Federal Home Loan Banks' Affordable Housing Program Webinar

Federal Home Loan Banks' Affordable Housing Program Webinar

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Ladies, and gentlemen welcome, and thank you for joining today's web conference, Federal. Housing Finance, agencies. Federal. Home Loan Bank, affordable. Housing program, proposed. Rule, please. Note that all participants will. Be muted for the duration of, this event you. Are welcome to submit written questions during, the presentation, to. Submit a question please use the chat panel on the, right hand side of your screen and please choose all, panelists. From the send to drop-down, menu, if. You have any techniques if you require any technical assistance please, send a note to the event producer, I would. Now like to formally begin today's conference and it reduce Cynthia, Adcock director, of communications, the, deity's go ahead. Good. Afternoon everyone and welcome i'm, cynthia, Adcock, director, of communications. Here at FHFA. And we're so glad you could join us today for this webinar on. The proposed rule that would amend the Federal Home Loan Banks, affordable, housing program regulation, the. Proposed, rule was published in the Federal Register on, March 14th it, has a 60-day, comment period so. That will end on May 14th we. Will explain a little bit later in the webinar exactly. How to comment, on the rule joining. Me today our presenters, from our office of Housing and Community investment. We, have another today head war tell, Marcy. At barrier Garrick. Powered, and six anymore, for. The next hour they, will provide an overview of proposed, amendments, and will, answer questions. Once. The webinar has concluded, we, will make a recording, available on. Our website. FHFA. Dub-dub, now. I'm going to turn things over to Ted, to. Begin our presentation. All. Right thank Cynthia. Cynthia. Mentioned our, presentation, today is going to start with a brief. Overview of the HP, then. We'll list the specific, objectives, of the rule and then, describe the proposed, changes themselves. Including. Assessment. Of the bank district, housing needs program. Design the new outcome based approach for project, selection. Changes. To the homeownership set-aside. Monitoring. Requirements and remediation. Of AHP non-compliance. So. Slide 3 is such a brief overview of the HP. Congress. Created. The program in 1989. As part of the financial institutions, reform recovery and, Enforcement Act, or pyria and program. Started funding affordable housing projects, in 1990. The. Law requires each Home Loan Bank allocate, 10% of its prior year's net income to fund at the HP for, purchase, construction. Or rehabilitation of. Affordable, housing the. Law also establishes. A number, of other. Requirements. For. Rental housing a minimum of 20% of, the units in a project must. Be reserved for households, after below 50%. Of, their, area median income, homeowners. Of humans must serve units at their below 80 percent of area median income. The. Statute, also establishes. Several priorities for the banks to meet in awarding. Their AHP funds. Purchase. Or rehabilitation, of housing owned by the US government, purchase. For realization of, housing sponsored. By any nonprofit organization. Any, state or political subdivision of. Any, state, and. Persons. I'm sorry to disturb you over there up but. We need to see the slides moving please right. Now we're at the cover slide yes. Reciate. Appears we're having technical difficulty. Here so can, you switch the control of the slices, been absolutely, I can move the slides for you please let me know which side I should be on, going. In. Your slide or, three here on slide for. My. For how do these just say next slide whenever, you want me to move the slides for you thank you. So. Can, we go back to three or I'll just I can just read I, can just read proved planned promotion. Okay. Great. Thanks. So. Just to finish the. Point in addition Allah requires FHFA, to issue regulations that, enema minimum. Specify. The activities, that are eligible to receive a refund. Specify. Priorities, for use of the HP funds and coordinating. HP activities, with. Other program, activities, other. Federal, program activities, to, the maximum, extent possible. The. Law also requires each bank to establish, an affordable housing Advisory Council of, members, drawn from community, and nonprofit, organizations, involved. In low or moderate income housing within. Its districts. So. Moving to slide four. So. Many of you on the phone know the process of developing, the proposals, we're talking about today is underway for quite some time and, FHFA.

