3. CAPITOL HILL PERSPECTIVEJeff Riley, Esq.
Democratic Staff Member
House Financial Services Committee
Washington, D.C.
Our committee has been very busy this Spring with the GSE legislation. I was involved with it regarding the rural aspect of it. Making sure that the legislation included manufactured housing, Native American Trust Lands, and of course the Section 515 program; all three of these are very important to Congressman Frank (D-MA). Mr. Frank doesn’t have Native American Housing or any Rural Housing period in his District.
He is very concerned about this Affordable Housing and would like me to pass on to all of you that he would like to hear from everybody regarding what their concerns are about rural affordable housing. On that note, we were kind of disappointed that our phone didn’t ring more during the GSE legislation; we would have liked to hear more regarding rural housing and especially Native American and Section 515 programs and Manufactured Housing.
We did however manage to get that into the Bill. We worked closely with Congressman Ney’s office (R-OH); he was very good about listening to us. We have several specific references to rural in the GSE legislation. We have specific reference to the 515 program. The GSE is to serve the under- served markets. The GSE shall lead the industry in developing loan products with flexible underwriting guidelines to facilitate preservation of Affordable Housing, including housing projects subsidized by the Section 515 program. That’s very important language. Especially the developing loan products and flexible underwriting guidelines.
Linda Goldstein would probably say they need to develop creative products, and we are working with them, pushing Fannie and Freddie to come up with some more creative products for the 515 program.
We feel pretty good about what we did get into the GSE Bill. It has a long way to go — it still has to pass the full House, then it goes over to the Senate, and who knows what they’ll do with it.
The other important part of the GSE legislation, of course, is the funding. I’m sure you’ve heard about this 5% funding we got through. That was pretty interesting. I was surprised with the majority’s reaction to that — a big part of this GSE legislation. We’ve heard a lot from Fannie and Freddie’s competitors, and they’re very concerned about creating a level playing field and not letting Fannie and Freddie do any primary mortgage activities: well of course their charters already prevent that. But they still insist on using this legislation to create a brighter line between primary and secondary market activities.
The majority went to reduce them from 5% to 2.5% and we found that very interesting because these are the loans that their competitors don’t want to make anyway. These are the loans that their competitors you’d think would want Fannie and Freddie to be financing because they’re not loans their competitors would ever want to buy. Moreover, 5% is more punitive than 2.5% when it comes to Fannie and Freddie. In the end we did get a 5% fund. It is very general right now; I’m sure it will go through several changes as it goes through the system. We hope maybe as we get through, especially once we get to Conference with the Senate on the Bill, we’ll have more specific references in that fund. Hopefully, maybe, we can carve out for Section 515 and other rural programs.
Vouchers On the Budget, we were happy to see the $214 million for Vouchers. We’re a little concerned about how that Voucher program works. Of course, Mr. Frank doesn’t want to see any unit lost. Those Vouchers, once the tenant dies or once the tenant moves, are gone. So we were a little concerned about that. The Appropriations subcommittee killed that $214 million, took that out and did fund the 515 program fully at $100 million. So we were happy for that.
I don’t know if you remember that Mr. Frank introduced the Displacement and Prevention Act last year. That was an Act dealing with the preservation of Affordable Housing to save the units from being lost; last year it had an urban section. This year we’re working to add a rural section.
Let us hear from you We’d love to hear from you and what you think should be going into that. We’re going to follow Bill Simpson’s model in what we did last year when he created a 1% loan program for the preservation of 515 units. We’re going to start with that as a model. I’m going to work closely with Bill and try to come up with something. Who knows if it’ll go anywhere; the Majority in the House unfortunately don’t like to see Housing legislation, but we’re going to work closely with our colleagues on the other side of the aisle.
We have a great working relationship them, with Mr. Ney’s staff and other folks. We get along great. Unfortunately, when we get into the bigger House there are more problems. That’s where we stand; we’d love to hear from you. I’m looking at my phone waiting for it to ring to hear from you on rural issues. I’m happy to learn more and happy to get your input.
Next: 4. Capitol Hill Perspectives
Remarks by Clinton Jones