H.R 1776 Seeks to Expand Homeownership
On Thursday, April 6, H.R. 1776, a far-reaching and far-ranging bill with more than a few provisions communities should be concerned about, passed the House of Representatives on a vote of 417-8. Prior to passage, the bill, also known as the “American Homeownership and Economic Opportunity Act of 1999,” was amended to go beyond even its original relaxation of income targeting guidelines. In two different ways, the bill allows Community Development Block Grants and HOME program dollars to serve higher income families than are traditionally served by the programs.
The Senate does not have a complete companion bill. Many of the manufactured housing provisions in H.R. 1776 are in S. 1452, which passed out of the Senate Banking Committee in March. Another bill, S. 1333, contains many of the same “removing barriers to housing affordability” provisions as H.R. 1776. This bill is in the Senate Banking Committee. (National Low Income Housing Coalition, www.nlihc.org)
New Worst Case Housing Report Released
HUD has issued its latest iteration of worst case housing reports, “Rental Housing Assistance – The Worsening Crisis: A Report to Congress on Worst Case Housing Needs,” based on data from the 1997 American Housing Survey. A household is included in the worst case count if it has income below 50% of the area median (AMI), pays over half of its income for housing or lives in severely inadequate housing, and receives no housing assistance. (Not included are homeless families and individuals, whose housing status by definition cannot be assessed through the American Housing Survey.) The number of households with worst case housing needs has grown to 5.4 million.
The growth in the number of families with worst case needs was particularly sharp among working families – the report noted a 28 percent growth in the number of families who had worst case needs while earning the equivalent of full-time work at the minimum wage. The report also cited a loss of more than 370,000 units affordable to families with incomes below 30 percent of area median income, a 5% drop from 1991 to 1997.
Worst case needs are also becoming more concentrated in extremely low-income families, says HUD, suggesting some progress has been made in reducing the worst case housing needs of people with incomes above 30% of AMI. This makes the case for deeper targeting of new housing resources. Worst case needs have also grown in minority households, the report finds, and a greater concentration of families with worst case needs is found among suburban households than urban.
The report is available online.
HUD Publishes Proposed FY 2001 Section 8 Fair Market Rents
On April 28, HUD published its proposed Section 8 fair market rents (FMRs) for FY 2001 in the Federal Register. The FMRs are based on rents at the 40th percentile of rent distribution, estimated for April 1, 2001 based on current trends. Final FY 2001 FMRs will go into effect on October 1, 2000. Comments on the proposed FMRs should be submitted by June 27, 2000. A copy of the FMRs can be found at https://www.huduser.org/datasets/fmr.html (National Housing Conference, www.nhc.org)
Predatory Lending News
Three recently introduced bills aim to crack down on predatory lenders. Senator Paul Sarbanes (D-MD) and Representative John LaFalce (D-NY), ranking minority members on the Senate and House Banking Committees introduced companion legislation that would extend federal protection to more borrowers by making more inclusive standards for what constitutes a high-cost loan, expanding the list of lending practices that are abusive and increasing penalties. Senator Charles Schumer (D-NY) introduced a separate, more restrictive bill that would ban prepayment penalties and the financing of points and fees, and would include those loans that have total points and fees in excess of 4% of the loan amount in the definition of high-cost loans.
On April 12, HUD Secretary Andrew Cuomo and Treasury Undersecretary Gary Gensler hosted a HUD-Treasury Task Force on Predatory Lending. The Task Force will hold hearings to determine how to eliminate predatory lending and then report its findings to Congress.
Also on April 12, HUD released “Unequal Burden: Income and Racial Disparities in Subprime Lending in America,” a study which shows that the number of subprime home loans is increasing in predominantly black and low-income neighborhoods. Key findings of the study show that from 1993-1998, the number of subprime refinancing loans increased ten-fold; subprime loans are three times more likely in low-income neighborhoods than in high-income neighborhoods; subprime loans are five times more likely in black neighborhoods than in white neighborhoods; and homeowners in high-income black areas are twice as likely as homeowners in low-income white areas to have subprime loans. The study can be found on the internet at https://www.huduser.org. (National Housing Conference, www.nhc.org)