Federal Home Loan Banks' Affordable Housing Program Final Rule Webinar

Federal Home Loan Banks' Affordable Housing Program Final Rule Webinar

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Ladies, and gentlemen, welcome. And thank you for joining today's web conference, titled. FHLBanks. Affordable. Housing program, final. Rules webinar. Please. Note that all, participants will. Be muted, for the duration of, this event, you're. Welcome to submit written questions during, the presentation, and these will be addressed your Q&A, to. Submit, a written question please, use the chat panel on the, right-hand side of your screen and choose, all. Panelists. From the sense - drop-down, menu and if. You require, any technical assistance please, send a note to the event producer, and with. That I'll. Probably begin today's web conference, and introduce, Daniel Walton, take. Over the relationship officer. Daniels, please go ahead. Thank. You Russia and good afternoon everyone. This. Is danielle with the Federal Housing Finance Agency. I want, to welcome you all and thank you for taking the time to join us for this webinar on. November, 20th FHFA. Issued, a final rule amending. The Federal Home Loan Banks affordable, housing program regulation. Or AHP joining. Me for today's webinar, agency. Experts, from the office of Housing and Community investment. Will, provide an overview of the final rule including. Changes from the proposed rule and respond. To questions you may have as the. Operator mentioned, throughout, this presentation you, can type your questions into the submitter question box at the, bottom right of your screen please. Be sure to send to all presenters. Once. The webinar has concluded, we will make a recording, available on, FHFA, gov, you, can also find the link to the final rule but. Before we start I'd like to turn things over to Ted wartella for opening remarks, Ted. Thanks. Danielle and good afternoon everyone, my name. Is Ted wartella and I have the good fortune of managing, the office of housing community, that's been here at a Type A thank. You all for joining today's, webinar as most. Of you know FHI, pays been working on changes, to the Federal Home Loan Bank affordable, housing program for some time we. Were very pleased to be able to publish the final rule last month, thanks. Also to everyone who commented on the proposed rule we. Work very hard to understand, your feedback and consider those comments as, we work to finalize the rule and, while it doesn't adopt every recommendation we, believe the final rule expands. The bank flexibility. To, implement their programs, and helps, reduce the administrative burden on the, Home Loan Banks members, and project, sponsors, at. The same time we believe it implements, important, housing priorities, identified by, FHS a, today's. Presentation. Is an overview of the final rule and you. Will have not to ask questions, at the end of the presentation, you, can find much more detail, and explanations. In the preamble which. Is posted on our website I encourage. All of you to read that as well and for, any additional questions we don't get you today we also provide contact, information for, a fictive a staff at the end of the webinar, lastly. One final thank you this one to the Home Loan Banks themselves, provide, for providing the photos of.