Has Greatly benefited, from, the input we've received from the Home, Loan Banks themselves, as, well as the HP stakeholders. Including, the bank's advisory, councils whose. Members include nonprofits. For-profits, developers. And local, government officials other. Nonprofit, organizations, bank. System members, and HP subsidy, resistance recipients, themselves. Based. On that input as, well as their own analysis, the agency set the following objectives for. The proposed rule first, to. Expand the bank's ability to tailor their HP to. Meet the specific affordable. Housing needs in their districts. Second. Is also to explain click expand, flexibility. And the, effectiveness, of the homeownership set-aside, program, third. To, streamline, rent and income, monitoring. Requirements and the, fourth objective is, to clarify the responsibilities. Potential, liabilities, the. Banks bank members, and project. Sponsors, or, owners, in the event of HP, non-compliance. Now. Let. Me turn it over to Tiffany just, going to describe the proposed requirement, to assess district, housing needs thanks. Kay. Wi-Fi. Describe, the agency's proposal, on the assessment, of district, housing, needs the. Proposal, will require that each state Undertaker. Access to identify, specific, affordable. Housing priorities, in his district, the. Bank was instant priority, for an allocate, H key funds to its. General plan and any homeownership, set-aside. Program, and targeted. Funds established by, the bank. The. Bank currently must adopt or update, then post on their website, annually. Targeted. Community, lending plans, addressing. Targeted, economic, development, needs in their districts. The. Proposed rule would expand the requirements, for these plans to. Specifically, include analysis, of affordable, housing needs in a bank's district and identified. From among those needs specific. Housing needs to be addressed through the bank's HT supported. By empirical data, in order to justify, selection. By the bank a specific. Housing needs priority, for its general fund the. General fund will be similar, to the bank's current competitive, application, program, so with some differences that we will discuss shortly and. Establishments. Private bank of any targeted, funds and homeowners, should set aside programs, in its discretion. Each. Bank will be required to publish its targeted, community lending plans at least six months in advance of, the plan use for. Any targeted plan established, by the bank the, bank would be authorized, implement, it defines. After, twelve months had elapsed to, the publication, of its plan in the. Base HP, implementation. Plans which, are published annually, the banks have specified, the, funding allocations. For the bank's general fund and any, bank targeted funds and homeownership, set-aside, programs, as, well as the scoring framework, for, the bank's general fund and bangs, targeted, homes and now, I will, turn it over to Eric to discuss proposed, provisions, on program. Design. Okay. Thank, You Tiffany I'm. Now on slide six and I'm. Going to discuss the overall proposal. For, program. Design under the AHP, Epic's, if they propose a number, of regulatory amendments. To enhance the, Home Loan Banks, ability, to design their program in order. To address specific. Affordable.

Housing, Needs within, the districts the. Banks would have greater flexibility. To allocate. And award, their annual. Total. AHP, funds while. At the same time preserving. Certain, beneficial. Features of, the current program for. Example each. Bank would be required, to allocate. A minimum. Of 50% of, its total, annual. HP, funding, allocation. To. Its competitive. General, fund, this. Would ensure that the majority of AHP, funds continue. To be allocated. Competitively. Through, a program that's, open to all applicants. Each, bank, would also be authorized, to establish, a targeted. Funder, funds and this, would be at the bank's discretion. Targeted. Funds are a new category, of, competitive. Funds a bank. Could allocate up to forty percent of, its total annual. AHP, funding, allocation. To, a maximum. Of three targeted, funds, the. Establishment. Of the targeted, funds would, be subject, to certain phase, and requirements. And the. Use of targeted funds, would enable the banks to further target, housing, needs then, their districts, that are challenging. To reach using. The existing. Competitive. Scoring, framework, the. Proposal. Would also increase, the, annual amount the banks could allocate to their homeownership. Set-aside. Programs, from. The current, 35, percent, to, 40 percent while. Retaining the current. Alternative. Funding, limit of 4.5. Million dollars, this. Would enable the banks to further tailor, their homeownership, set-aside. Programs, to. Address homeownership. Means, in their districts, and. Finally. About. The proposal, the proposed rule would continue. To require that. The banks allocate, the majority. Of their total annual. AHP, funds to. Competitive. Programs, through. The general fund and, any. Optional. Targeted, fund or funds. So. Now on slide seven and we're. Going to discuss the proposal, for the general fund as I. Mentioned previously the. Proposed, rule would require that each Home Loan Bank allocate. At least, fifty, percent of its total annual. AHB, funding, to. Its general fund, the. General fund would operate, in a manner similar. To the current competitive. Application. Program, the. Proposal, would require the. Banks to continue, administering. Competitive. Application. Programs, that attract, numerous. Applications, that. Address a broad, array of affordable. Housing needs, however. As will. Be discussed. Shortly each. Bank would design its own scoring. Framework, for. Its general, fund based. On specific, affordable. Housing needs identified. In its district, and, subject. To meeting certain outcome. Based requirements. Prescribed, by FHFA. In the proposed rule. I'm. Now. On slide eight to, discuss the proposal. Authorizing. The Home Loan Banks, to establish, targeted. Funds in, their. Discretion as. I. Stated earlier the. Purpose of a targeted, fund is to enable a bank to, target, a specific affordable. Housing, need or, needs within. Its district, that, are either unmet, has, proven difficult to, address through, the existing, competitive. Application, program, or. Aligned, with objectives, identified, in, the Bank strategic, plan a. Targeted. Fund would serve as a tailored, competition. To, address district, needs that, are difficult to need through the general fund the. Use of targeted funds would help banks address challenges. They, experienced when trying to target multiple. Affordable. Housing needs within their districts, especially. During a single, AHP, application. Funding period. For. Example, banks. Use, of targeted, funds could, improve. Its ability to talk, the affordable, housing needs of specific. Geographic. Areas, or populations. Or. To act into or speak, or to act in response to a disaster that, occurs within its district. The. Bank would be required, to administer each, target. Upon using an objective and transparent. Competitive. Application, scoring, process, developed. By the bank and. Comprising. Scoring. Criteria, applicable. To, the targeted, affordable, housing need, the. Bank would be required to adopt and implement, controls. To. Ensure that each targeted, fund is designed to, receive, sufficient. Numbers, of applicants. For. The amount of AHP, funds. Allocated. To, the targeted, fund to. Facilitate, a competitive. Application.

