February 23, 2018

Community Developments: FHA Expands Mortgage Relief for 2017 Disasters’ Victims

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  • Yesterday the Federal Housing Administration (FHA) announced expanded mortgage relief to FHA-insured homeowners who live or work in areas impacted by Hurricanes Harvey, Irma and Maria, as well as by the California wildfires and subsequent flooding and mudslides. FHA is instructing mortgage servicers to offer additional options to eligible disaster victims who became delinquent on their mortgages to allow them to remain in their homes. FHA is also introducing a new "Disaster Standalone Partial Claim" option, which will cover up to 12 months of missed mortgage payments through an interest-free second loan on the mortgage that would be paid when the home is sold or the mortgage is refinanced. The goal is to help struggling borrowers to resume their pre-disaster mortgage payments without payment shock. (HUD, February 22) 
  • An article in HUD User highlights a panel at the National Housing Conference’s 2017 national housing policy convening that presented lessons from past disaster recovery and rebuilding efforts. “Housing in disaster recovery,” which featured Marion McFadden of Enterprise Community Partners, Diane Yentel of the National Low Income Housing Coalition, and Steve Ellis of Taxpayers for Common Sense, explored strategies to rebuild more efficiently and better protect communities while more carefully managing public resources. These strategies include: prioritizing the needs of the lowest-income residents; encouraging flexibility and cooperation among federal, state and local agencies and other organizations in disaster relief; and focusing on long-term disaster recovery, rebuilding and preparedness. McFadden noted that flexibility allows recovery programs to adapt to avoid past errors and emphasized the importance of investing in disaster preparedness after media coverage of disasters fades. (HUD User, February 2018)
  • Earlier this week, four Los Angeles City Council members introduced a resolution that calls on all 15 members to support the approval of at least 222 units of supportive housing in each of their districts by July 1, 2020. The resolution, which was seconded by three council members, would create 3,330 supportive housing units citywide and would put the city on track to reach its goal of creating 10,000 units of permanent supportive housing in a decade. Last year Los Angeles voters overwhelmingly approved Measure HHH, a $1.2-billion bond measure dedicated to building supportive housing and other services for homeless individuals and households. However, council members often face pressure to block supportive housing in their districts, and such projects must receive a letter of acknowledgment from the local council member before they can secure Measure HHH funds from the housing department. (LA Times, February 21) 

In Case You Missed It 

  • As previously reported in Community Developments, for the first time since 2012, both Fannie Mae and Freddie Mac requested funds from the U.S. Department of Treasury to cover quarterly losses. Fannie Mae's reported a net loss of $6.5 billion for the fourth quarter of 2017 and will require $3.7 billion from Treasury, and Freddie Mac reported a $3.3 billion loss and will require $300 million. The Federal Housing Finance Agency (FHFA) has directed the government-sponsored enterprises to proceed with their contributions to Treasury’s Capital Magnet Fund and HUD’s Housing Trust Fund on the grounds that their deficits are due to one-time tax losses and do not suggest any underlying financial instability. However, House Financial Services Committee Chairman Rep. Jeb Hensarling (R-Texas) has sent a letter to FHFA Director Mel Watt criticizing the agency’s decision. In his letter, Hensarling argues that Watt’s refusal to automatically stop the government-sponsored enterprises’ (GSE) payments to the funds “as FHFA stated would occur following a GSE draw of new taxpayer funds is unjustifiable.” (American Banker, February 16) 


  • California’s Transformative Climate Communities (TCC) program has allocated $140 million in grants to three communities in the state to help them reduce greenhouse gas emissions and address challenges like public health disparities, housing shortages, pollution and displacement. The first round of TCC grants allocated *$35 million to the neighborhood of Watts in Los Angeles, $70 million to the city of Fresno, and $35 million to the city of Ontario. The program, which is designed to improve public health in disadvantaged communities, targets communities with the greatest burdens from pollution and other health and social indicators in order to encourage them to design their own solutions to urban and environmental problems. (Next City, February 9)
    * The February 9 Community Developments newsletter misstated the grantees. 

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