AC Projects, around the country that, you'll see in, today's presentation and. Now. To start the presentation let. Me turn it over to Lauren voice Thank. You Ted cerise. Has developments. With the proposed rule, FHFA. Started, with the 60-day, comment period for the proposed rule which, we extended, to 90 days in response to numerous requests, from commenters, the. Extended, public comment period on the proposed rule ended. On June 12, 2018. FHFA. Receives, 394. Comment, letters on the proposed rule. This. Slide breaks down the comment letters that we received on the proposed rule by type of commenter, of the. Total letters you received. 251. Expressed, unique comments, and recommendations with. The remaining, 143. Being form letters or requests to extend the original, 60-day, comment period, the. First team letters we receive from Federal, Home Loan Banks, included, steps several, joint letters as well as, letters from individual, Home Loan Bank and. All. 73%. Of the comment letters address the proposed outcome-based, framework. For project selection. 25%. Of the comment letters address the proposed, owner-occupied. Retention, agreement requirement and 20%. Of, comment letters address the proposed requirements for, project, sponsor, qualifications. FHFA, posted, the final rule on the FHFA, website, on November 20th and published. In the Federal Register on, November, 28, 2018. The, file path for the final rule is shown in this slide. And now, turn it over to Marcia berry endure to discuss the final rules HP, funding allocation, and project. Selection provisions. Thank. You Lauren I'm going to start on the slide with HP, funding, allocations. As many. Of you know the, current HP, regulation. Authorizes. The Home Loan Banks, to establish, an administer to programs, for providing. HP, subsidies, a mandatory. Competitive. Allocation, program and, an optional, homeownership, set-aside, program, the. Final rule authorizes. The Federal Home Loan Banks, to establish, three programs, providing, HP sensitive the. First program, is a mandatory, competitive. Program also, known as the general fund which, is fairly similar to the competitive, application. Program, authorized. Under the, current regulations, some. Of the scoring criteria for, the general fund are different, from the scoring, criteria, for. The competitive, application, program under the current regulation, I'll, discuss. Some of those on the next slide, the. Second programs that the final rule continues, to authorize is, the optional, homeownership, set-aside, program, the, final rule also authorizes. Banks, to establish, a third program, a new, kind of competitive, application, program known, as targeted funds. Targeted. Funds are optional, on. This. Next slide, I'm going to move on to discuss the scoring criteria for. The general fund in the final rule, I'm. Going to start by noting that the final rule does not. Adopt the outcomes, based framework for, project selection which, was included in the proposed rule. Instead. The, final rule amends, the current regulatory, scoring. Framework, for project selection to, provide the home loan banks with additional, flexibility. In designing, their project selection scoring, systems. The. Scoring framework, in the final rule is similar to the recommendations. Made, by the Home Loan Banks in, a joint comment, letter but, it contains changes, to reflect particular. FHFA. Policy, objectives. The. Scoring framework, in the final rule has a hundred, points, allocated. To either of six or seven mandatory, scoring, categories. If. A home loan bank allocates. 10%. Or more of its, annual HP. Allocation, to, its home ownership set-aside, program. There. Are six, mandatory. Scoring criteria if. The. Home loan bank does not allocate 10%. Or more of its. HP allocations. To its set-aside, program, there. Are seven mandatory, scoring criteria. Now. I'm going to walk through the chart, on the slide. So. Starting, from the top of the chart how. Long things must, allocate five points, or more to, each of two mandatory, statutory, priorities. One. For properties, donated, or conveyed by the federal government, and a, second, for projects sponsored, by, nonprofit. Or government entities. As I. Just mentioned, if a home loan bank does not allocate 10 percent or more to its set-aside, program, it, must also allocate, five points, or more to, a mandatory, statutory, priority.

For, Home purchase, by low or moderate income households so you can see that in the chart. In. Blue. So. Looking at the middle of the chart home. Loadings, must also allocate, points, to for mandatory, regulatory. Priorities, the, first priority, is targeting, to lower-income households, the. Second priority is underserved, community, from populations. The. Third is creating, Economic, Opportunity and, the fourth priority is community, stability. Including, affordable housing, preservation, I'll. Discuss, some of these regulatory, priorities. In more, detail on the next slide. In. All, each. Removing must allocate a minimum, of 50 points to these mandatory statutory, and, regulatory scoring. Criteria. Under. The final rule homeland. Banks can allocate, up to 50 points housing, need priorities, in their district that they identify if they, so choose. This. Is, shown at the very bottom of the chart, unlike. The current regulation. The final rule does not require, the Home Loan Banks, to allocate, points, to a first and a second, District priority, under. The current regulation, Home, Loan Banks must allocate five or more points to a first District priority. Selected. From a list of twelve housing, needs and five. Or more points to a second, disc of priority, of their choice. The. Proposed rule would have authorized, the Home Loan Banks to design our own scoring, systems within, an outcome-based framework. Each. Home Loan Bank would, have been required to award, specified, percentages, of. Its. Annual HP. Funds to projects, meeting specific, outcome requirements. The. Proposed outcome framework was intended, to address inputs, from the home loan bank from stakeholders, by, providing, the Home Loan Banks greater flexibility. To design their competitive, application, programs, to, meet their district housing needs however. Commenters. Put the scoring based framework over an outcome-based framework. The. Federal Home Loan Banks, are members and project. Sponsors, had used the scoring based framework since. HP, inception, in 1990. Okay. This next slide lists, three, of the general fund regulatory, priorities, in the final rule. FHFA, developed these scoring priorities, based, on the priorities, in the current regulation, the. Priorities, our proposed rule and, comments. Received including a proposal from the Federal Home Loan Banks. Under. The final rule the. Federal Home Loan Banks, must allocate a minimum of, points, to each of these three regulatory priorities. One. Underserved. Communities, and populations, to.