Process. The. Controls, would also include, a phase-in. Period for. Establishing, and allocating. AHP funds to, targeted, funds and the. Banks would be required, to announce any targeted, funds, in their targeted, community. Lending plan planned, one. Year before. Their. Implementation. Of. A, targeted fund. FHI. Peg would review the targeted, community lending plans before they're released to the public. I'm. Now on slide 9. I'm. Going. To discuss the, proposed amendments, to the HD, homeownership. Set-aside. Program. Into. Authorizing, the banks to increase the allocation. Of total, annual, AHP funds to the homeownership, set-aside, program, from, 35, to 40 percent the. Proposed, changes, would, include, increasing. The maximum set-aside. Subsidy, amount per, household, from, the current. $15,000. Which, was set in 2002. To. $22,000. This. Would bring the subsidy, limits in line with changes, in FHFA. S house, price, index. The. Subsidy, limit would, then be adjusted annually. For. Increases. In, FHFA. House price index. The. Proposed increase, in the subsidy, limit takes into account increases. In current, housing construction. And rehabilitation, costs. The. Proposed increase. With also, address homeownership. Needs, in high-cost. Areas. The. Proposal, would require the banks to meet the statutory priority. To, support home purchases. By families, at 80, percent of, area, median, income, or below. Specifically. The. Proposal, would require that, each Bank demonstrate. That. A minimum of 10% of, its total, annual, AHP, funds support. Home purchases. By such families, the. Banks could demonstrate satisfaction. Of this requirement, through, their homeownership, set-aside, programs. General. Fund and were. There. Targeted, funds, the. Proposal, would revise the, current one-third, satisfied. Funding, allocation, requirement, to, include not. Only first-time. Homebuyers, but. Also. Owner-occupied. Rehabilitation. This. Proposal, would, serve to encourage, more. AHP subsidy, use for. Owner-occupied. Rehabilitation. The. Proposal, would, also remove, the current requirement. For, a five-year retention, period, agreement, and the, related AHP. Subsidy. Repayment, requirements. The. Purpose, of the current retention, agreement, requirement, is to, discourage, potential. Lipping. Of homes purchased. With, AHP brands, however. FHFA. Has found little evidence of, flipping. Of in. Properties, with, AHP, subsidies. Given. This lack of evidence and, the administrative. Costs, that the retention agreements. And repayment. Requirements. Place on banks, and member, institutions. FHFA. Has proposed, eliminating. This requirement, if. Chippie is requesting, comments, on the advantages, and disadvantages of. The retention agreement, requirements. Including. Any, impact. Its elimination. Would have on FHFA, the ability, to ensure that AHP, funds, are being used for statutorily. Intended. Purposes. HOV, FHFA. Is also, requesting, comments, on the ways to. Deter flipping, other than through retention. Agreements. And. Now on slide 10 and. Now. This is an example of. How a bank might, choose, to, allocate, its total, annual. AHP. Funds under, the proposed, funding, allocation. Authorities, so. Let's. Begin by assuming that a bank has thirty million dollars, in total annual. AHP, funds which. Is ten percent of, the bank's prior year's net, income, the. Bank would analyze, the district's, affordable, housing needs in conjunction, with, the development of its targeted, community, lending plan the. Bank's board of directors would then approve the design of, the program and the allocation, of AHP funds and this.

