National Policy Update 12/15
Implications of the elections and the FY 2023 budget
The 2022 midterm elections provided the country with some dramatic surprises. Democrats remain in control of the House and Senate during the lame duck session, and they will be working to pass the FY23 budget before the continuing resolution expires on December 16. Along with many of our partners and members, we signed on to the Campaign for Housing and Community Development Funding’s letter urging the highest possible funding levels for federal programs that support our field.
The start of the 118th Congress in January will bring changes to Congressional and committee leadership. Two key champions of shared equity homeownership and community land trusts are retiring: Senate Appropriations Chair Patrick Leahy (D-VT) and House Chair of Appropriations Subcommittee on Transportation, Housing & Urban Development (THUD) David Price (D-NC). Grounded Solutions Network thanks them for their support and leadership, and we wish them well in their post-Congress careers.
The loss of these two voices in Congress highlights the need for our field to prioritize building relationships within the new Congress and ensuring representatives are educated on why they should support housing with lasting affordability to advance racial and economic equity. The policy team at Grounded Solutions Network will be presenting a webinar in early February on how to contact your representatives and advocate for policies that strengthen shared equity programs. More details and registration information will be sent out in the coming weeks.
Public comment submitted to CFPB on a loss mitigation solution that incorporates shared equity conversion
On November 28, Grounded Solutions Network submitted a public comment to the Consumer Finance Protection Bureau (CFPB). The Bureau published a Request for Information (RFI) on forbearance and loss mitigation solutions for distressed households experiencing some form of financial shock, aiming to capture lessons learned from the pandemic.
We used this opportunity to present the concept of a “shared equity modification” loan conversion, where interested borrowers can commit their homes to a shared equity program in exchange for a modified loan that substantially lowers monthly costs and prevents the loss of equity. More details on this process are available in our comment. We greatly appreciate the participation of several member organizations and their partners in this work: City of Lakes CLT, PRG Inc., Houston CLT, Avenue CDC, Chicago Housing Trust, NHS of Chicago, Atlanta Land Trust, and Resources for Residents and Communities.
Public comment submitted to FHA on challenges in accessing small balance mortgages
Many lower income households who purchase shared equity homes have loans that can be considered “small balance” mortgages. There is a lack of access to small dollar mortgages in the housing finance system, and HUD’s Federal Housing Administration (FHA) is currently interested in how prevalent lack of access is, what FHA’s role in this has been, and what kind of policies and regulatory changes can be made to make smaller loans more available. Our comment letter points out the importance of making these adjustments for shared equity borrowers and aligns us with several of our partner organizations in advocating for these changes. Submitted on December 5, our letter can be found here.
Public comment submitted to FHFA on the Enterprises’ Duty-to-Serve Plan Modifications
The Federal Housing Finance Agency (FHFA) requested comments on the Government Sponsored Enterprises’ (GSEs) proposed modifications to their Underserved Market Plans, which are their three-year plans to meet their obligations under the Duty to Serve regulation. Grounded Solutions successfully advocated for the incorporation of shared equity homeownership activities in their 2022–2024 plans. However, we recommended in this letter that both GSEs only incorporate plan modifications that would ensure their activities related to shared equity homeownership are, in fact, increasing access and liquidity to borrowers in these programs.