Creating. Economic, opportunities and, three, community. Stability including. Affordable housing, preservation. Within. Each of the regulatory priorities. Things, have flexibility. To choose the housing needs to be included in their scoring framework, for. Example, under. The creating, Economic Opportunity regulatory. Priority, a, banks. Could choose to include only promotion. Of empowerment, and exploring, frameworks, or. It. Could choose to include only residential. Economic, diversity, in a scoring framework, or, another housing needs that the. Agency, provides and diamonds or. The, Federal Home Loan Bank, could choose to or even all three of these housing, needs to meet the, creating, economic, opportunities regulatory. Priority, on. This. Next slide we continue, the discussion of. FHFA, regulatory, priorities, this. Slide focuses particularly, on several, housing, needs under, the underserved, communities, and populations. Regulatory. Priority. The. Final rule retains, the current regulations, targeting, thresholds, for special, needs and homeless households at, 20%, of, total projects units, instead. Of the proposed increase to 50%. The. Final rule also establishes. Our 20%, targeting. Threshold, for other targeted, populations. Instead. Of the proposed 50%. Threshold, in. Addition, the final rule, makes the change regarding. Supportive, services, the. Proposed, rule would have required projects. With, unit serving, special, needs populations. To, provide supportive, services or, access, to services, for the special needs population. Served the. Final rule does not include, this requirement, and. Now. I will turn it over to Eric Howard to discuss targeted. Thank. You Marcia as, 4cm. Mentioned earlier one, of the biggest changes to the AHP, in the final, rule is that, the Federal Home Loan are, now authorized, to establish, competitive, targeted, funds, target. Funds can assist Home Loan Banks in addressing. District housing needs that, are challenging, to reach using the existing scoring. Framework, a. Home. Loan bank that decides to establish. A targeted, fund must. Design, the targeted, fund to receive sufficient, numbers, of applicants. To facilitate, a robust, competitive, scoring process. Under. The final rule and subject, to faith and requirements. Home Loan Banks may allocate up to forty percent of, their total annual. AHP, funds to, establish up, to three targeted, funds each. Targeted, con must, be competitive, and must, have a scoring, rubric that includes, three separate, and distinct. Scoring, criteria. The. Scoring rubric must, have an allocation of 100, points just. Like the general fund, home. Loan banks may allocate a maximum, of 50 points to anyone scoring. Criterion. The. Final rule continues, the requirement, that each Federal, Home Loan Bank is must adopt an annual, targeted. Community, lending plan the. Final rule requires the, Home Loan Banks, identify, and assess significant, affordable, housing needs in their districts that we address. Through the a HD in their plans, in. Addition, if, a home loan bank plans, to establish a, targeted fund the. Final rule requires that, the bank specifies. A particular, affordable. Housing, need it will address through, that targeted, fund in its plan the. Final rule also requires the. Home loan banks to publish their targeted, community lending plans at least 90, days prior to the opening, of the application. Round for the targeted, fund, the. Final rule makes an exception to the publication requirement. For targeted, funds for federal or state declared. Disasters, and Federal. Home Loan Bank that establishes, a targeted, fund for federal or state declared, disasters, is not, required, to publish, its plan mining, days before, the opening of its application, round.

I'll. Now. Move on to discuss. Sponsored. Qualifications. Under the final rule which. Will apply to applicants. For the general fund or any targeted, funds, the. Final rule requires the, Federal Home Loan Banks, to evaluate, the qualifications. Of and any, covered, misconduct by, the project, sponsor, at a HP application, and before. Each AHB, subsidy, disbursement. The. Home Loan Banks AHP subsidy. Application. Form and a, HP subsidy. Disbursement. Forms must. Include a requirement, for the project, sponsor, to certify, that it needs the Home Loan Banks, qualification. Criteria and, that, it has, not engaged and, covered misconduct. The. Federal Home Loan Banks, are not required, to evaluate the qualifications. Or, any misconduct, of, the project, sponsors, affiliates, team, members, and general. Contractors. As well as proposed. The. Next slide covers, changes, in the final rule to the optional, homeownership. Set-aside. Programs. Under. The final rule the, maximum. Annual funding. Amount that a home loan bank may allocate for homeownership, set-aside. Program. Remains. At the level in, the current regulation. Which. Is the greater of 35 percent of the home loan bank annual, total AHP contribution. Of, 4.5. Million dollars, the. Proposed, rule would have allowed a home loan bank to allocate, annually, up to the greater of 40% for. 4.5. Million dollars. FHFA. Is maintaining. The current 35. Percent maximum, set-aside. Funding, allocation. The. Federal Home Loan Bank is and a number of homeownership, advocacy. Organizations. Supported. Increasing, the maximum, allocation. However. Numerous organizations, pointed. To a national, decrease, in available, affordable rental. Housing for, very low income households, they, also pointed, to the possibility that. The proposal, would result in a reduction in AHP. Funds awarded to rental housing projects, under, the general pot. Final rule also increases, the current maximum satisfied. Subsidy, per household, limit, from. $15,000. To. $22,000. Subject. To annual upward. Adjustments, based on FHFA. S house, price, index. Each. Home Loan Bank has discretion. To establish, a set-aside subsidy. Per household, up, to the. $22,000, limit, finally. The. Final rule revises the current, one-third set-aside, funding, allocation, which, requires, that one, third of the set-aside, funding, allocation, must, be allocated, to first-time, homebuyers. To, also, include. Owner-occupied. Rehabilitation. Or a combination. Of both first-time, homebuyers, and. Owner-occupied. Rehabilitation. And. Now, I'll turn to the provisions, for rental, project, monitoring, in the final rule the. Final rule streamlines, the current, monitoring, requirement.