Could Result in, for, example the. Bank allocating. 50%. Of the total annual, AHP, funds to. The bank's general fund this. Is the regulatory, minimum. So. The bank would be required, to allocate, to the general funds and this, equates to, 15. Million dollars for this bank the. Bank could allocate. 40%. Of the total, annual, AHP, funds to, the bank's home ownership set-aside. Program, which. Is and, 40. Percent is the regulatory maximum. That a bank would be authorized, to allocate, to its homeownership set-aside, program, and this, equates, to twelve, million dollars for this bank, the. Bank could, allocate, 10, percent, of the total annual. HP. Funds to a targeted, fund, the. 10 percent is, well, below the regulatory max. 40%. Of, total annual, AHP, funds that, a bank would be authorized. To allocate, to targeted, funds and in, this example this. Would equate to three million dollars for this Bank, so. Now I'm going to turn the presentation over, to Marcia, who. Will discuss the proposed rules project. Selection, changes. Thank. You Eric I'm now, on slide 11. Eric. Described a number of the ways we believe the banks, could address their districts specific. Affordable, housing needs. FHFA. Is proposing, a different framework, for the banks select. Projects, to receive age P Awards which, is an outcome, based approach, as, many. Of you know the. Current regulation, mandates, a scoring framework, of seven mandatory, scoring, categories and, to. Bank District, priority, categories. Under. The proposed rule each. Bank would establish its own scoring, framework, for, its general funds and could. Establish a, separate, scoring framework, for, each targeted. Fund. However. As we. Touched on in the overview the. Statute, does include, certain priorities. For, the awarding of HP, funds and, requires. FHFA. To, establish, additional priorities. Through, regulation. The. Proposed, rule would include, those statutory priorities. And proposes. Several, right regulatory. Priorities. And, under. The outcome based approach. FHFA. Expects. A specific. Amount of each banks HP, awards to, meet those. Statutory and, regulatory priorities. We. Will discuss those FHFA. Prescribed, outcome, requirements, on the next few slides. The. Proposed ship-to, measuring outcomes is. Intended, to create more flexibility. For the banks to effectively, target specific. Housing needs in their districts, at, the. Same time it would. Assure that the, AHP is meeting both the statutory and. FA. If a regulatory. Priorities. The. Proposal, would also increase, flexibility. In the general fund scoring, framework, by, changing, the current regulatory priorities. The. Proposed regulatory, priorities. Would. Continue, to address important. Housing, needs at the. Same time they, would provide additional, flexibility. To the banks. Some. Of the proposed regulatory, priorities. Are also aligned with FHFA. Priorities. And other programs, most. Notably the. Dirty duty, to serve programs. I'm. Now on slide 12. This. Slide describes the, statutory, priorities, that, the Home Loan Banks, HP, awards must, meet under the proposal, as we. Noted earlier the Federal, Home Loan Bank, Act includes.

Three Specific priorities. The. First priority, as implemented. In the current regulation, is for. Land or units, donated. Or conveyed, by, the federal, government, or by other parties, the. Second, priority is, for projects, sponsored by. Nonprofit, organizations. Or by government, entities, under. The proposed rule each. Bank would be required to award, a certain percentage, of AHP fund to, project meeting at, least one of these two statutory priorities. The. Third statutory, priority, is for homes purchased, by households, with incomes that 80% of, area, median income or below our. Proposals. Would separate, the third statutory. Priority, from the other two, we'll. Be describing, the details a little further on on slide 15. Moving. On to slide 13. The. Rule also proposes. For regulatory. Priorities. The. First regulatory, priority, is for income targeting, of rental units to very low income households. The. Proposal, would require each, bank to ensure that at least, 55%. Of the total rental, unit. Rental projects, receiving, HP, Awards are reserved. For households. At 50%, area, median, income or below. And. Now turning to slide 14. Which. Describes, the other three, regulatory, priorities. That FHFA. Would establish under the proposed rule, the. First regulatory. Priority, is for underserved, communities, and populations. This. Priority, would include housing. For homeless populations. Special. Needs populations. Other. Targeted, populations. Such as military, veterans, or Native. Americans. Housing. In rural areas, and housing. For households, with incomes, at 30% of area median income or below. Some. Of these housing, needs are retained from the current regulation. The. Definition, of rural areas would be consistent, with the definition of rural and FHFA. A duty. To serve regulation. The. Second regulatory, priority, is creating, economic opportunity, in conjunction with providing, housing this. Priority, would include housing, connected, to promotion of empowerment services, such. As childcare or health, care services, and. Residential. Economic, diversity, as defined. In SH FAS duty, to serve regulation. Elements. Of both of these housing, needs are retained from the current regulation. The. Third regulatory. Priority, is for housing preservation. Including. Rental, housing preservation and, homeownership. Preservation. These. Housing needs would be consistent with those in the duty to serve program and, include.

