported the reinstatement of this program after it expired in 2019 to help support the production and preservation of affordable housing.
- The proposal raises the LIHTC purchase cap for each Enterprise from $500 million to $850 million. This is a positive step forward in providing additional equity for each individual deal. FHFA also announced an increase of the Duty to Serve (DTS) rural/targeted investment requirement from 40% to 50% of each Enterprise’s total LIHTC investment capacity, or $425 million in targeted investment and $425 million in unrestricted investment.
- NMHC Viewpoint: NMHC has lobbied for years to expand LIHTC, which would result in more units being produced. While this proposal does not increase the supply of tax credits, it does increase the Enterprises’ purchasing of credits to further ensure stable demand, which NMHC has advocated for since Fannie and Freddie re-entered the market in recent years. The increases in the cap and targeting of investment to affordable rental housing will hopefully enhance the development and preservation of affordable units in areas most in need.
- The Treasury Department plans to pursue changes to emphasize affordable housing production as part of their annual notice of funding availability for the Capital Magnet Fund (CMF). The Capital Magnet fund uses fees from Fannie and Freddie to capitalize affordable housing solutions and community revitalization projects as an exclusive source for Community Development Financial Institutions (CDFIs) and non-profit housing groups.
- NMHC Viewpoint: Better targeting CMF on housing supply through development and preservation activities will help improve affordability challenges in certain markets. The program's allowable participants are narrow, and the White House announcement does not include additional capital beyond what is already provided annually, which are both opportunities to further enhance the impact of policy changes like this one in the future.
Relaunch the Federal Financing Bank and HUD Risk Sharing Program
Increase Fannie Mae and Freddie Mac’s Low-Income Housing Tax Credit (LIHTC) Investment Cap
Make Funding Available for Affordable Housing Production Under the Capital Magnet Fund
- The Administration has proposed the Enterprises expand access to financing for manufactured housing and two- to four-unit properties. Both property types typically serve lower income communities and/or borrowers of color.
- NMHC Viewpoint: Better serving both of these targeted housing market segments will help address broad affordability challenges for certain markets, which is in keeping with the holistic housing policy promoted by NMHC through the NMHC Housing Affordability Toolkit and elsewhere. However, neither program will directly result in an increase in the supply of affordable housing.
Make Financing More Available for Manufactured Housing and Two- to Four-Unit Properties
- HUD will develop a toolkit to help deploy block grants and other resources to support affordable housing supply. HUD will also work with communities to help accelerate and identify solutions to housing affordability challenges
- NMHC Viewpoint: NMHC has strongly supported the idea that states and localities are best suited to offer solutions to housing affordability issues and is encouraged by HUD’s focus on facilitating these solutions.
- The Enterprises will conduct a study to understand to the degree that their mortgage purchases are occurring in areas of exclusionary zoning.
- NMHC Viewpoint: NMHC supports the reduction or removal of barriers to the development of more multifamily housing. We strongly believe that governments at all levels should remove barriers to apartment development, eliminate exclusionary zoning and other discriminatory land use requirements and streamline regulatory burdens. Exclusionary zoning is just one of many barriers that needs to be addressed and NMHC is encouraged by the goal of the Enterprise study.
Leverage Federal Funding to Spur State and Local Action
Explore Federal Levers to Partner with States and Local Governments to Reduce Exclusionary Zoning
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