By, Removing, the requirement for the Federal Home Loan Banks, to review, back up household, income, and read documentation. At initial. Monitoring, for AHP, projects, receiving. Low-income. Housing. Tax credits. The. Final rule also streamlines. Monitoring. Of rental projects, by authorizing. The Federal Home Loan Banks, to rely on the monitoring, of certain other governmental, entities, for. AHP projects, that also receive, funds from those entities with. Those government, programs, to be specified in, separate, FHFA. Guidance. Specifically. It removes the requirement that, the Federal, Home Loan Bank review, back the household. Income and read, documentation. During. Initial and long-term monitoring, for such program, project. Aunt. HSA, plans to issue guidance, soon, that, will initially include, for government, programs HUD, section. 202, and, section. 811, programs. And the, USDA's. 514. And 515. Programs, these. Programs are included because there, come rent. And retention. Requirements. Are similar, to, the standards, for the AHP these. Programs, also have, very, low rates of non-compliance. Moving. Forward, FHFA. May add or, remove, federal. Housing programs, through guidance. This. Slide identifies, another. Final, rule provision, regarding rental project, monitoring, the. Final, rule requires that, project. Owners notify, the, Federal Home Loan Banks, in the case of material, and unresolved. Non-compliance. With, light tech household. Income, targeting, for rent requirements. During, the AHP, 15, year retention period, I'm going. To now turn the presentation over, to chippy Moore who, will discuss homeownership, retention. Agreements, and a HP project, non-compliance. Under the final rule great. Thanks, Eric, and. A significant, change from, the proposed rule the, final rule eliminates the requirement for. Homeownership, retention, agreements, where a household, uses HP subsidy for rehabilitation only. But, retains the requirement, for homeownership, retention, agreements, where a household, uses the HP, subsidy, for purchase, or purchase. In conjunction with rehabilitation of, the units these. Requirements, apply to the competitive, and homeownership, set-aside, programs, there. Is no option for discretion, for the home loan banks to maintain retention. Agreements, for unoccupied, rehabilitation. Many. Comments, are supported, the use of homeownership retention, agreements, on the basis, that they help deter quitting or other, types of fraud, based. On the comments particularly. From organizations. With extensive, expertise, with the HP, and similar programs public. And private that, offer comparable, assistance, FHFA. Was persuaded, that retention agreements, may play a significant, role in deterring. Abuse and slipping as well as protecting homeowners, from predatory lending scheme. FSA. Opted, to eliminate, the retention or excuse, me the requirement, for retention agreement, for, rehabilitation. Only, because quitting is unlikely, many. Of the recipients, of HP sub C for rehabilitation. Our long-term homeowners. Who are often elderly, or disabled, requiring. Accessibility. Improvements to, their homes or deferred, maintenance that needs to be addressed for the home to be castable they. Are generally less likely to move within a five-year period and. A. Change from the approach in the current regulations, the. Final rule requires the, Home Loan Banks, to use a subsidy repayment calculation. Based. Upon net proceeds and the cost of the households, investment is documented, to, determine the amount of HP subsidy, available, for repayment if, the home is sold within the five-year retention period the.