Housing, With energy, efficiency, measures and shared. Equity, programs, as. Opposed. To mandating. That all of the banks allocate. A minimum, number of points to the same priorities. Regardless. Of district need our. Proposal. Would require each bank to meet a minimum of two, of these three regulatory, priorities. For. Each regulatory. Priority, that a bank chooses, to include in its scoring framework, it. Would be required to select, at least one, healthy, need under. That regulatory priority. For. Instance, at the bank chooses, to meet the underserved, populations. And communities priority. It, could do so by selecting and, awarding, age P funds to, projects, located in rural areas, and. Now. We're going to slide 15. Y. 15, illustrates, the specific, outcomes, that each Bank would be required to meet under, the proposal, as. I. Just described, the, proposal, calls for the banks awards to address both statutory and, regulatory priorities. We. Have proposed, the following four specific, measures, first. Each, bank would be required, to satisfy one, of the first two statutory priorities. To. Do that at least, 55, percent. Of a bank's annual competitive. Award that's. The general fund and any targeted, funds but. Has to meet either the federal government, and donated, or conveyed properties, priority, for. The. Nonprofit. And government sponsored. Priority. Second. Each. Bank would be required to separately, meet the third statutory. Priority, to. Do that at least, 10% of a bank's total annual, age P Awards that's, the general fund any. Targeted, funds and. Any. Homeownership, set-aside, programs, combined, and. Would. Have to assist. In home. Purchase, for households, with income at, or below eighty percent, of area median income. Turning. To the regulatory priorities. Each. Bank would have to meet the income targeting. Priority, by, awarding, HP, funds annually, to rental projects, so, that at least 55%, of. Rental. Units would. Be reserved, for households. At or, below 50% of, area, median income. We. Would measure this outcome, in units, as opposed to dollars, and. Lastly. In terms of meeting the other three regulatory, priorities. Each. Bank would be required, to, at least 55, percent, of its total annual, HP. Funds, projects. That in the aggregate we, at least two of the three regulatory. Priorities. Each. Bank would be required to choose a minimum of two, of the three regulatory. Priorities. In its scoring framework, with, which to, meet those outcomes based. On its own district, housing needs in, order. For the bank to receive credit, towards. Meeting this outcome requirement, each, individual. Project, would, only have to meet one of the regulatory priorities. That, the bank specified. And. Now I'll turn, it over to Tiffany to discuss an example thanks. Marcia the. Next five slides illustrate how, a banks, could design shd for, a given application funding. Cycle under the supposed rule. By. 16-piece. Thank. You, let's. Use the HP allocation, example, from 510, that Eric described previously, this. Bait has 30 million dollars for annual HP, funding, allocation, as I. Described, on slide 5 the bank was submitted targeted, community, lending plans, to FHFA, prior, to an application, cycle the. Plane would identify significant. Housing, needs in the bank's districts supported, by empirical data, in this. Example the, bank has identified, the volume of significant, housing needs recovery. From Hurricane Maria. Housing. For the homeless and, rural communities. Rental. Housing preservation in, rural communities for very low income households, and first-time. Home ownership the. Plan will be approved by the bank's board of directors, and published on the bank's website I'm.

Not, Moving to slide 17. -. Thanks H the implementation. Plan will, specify how, the bank will allocate the 30 million dollars based, upon the identified, needs and its targeted community, lending place here. The tanks funding allocations, are as follows, 15. Million to the one for, rental. Housing preservation for. Very low income households. Three. Million to a targeted fund for, rural housing, for homeless households and, twelve. Million to, to homeownership. Studies, by programs, once. With this health of recovering, from Hurricane Maria, and the, other to assist first-time, homebuyers. The. Banks HD, implementation. Plan would, include the specific scoring, criteria but. A general fund and the target of funds and, what addresses the, requirements. For the homeownership specified programs including. The bank application, and subsidies. It's personal requirements and the, maximum 7 size amount, per, household. Looking. To slide 18. And. I. Think we use previously, discussed, this. Bank has decided to target its general, fund for, rental housing preservation and. Rural, communities for, very low income households. These. Are individuals, with incomes at 4 below 50% of, area median income. These. Housing, needs are reflected, in the scoring criteria included. In the banks HD, implementation. Plan as indicated. On this slide, this. Includes two of the three proposed, regulatory, priorities. Underserved. Communities, and populations, and, housing. Preservation as. Shown. This. Bank has also opted to include, scoring criterias, and its, general fund based, upon the statutory priorities. For federal government donated. Or conveyed properties, and nonprofits. Government sponsors. Moving. To slide 19. 519. Shows the banks scoring criteria for, its targeted, fun this. Includes housing for homeless households and rural, housing, under the repertory priority, for underserved, communities, and populations as. Shown. The, Bank scoring criteria for. Its targeted, funds also, emphasizes. The statutory priorities. For federal government, donated. Or conveyed properties, and nonprofit. Government, sponsors. I'm. Now. Moving to slide 20. Why, 20, shows the banks to home, ownership set-aside. Programs, one. Focus, on assisting first-time, homebuyers, and the, other targeting, homeowners. In need of housing assistance due. To Hurricane Maria. The. Bank HC, outcomes, will, be assessed in accordance, with the outcome requirements, described. By our SEO on slide 15. I'm. Now. Moving to slide 21. FHFA. Is proposing, to reduce redundant. Monitoring, requirements with, other government, housing programs, which, would be consistent with the state acts requirements. That FHFA. Coordinates, HD. Activities, with other federally, subsidized, affordable, housing activities, to, the maximum, extent possible. For. Initial monitoring, of HT projects, that received low-income. Housing, tax credits, the, proposed rule would provide that the banks reduce certification, in rent, rules from tax credit project sponsors, to, determine, that the residence income, and rents.