Next Slide will illustrate how HP, subsidy, will now be calculated, for repayment in, an. Effort to reduce the administrative burden, to the Home Loan Banks and members the, final, rule provides for, an exception, to the HP subsidy, repayment requirement. For. Households. Where the amount of HP subsidy. Subject, to repayment is, $2,500. Or less this. Will be discussed in greater detail, on an upcoming slide. The. Final rule also retains, the exceptions, to the HP, subsidy, statement requirement if the assisted. Unit is sold to a low or moderate, income household. That authorizes, the use of proxies, in the absence of actual documentation. Of the, subsequent purchasers, income. FHFA. Anticipates. That the use of proxies, will ease operational. Burdens for the home loan banks and their members this, will also be discussed in, detail on, a forthcoming slide. It. Is important, to note that the mandatory compliance State, for. The Home Loan Banks to implement, the, homeownership, retention, agreement provisions, is January, 1st 2020. But, a home loan bank may choose to implement, these provisions, and other related provisions earlier, their so desired. So. How. Does the subsidy, recovery calculation, work for. The purpose of the discussion of this slide Home, Loan Bank is used understanding. That the steps in have to be performed by the bank but may be completed, by a member, designated by, the home loan bank also. The. Discussion, of the subsidy recovery calculation. Is focused, on the sale of a unit as is, the most common transaction, that triggers repayment the calculation. Is slightly, for refinancing. If. A helpful bills are refinances, the HP, assisted home during, the five-year retention period this may trigger recovery, from available net proceeds. It's. Provided, amount of the HT subsidies, that the house oversees, upon the purchase of their home first. A home. Loan bank calculates, the pro rata steps the amount available for, recovery and provided. On the slide. Consistent. With the current regulation, the, final rule requires that the HP subsidy, be reduced on a pro-rata basis, for, the time that the house will own the unit however, where. The current regulation, provides generally, for this reduction annually, you'll, note that the final rule reduces, the original HP subsidy, on a pro-rata basis, monthly this. Is consistent, with current home loan bank practice. Next. A home. Loan bank calculates, the net proceeds available. From the sellers at home and as. A Parcher from the net gain calculation. Used by the home loan things all, data, required, for the net proceeds formula. Is available, on the closing disclosure statement. Net. Proceeds for. Available, homes is defined, as sales, Christ -, outstanding superior. Debt and any, reasonable and, customary sellers high transaction, costs. You. Will note that this trend that this calculation, does not include. The HP subsidy, originally, provided to the household as, it is not added to the net proceeds or. Subtracted, from any components, of the calculation. Since. The HD final rule limits retailing to available, net proceeds and, Home Loan Bank can only recover what is available, from net proceeds. Step. 3 to. Ensure that a household enjoys the benefits of home ownership the, HP, subsidy recovery calculation. Prioritizes. A household, retaining. Its investment, in the home of Panchal or refinancing. Households. That invest resources in their home in the form of downpayment, repayment, of principal on senior debt reasonable. And customary costs, paid in connection, with the purchase of the unit such, as brokerage Commission and title search teams and the, cost of documented, capital improvements, are committed, to recover those expenses, before, we're paying any portion, of the HP subsidy.

Remember. That no HP sub C can be recovered by the Home Loan Bank unless, the net proceeds exceeds. The households, investment. Force. If, any net proceeds remain, after, the household retains its investment the Home Loan Bank recovers, up to their pro rata subsidy, recovery, amounts calculated, in step 1, and finally. Step 5, if. There are any remaining net proceeds after, the household retains its investment, and the home loan bank recovers, their pro rata sub to the amount the, remaining net proceeds are, retained by the household. As. Just discussed the, net proceeds approach, in the final rule permits. The household to recover its entire investment, in the home before. Retained, their pro rata HT, subsidy, dues in, instances. Where there are insufficient, net proceeds occur, to recover the amount to the HP. Assisted household, is not responsible, for paying the difference between the amount of HP sub we do and the, amounts available, for net proceeds. And. Now I will, discuss two exceptions, to the HP, subsidy repayments, requirement. The. Final rule provides for an exception, to the HP, subsidy repayment requirement. For, households, were the amount of HP sub C subject, to repayment is, $2,500. Or less if. The pro rata subsidy, amount is, $2,500. Or less calculation. Of net proceeds as, described, on slide 18 steps. 2 through 5 is unnecessary, this. Should reduce the administrative burden on the Home Loan Banks and members associated, with recovering, HP subsidies a. $2,500. Threshold will also minimize any, HP sub series payments by the household this. Furthers, the underlying policy, of the HP, that, the purpose of the HP, subsidy, is to enable low or moderate, income households, to enjoy the benefits of a home ownership which, includes depreciation. In the value of their homes. As. Previously. Stated. As. Previously. Stated the, final rule retains, the exception, to. The HP, subsidy repayment requirement. At the HP's does the unit is going through a low or, moderate. From household in contrast. To the current regulation. The, final rule provides four methods. Evaluating. The subsequent, purchasers income, in the, absence, of actual documentation, in such. Cases a home loan bank will determine the subsequent, purchasers income, using, one or more proxies, that are reliable, indicators, of the subsequent, purchasers, income, which, may be selected by a bank upon publication, of guidance by. FHFA, on proxies, this. Requirement, will become effective upon issuance, of the guidance by the agency, a few. Notes for our use of proxies. FHFA. Intends, to develop, an affordability, price index for use as a proxy for subsequent, purchaser, income the. Affordability, price index, which, will be posted on the agency's, website will. Is the house price that is affordable to. Households, at 80 percent of area median income by, geography. Music. / also uses. A home loan bank nor. Its member is required to request or obtain the subsequent, purchasers, income, but must evaluate any, income documentation, is made available. And. Now, I provide, a brief overview of remedy, of remedial actions, for HP, project non-compliance. Consistent. With a proposed rule the. Final rule addresses remedial. Actions, for HTTP, project non-compliance. The. Final rule revises and streamlines, the current language to provide greater clarity on, the, scope of the section and the responsibilities. Of the parties. Excuses. The. Final rule establishes, a sequence of remedial, steps for. A Federal Home Loan Bank to follow before, recovering HP, subsea, in cases, of project not compliant and codifies. Practices, subhan, loan banks generally follow now. The. Final rule requires a project sponsor, to first make a reasonable effort to cure project, my compliance in a, reasonable, time period, requiring. At the bank the term secured non-compliance, before modification, helps ensure that, sponsors, fulfill commitments, in their, approved, HP, applications. And do, not over promise the creation, or its of units or unachievable, income. Targeting, in their applications. If. The project non-compliance, cannot be cured within a reasonable time period, the. Home loan bank may approve a project modification. Request that meets the needs the final rules modification. Requirements. If. The non-compliance, cannot be eliminated through adhere, or a project modification. A home, loan bank must first demand repayment, of the full amount or the HD subsidies, not used in compliance with the commitment, of the HP application. Or HP, regulation. This. Ensures that the home loan bank attempts, to recover all the subsidies worked for considering, settlements. If. The demand for attainment, of the full amount of subsidy do is unsuccessful then. The bank is required. To make reasonable efforts, to collect the subsidy from the project sponsor, or on this.

May Include settlement, for less than a full amount of HP subsidy, dues when. Determining whether to settle the, home loan banks are required to consider the facts and circumstances of, the non-compliance. This. Includes a degree of culpability of non-compliant, parties with also the financial capacity, of the project sponsor owner, asset. Securing, HP, subsidy and other, assets of the project sponsor or honor it, is. Very important, to remember that settlement, is the last, resort. In a series of steps that a home loan bank initiates, to remedy project, non-compliance. As the. Goal of the HP, is to ensure the creation, and retention of affordable, housing and now. I'll, turn the presentation back, to Erik our to discuss governance, provisions, in the final rule. Thank. You Tiffany, the. Final, rule retains, the current, Authority for, Federal Home Loan Bank, boards, of directors to delegate, their statutory, responsibility. To, meet quarterly, with their affordable, housing, advisory, councils, to, a board committee this. Is a change from the proposed rule which. Would have prohibited this. Kind of delegation. The. Final rule prohibits, Federal Home Loan Bank, boards from delegating, strategic, decisions. To award committee this. Includes the responsibility. To improve general, fund, targeted. Fund and homeownership. Set-aside. Program, policies, as well. As the AHP implementation. Plan and the, targeted, community, lending friend. And. Finally. A note, about, reorganization. Of the regulation, as you. Read the final rule you will notice that it generally adopts, the reorganization. Of the current regulation, as it was proposed. FHFA. Expects, that, the reorganization, will, make it easier, for the Federal Home Loan Banks, and AHP. Stakeholders. To read and understand. The final rule to group similar subjects, together under, new subpart, headings and now. I'll turn the presentation back. Over to Ted Wardell to wrap up the webinar. Exact. So. Close wrap-up I did want to say a few words about the. Effective, date of the final rule and the compliance dates first. The. Rule is effective, 30 days after publication in the Federal Register which, works, out to December, 28, 2018. But. That doesn't mean a home loan banks will have to implement the rule by that date, we're. Using the term compliance, date to describe the implementation. Dates for the final rule. Aluminum. Banks will have to implement all parts of the rule by January, 1st 2021. However. There are exceptions, first, as Tiffany. Said the compliance, date for, all owner-occupied. Retention, agreement provisions, is earlier that's, January, 1st. 2020. The. Final rule also allows the Home Loan Banks to elect to implement, any provision. Of the rule early, before. The rule in compliance states for example a bank might choose thirdly. Implementation. For, targeted funds or for monitoring. Banks. Attunes to implement a specific provision before. The related compliance, date must also adopt. All other changes, related, to that specific provision and. Lastly. At the homeland bank does. Not elect to implement, a new provision in the final rule early before the compliance date it, must comply with the current regulatory provision, until. The related complying, state. All. Right a few words about next steps on. Our side. First, as we talked about FHFA. Plans to issue, monitoring. Guidance naming, the four federal government programs, eligible. For reduced initial, and long-term monitoring, we. Also plan to issue. Guidance using. Properties determined, subsequent, purchase or income in connection. With owner-occupied. Retention, agreements. Another. Step will be clarifying, the Lea for subsidy, determination. And finally. F SFA anticipates. Future, rulemaking, on sponsored provided permanent financing revolving.