Comply With, income, targeting, and rent commitments, in the approve HT, application. But, no other that stack of documentation, will be required. The. Things would be required to include in their HT monitoring, agreement with. Members and/or. Private sponsors, that, the project sponsors provide written notice to the bank if the text credit, project fails to comply with. Tax credit income targeting, and rent, requirements, during the HC, 15, year retention, period. For. HP, projects, funded by other government, programs, which, would be specified, and separates, FHFA. Guidance the, banks would only be required to review the bank excuses, their project sponsored certification. And rent. Role at initial. Monitoring, and no, other type of documentation. Each. Year during, the NHD, 15 year retention period the. Basis only be required to review the project sponsors certification. And would, not be required to review, the rent rolls or other backup documentation, for, income areas. FHFA. Would include in, the guide in the guidance only government, programs that have, the same or substantially, equipment. Rent income, and, retention, period requirements, as the, HP. FHFA. Has determined, that there is a very lower time not, complying with these, requirements and that the monitoring, and ski has demonstrated and, continues, to demonstrate its. Ability to monitor the project, the. FHFA, guidance, will specifically. Identify. The following, programs, HUD. Section, 202, program. For the elderly, plus. Section 811 program for, the disabled. USDA. Is section 514. Farm. Worker multifamily, programs and section. 515. World, multifamily, programs, the. Agency, may add federal housing programs, as appropriate. Through the guidance. I'm. Not moving to slide 22, for, the steps hc' non-compliance. Remediation. The. Proposed, rule will be organized, and streamlined the non-compliance, remedies section of the, current regulation, by, including each type of non-compliance. Project. Sponsor owner bank. Or bank, members in a separate regulatory section. So, that the responsibilities, and potential, liabilities, of each party is clear in this theme the. Proposed rule would also make specific changes, by. Establishing, an order of remedial, steps that, if they would be required to follow the before, recovering HT, subsidy, in the event of HP, not compliance. Since. The objective of the HP, is survived affordable, housing to eligible, households, for, the duration of the HD, 15, year retention period, recoveries, HT, subsidy, should be the last resort.

Therefore. The, project sponsor, would be first required to cure the project not compliance, within, a reasonable, period of time, if. The non-compliance, cannot be cured then, the bank would be required, to determine whether the non-compliance. Could, be eliminated, through her private life occasions, under the proposed rules, specific. Modifications. Seizures, if. A traffic modification. Cannot be achieved in. The bank obey the number of delegated, dis responsibilities. Would, be required to exercise reasonable, collection. Efforts to, recover HP subsidy. Do this. May include gentlemen select an age students. And less than the full amount or, subsidy, to where, appropriate the. Proposed, rule would clarify the factors, the banks and members should take into consideration. In determining, whether, to settle with a party for less than the full amount of HT, subsidy, do the. Proposal, would also remove, the provision, committing a bank to obtain fire whoo-woo from the agency, of a proposed HD. Subsidy. Syphilis, the. Agency has determined there, is no need to retain this option, because it is rarely been used the. Banks are introduced to subsidies, doesn''t, for many years without seeking prior approval, from the agency. Moreover. The, proposed rule does clarify the factors, that banks should consider, in deciding whether. To settle with their practice sponsors, which are further mitigate any. Needs for prior approval from the agencies. This. Concludes the overview of the proposed rule next. Cynthia, will discuss the submission, of public comments, on the proposed rule for consideration by, the agency, in developing, the final rule. So. Let's, start is to slide 23 please. Thank. You Tiffany. So. If you want to submit, comments you or your organization on. The proposed rule as you've heard today please submit, those comments, by May 14, 2018. Comments. Can be submitted, electronically. To the web portal, as shown here as shown here or in. Writing to the mailing address that you'll find on the proposed. Rule please, do not use. The. Mailbox that you used to register for, the webinar today, to submit your comments from the rules your. Comments will not be considered, if you do. So. Let's also move now to slide, 24. Nation that you sing today will also be emailed, to all participants. At. Some time during the next week and will also post it on FHFA. Gov, along. With links to the press release and the proposals, so. With that Ted, and presenters. Should. We answer, some questions, I believe we have had, some submitted, we. Could go to the next slide for question one please. Question. One why. Did the proposed will focus on requiring, the banks to achieve outcomes in, conjunction. With the implementation, of their HP rather. Than their current scoring, system. So. The. Agency, believes is, proposal. To implement an outcome based approach, for awarding, hdfs, these will enhance each things ability, to address their specific affordable. Housing engines the. Outcome based approach, will require that each bank award a minimum, percentage of this annual total, HP fund, to. Private senator expertise. Identified, in the HD statute as well, as regulatory, bodies established, by, the agency. It's. Important, to note that the proposed ECHA tory and regulatory, authorities, encompass, many other priorities that the things currently, need for HP funding also. Under, the supposed role the, banks would have the flexibility, to choose among regulatory, priorities, and to select which housing, needs to address under, each of those regulatory, priorities.