Loan Funds and loan pools. Alright. With. That we do have time, to. Answer any questions. Are. There any questions. Bruce you would you mind your reminding, our attendees. How they can submit a question. Absolutely. Daniel ladies. And gentlemen please go ahead and submit your questions, in the chat panel. Located. In the bottom right-hand side of the screen and please, send, your questions to all panelists. Which you can select from. The sketch to drop-down. Menu. Thank. You all, all everyone is thinking, about their questions we didn't have one question submitted, in advance so. I'll read that one first. Maybe Federal Home Loan Banks, eliminate, retention, agreements, for owner-occupied. Rehabilitation. Project, prior. To implementing the full requirements, of 12, CFR, 1291. 15. This. Is prompted, by the following, requirement. That a bank that chooses to comply with a specific provision, before, the applicable, compliance, date must, also comply, with all other provisions related. To that specific, provision. It's. Unsure, in its entirety is related, to the elimination of retention agreements. For owner-occupied. Rehabilitation. Projects, which, is implicit in the exclusion of such projects from the list. Okay. This. Is Marcia Berenguer and I'm going to attempt to answer that question, so. Yes. A bank. An adopt. The, provisions, of federal home loan they can adopt the provisions, for. Owner-occupied. Retention, agreements, before, the, compliance, date of January, 1st, 2020. Absolutely. Does bad it, does, not have to adopt all the provisions in the. Section. Of the regulation, that was mentioned section, 1291. Point 15, instead. It has to adopt the provisions, related, to owner-occupied, retention, agreements, that are in. 1291. Point 15 as well as any other provisions. Related. To owner-occupied, retention, agreements, that are found elsewhere in. The. Regulation, I. Hope. I hope that helped. Okay. Great we. Do have another question. Is. This the, same as a proposed. Rule for the Federal Home Loan Bank, housing, role. So. Great. Question important. Question no, it is not the same so I will just. The. Affordable housing program as many. Of you know is, a is, a, program, under which the Federal Home Loan Banks put aside 10% the, previous, year's.

Net Earnings to run. A competitive program, and non-competitive, set-aside, program, for, affordable, rental and homeownership. The. Agency. Has. A proposed, rule out about. Federal Home Loan Bank affordable, housing goals. Which. Have to do with loan. Purchases, that the banks make under there am a program. That. Is also posted on our website, we. Would love to, have, as many comments. As. Possible. On that the comment. Period closes on January the 30th. And. I encourage, people to look it over and let us know many cops. Said. So. Our next question is a, two-part, question. Related. To the, termination, of retention mechanism. Language. Was specifically, added by F HS, s HS a that a retention mechanism terminates. Upon a, deed, in lieu of foreclosure for. Owner-occupied. Projects. I did, not we do not add that for rental project. But. A Federal Home Loan Bank run afoul if they allowed that for rental project in second. Part remedial. Actions for project, non-compliance. Hundreds. Go its state this, section, does not apply to individual. A HP, assisted, households or. To the sale of refinancing. By such households, of their homes does. That mean that if there was an owner occupied general project that. Is for purchase or rehabilitation. Of individual, homes does, the sponsor not, have to follow the prescribed, steps in order to set forth the regulation. To remediated, such non-compliance. And. That. Was a mouthful, so, I will take the second, question first given. The nature. And, nuanced nature of the question we're going to take that one offline or work with our legal counsel, on getting an appropriate response back, to. Submitter. Of the question because we want to make sure we understand, the, question in its entirety, so. Okay. And then, the first question was regarding the termination, of the retention mechanism so. Making. Sure we're reading the questions is to make sure integral.

Yeah. This is Sharon like the. First, question about the termination, of retention grievance, that something we'll take a look at we. Need to get a digital, information, before. Answering that question on, the, second, one regarding, projects. If. You're talking about a project, and, clearly the remedial, steps would apply. So. That that. Those. Sections definitely, in the regulation applied. Okay. Just. To reiterate we do have another question about. Getting. A copy of the slides we will be posting, the webinar. Recording. As well as a full transcript, and the slides on our website. In the coming weeks the. Next, question is do. You anticipate, revisions. To the DRM, reporting, requirements, for a HP, as a result of the new rule and if, elvenmoor horse provisions, be published. This. Is Daniel sadly yes the answer is yes we do anticipate revisions. To the DRM reporting, requirements, I, don't, have a date, for you now we'll, get, back to you enough. Okay. We'll give it another minute in case anyone else's typing, other questions. Okay, looks, like we do have another question, it's. Adopting. The new rule, regarding. Retention. Agreements, for a homeowner. Rehabilitation. Programs, doesn't. Apply to homeowner, projects, that are already in retention from previous, years there's. A 2500, de minimis, provision. Apply as well. So. The answer to that question, is yes so quite. So for. Projects, that are strong, projects that, are currently under. Attention, agreement under the current regulation, on the, de minimis provision. Res applies to those. Projects, upon the effective, date of the original. Z um. Spiral. And. The Vegas adoption, of using, other thanks adoption of the final about, provision so that provision is thank you for correcting me I appreciate it. Okay. So. The final rule applies to all, AHP, projects. Or only projects, that are awarded HP. Awards moving forward. This. Is Marcia, Berger, that's. Um a simple, question, and a great question but, one with a complicated, answer, so. I, think, we're, going to have to say now back to ten in. General, and because, it, depends, on the specific provisions. Thanksgiving. Another minute for questions to come in. Okay. Looks. Like we have one on lytec, for life tech project, the, revised regulation. Indicates, no backup, documents, are required at, initial, monitoring, if a, Federal Home Loan Bank, still required, to determine. At, initial, monitoring, a hv subsidy, used for eligible purposes. Household. Income and rents comply with application, commitments. Actual. Cost for reasonable. Retention. Requirements. And services, and activities. Committed. In the application, were provided, if, it's still required, to determine how, what a federal home loan bank uses, without the backup documents. This. Is Marcia, the vacuum, it documents, that works backup. Documentation. Our. Backup. Income. And rent. Requirement. Documentation. So. For. Instance for income documentation, that would be w-2. Forms, or tax returns, of, other times for, the rent. Documentation. We would still require a, rent, roll but, the. Things. Are not required, to review, leaflets. For instances, so a lot of the requirements mentioned, in that question, actually, don't have to do with household income and rent. Eligibility. And the banks will still be, required to determine. An. Initial, monitoring, that those. Requirements. Are complied with I.

Hope. That's helped. Just, waiting to see if there's any more questions I think we might have time. Okay. I'm, sorry for the delay if. Owner-occupied. Rehab. Projects, have no retention, agreement is, recapture. Of the subsidy, ever required. The. Answer to that is no, nice. Simple, answer. Okay. I think we might have time for one. More question. If. It's just income, and rents, do, we have, to have third-party verification. Of, homeless. And special, needs. I'm. Not sure exactly, what, that. Question is. Referring. To third-party, verification. Of, what, but the project, would have and, maybe this is what, the question is getting at. When. You. When. The bank still be required to verify that the, project. Is serving, the. Special needs population. That. It committed to in the application. And that the. Answer to that would be yes. Just. To clarify that for lytec, primary, yes for, monitoring, project projects that, is correct. Okay. I. Think they're out of time for questions, and, Ted. You know give, it the recap of Hamelin. Her time I do yep, so. Thanks. Again everyone for joining, the, webinar today. The. Contact. Information for, everyone who has, presented today as well as Sharon. Like and Adam kucik from our general, counsel's office is listed on 527. That. Brings. Us is, in case you have additional questions, so. It brings us to the end of the, webinar today but we absolutely, look forward hearing hearing. From you going, forward. Thank. You so much. Thank. You for joining the conference today god. Has now concluded and, you a disconnected.

2018-12-22 11:42

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