The. Proposed rule would also provide, each face more flexibility. To design and implement its, own scoring, system, or, its general funds in any targeted, funds established, by the bank to. Propose new, optional, target funds that are discussed, previously would. Address specific, affordable, housing needs and the banks district. Finally. The proposed rule would give greater flexibility. To the banks to allocate, their total annual HP, funds among those, various programs, in the HP. Okay. Moving, to slide 26. Question, 2 this. Is Marcia, the. Proposed. Rule would require that, at least, 55%. Of total, annual. HP, funds each, statutory. And regulatory priorities. But, this in mind how, has the proposal, provide, the bank's greater, flexibility. To allocate, their HP fun, and. Our. Answer, is as follows. FHFA. Designated. The proposed, rules to enhance, each bank's, ability to. Address the specific affordable. Housing needs in its district. Since. Affordable, housing needs need, vary significantly, from. Bank districts, bank district the, proposed rule would require each, bank to assess the. Affordable, housing needs within, its districts and, select. Some of those housing, needs to address with HP, fund a, number. Of these housing needs are likely to overlap, with the statutory and, regulatory priority. The. Bank will have more flexibility. To allocate, and award HP, funds to address those districts, priorities, than, under, the current regulation, a, percentage. Of annual, total, HP funds, each bank could allocate to its homeownership set-aside, programs, would, be increased, from 35%, to, 40% and, the, percentage, of funds required, to be allocated, to the general, fund would. Be reduced, to, 50%. The. Banks could also allocate, up to forty percent of, the funds to. Targeted. Funds, addressing. Specific, housing needs in the. Bank's district. The. Banks would have the authority to design, their own scoring, systems, for their general. Fund and targeted, funds to, address those district housing needs in, short, the, banks would have greater flexibility. To determine how, to allocate their, HP funds, towards. Meeting specific, housing, needs in their districts, and that. Would also be applicable. To, how they choose, to meet the statutory and, regulatory priorities. Okay. Moving, to slide 27. And question 3. Question. 3 the, proposed, rule would increase the end, maximum. Homeownership, set-aside, program funding, allocation, from, 35%, to, 40%, this. Would appear to decrease, the amount of funds available for rental housing why, did FHFA, proposed this change and. The. Answer. Epic's. If they did not design, the proposed regulatory, amendments. To advantage, or disadvantage, one. Type of affordable, housing over another at. The HSA instead, designed, the proposed rule to enhance, each base ability. To, address the specific affordable. Housing needs in its district. And. That can certainly include, rental housing, just. Discussed. The proposed rule will provide the banks more flexibility. To allocate, an award HP, fun. Since. Affordable, housing needs may vary significantly. Between. Banks, districts, each, bank would best, be affordable housing needs within, its district, and select, those to be addressed in the. HP. And. That might include rental housing, although. The proposed rule could, increase the percentage, of total, HP funds. Each bank could allocate to its homeownership set-aside, programs, from. 35%, to, 40% would. Not mandate, that any bank do so, it. Is true that implementation. Of the proposed rule could result in a reduction in HP, funds awarded, to rental projects, in a given year however. The. Proposal could also result in a significant, increase in HP. Funds awarded, to rental projects, if, a, bank decided, to allocate more HP funds, to, its general fund and targeted funds and. Prioritized. Funding. For rentals projects, within those. Okay. Starik, and I'm moving. On to question, four which is on slide 28. And. I'll read the question, I will. Epis, if they ensure, that the Federal Home Loan Banks, achieved. The. Proposed, outcomes, so, in response the. Proposal. Would require that the banks provide. FHFA. Copy of, their, targeted, community, lending plans, for. Review, of not, approval, before. Releasing, these, plans to the public. FHFA. Would review each banks analysis, and support, for allocating, its annual total AHP funds to its general fund any targeted. Fund or, funds, and, any, homeownership set-aside, programs. FHFA. Also, conducts, annual, examinations. Of the banks which would include examination. Of the bank's implementation. Of a jhp. And its, fulfilment, of the, proposed statutory. And regulatory outcome. Requirements. The. Proposal, would require each, bank to submit, an annual report to, FHFA. Demonstrating, the bank's compliance, with. The outcome, requirements. For the statutory and, regulatory, priorities.

And Finally. The. Director of FHFA. Will determine annually, each bank's, compliance. With. The proposed outcome. Requirements. So. I'm, moving on to question five, and that's, on slide, 29. And. I'll read the question. What. Would be the, consequences. If a Federal, Home Loan Bank, does, not meet the outcome, requirements. In the proposed rule, so. In response to this question if a, bank fails, to, meet one or more of the outcome, requirements, and, FHFA. Determined. That meeting, the outcome, requirement, was feasible. FHFA. Could. Require, the bank to take actions. To remedy the, non-compliance. We. Could required, the bank to develop and implement, a remedial, AHP, housing. Plan to improve compliance, in the next calendar year and the. Proposed housing plan requirement, this hope excuse, me this proposed housing plan requirement, is similar, to, what is required in, the enterprise housing, goals regulation. All. Right so, I, will. Respond. To question six which is on the next slide slide 30 which. Is when will the final, will become effective as your two questions again and will. There be a transition, period for implementing, the, New Age P requirement, so the. Answer the first question is we. We. Fully. Expect, to publish the final rule, by. The end of this calendar year, with, respect to the transition, I. Think. We certainly understand. And fully, expect, that there the number of things that we talked today would take, time. To implement and. So. We're interested in your comments, as. Part of how. You would be responding to the proposed rule about. Which. Provisions would, take a longer period of time. And. Which. Potentially. Could be implemented. More quickly for example could. Some prevent provisions. Be made effective 30 days after publication of. Final, rule. Such. As provision. To eliminate the five-year retention period, or other changes. We've proposed for the homeowners outside or. Other. Certain provisions require a longer period for, implementation, such as the. Revised targeted. Community lending plan adoption, of provisions. To the banks of. Scoring. Frameworks, so. We. Fully understand. That. A. Lot, of change would, be needed here and were to, be very helpful in the comments to get some sense of what. Those timeframes would be. So. Moving on the question seven is slide 31. The. Scoring framework in the current HP regulation. Prioritizes. Housing for homeless households with. A required, minimum allocation of, funds the. Proposed rule would not place a scoring emphasis, on housing, for homeless households, why. Is that kgf a proposing, this change so. Our. Response is as follows as discussed. Earlier the, agency did not design the proposed regulatory, amendments. To advantage or just one, type of affordable, housing over another the. Agency, instead designed, the proposed rule to enhance, to thank the ability to address specific. Part of affordable, housing needs in his district and this, certainly could include housing, for homeless for, homeless populations. If, you'll. Note this is um housing, for homeless populations. Is also included, under the proposed regulatory priority, underserved. Communities, and population. Since. Affordable, housing needs may vary significantly, from. Bank district event districts, each, bank would assess the affordable, housing needs within. Its districts and select. Those to be addressed, in HT, this. Might include housing, for homeless individuals. While. Implementation. Of proposal. Could, result in a reduction in HC funds or, what if the homeless project in a given year it, could also result in an increase in HT. Awards funding to those projects, if, a banks are fighting to allocate more HP funds, to, its general funds and targeted. Funds that, prioritize, funding for, homeless projects, I will. Now turn the presentation back, over to Cindy Thank, You Tiffany. So. We do have a few minutes left so if, the panelists are willing let's take some of the questions that have come in, Tiffany. Maybe you could take this first one how, does the proposed, rule assist, disaster.

Areas, And our victims, of disasters, so really finally question given the number of natural disasters that occur in a previous calendar year and many people have been affected across, the country the very common question so thank you for your submission, the. Proposed rule would authorize, the banks to establish, up to three targeted, funds to. Address specific, affordable, housing needs within, the districts that are either unmet, have. Proven to be difficult to address through, the competitive, application, process, or align, with the bank's, objectives. In their strategic plans, and this. Because it includes assisting HD. Income, households, that have been affected by natural disasters. These. Targeted funds too would be administered, in the same way that the current competitive, application, process is administered, across the bank system, and it. Would be in a manner consistent with, the housing needs that the target fund was intended to serve, the. Banks are contained to have the authority to establish homeownership. Set-aside, programs, which many of them continue to do now that actually do address some disasters, and other types, of macomb currencies. That happen. Though. Some has this affected, households. Then. They also is home such as some unoccupied rehab, and they provide downpayment. Assistance and, closing costs - first of all, Thank. You Marcia. Maybe you could take the next questions, we've, received, could. Have Bank designs, of scoring, for. The general fund so only. Rental, projects, qualify, and have a targeted, fund that only. Owner-occupied. Rehabilitation. And single-family, Hunters, occupies. New construction, twelve months, okay. Well this is a great question to the. Targeted funds are. New. As we're, proposing them, they're. Not part of the current program so. I'm. Happy to answer, this, question, so. In. Looking. At this question I think. What it's trying to ask is. Whether. Bank could choose to establish. A targeted. Fund for owner occupied housing, and, a, general, fund for, rental projects. Without. Establishing a. Homeownership set-aside, program, and the. Answer is yes, that, provided. That the bank meets its outcome, requirements. For the AHP regulatory. And statutory, requirements. As, prescribed. And I explained on slide 15 a, bank, could take this route. In. This, example. For, the question, where, a bank did not establish, a homeownership, set-aside, program, it. Could allocate, up to forty percent of its total HP funds, to a targeted, fund for. Owner occupied housing, that. Would be subject to the phase-in requirements. That. We. Discussed, for targeted, funds. That. Are explained in more detail and. Proposed. Roll, and. Then the project, I'm, sorry the bank could. Then allocate, the remaining 60% of, its total HP funds, to. A general. Fund which would prioritize rental. Projects. Thank. You so. I think we have time for one more question. This. Question is from an associate, member who. Says they can't participate at, this time the question is does. The proposed, will make any changes, to which, type, of member, banks, may participate, in AHP. Great. Question on the. Proposed rule does, not make any changes, to the types of financial institutions. That may participate. In HP. Housing. Associates, are also referred, to as non-member. Mortgages, are. Not authorized, to participate in, the HP, and that's, because the actual. Statute actually prohibits, that. So. Ted or panelists, do we have any other comments, you guys would like to make I. Know. I just, thank. You everyone for your interest in the program and reading the regulation, and we're, very very, much look forward to, to. Receiving your comments that's, right and please remember to send them in by May the 14th, and this. Actually. Concludes, our webinar so thank you so much for joining us thank. You. Shutting the boxes today the call has now concluded and, you may disconnect.

2018-04-07 15:59

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