April ACTION Update: Congress Passes Third Coronavirus Response Bill; CRA Public Comment Deadline April 8

Join the ACTION Campaign Monthly Call on Friday, April 3

The ACTION Campaign Monthly Call will be held on Friday, April 3 at 2:00pm EST. Call-in information:

  • Phone number: 929-205-6099

  • Meeting ID: 193 634 880

Congress Passes Third Coronavirus Response Bill with Emergency Housing Provisions; Housing Credit Advocacy Continues

Last week, Congress passed and the president signed the Coronavirus Aid, Relief, and Economic Securities (CARES) Act, the third response bill to address the COVID-19 pandemic and related economic disruptions. Key aspects of the bill that have direct or indirect impact on the Housing Credit are:

  • Appropriation of over $12 million for U.S. Department of Housing and Urban Development supplemental program funding;

  • Establishment of a 120-day moratorium on evictions for residents living in properties with federally backed mortgages and any properties with federal assistance, including all Housing Credit properties; and

  • Forbearance for up to 90 days for multifamily properties with federally backed mortgages and many other properties, including most, if not all, Housing Credit properties.

As we reported in an alert to ACTION members last week, ACTION has been pressing for a number of deadline extensions for the Housing Credit program, as these deadlines will be impossible for many developers to meet given the disruption social distancing is having on development and construction. ACTION also has been urging Congress to establish a 4 percent minimum Credit rate, as the floating rate for acquisition and bond-financed production has hit a historic low due to the Federal Reserve’s action to reduce federal borrowing rates effectively to zero.

While the package Congress passed last week does not include ACTION’s initial recommendations responding to the coronavirus, our requests appear well-positioned for inclusion in a potential fourth round of response legislation. Click here to read more on ACTION’s initial Housing Credit asks in response to COVID-19 and other details of the legislation.

CRA Public Comment Period Deadline Wednesday, April 8

The deadline for public comments on the proposed changes to the Community Reinvestment Act (CRA) from the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) is Wednesday, April 8.

Under the OCC and FDIC’s proposed rule, in order to achieve a “satisfactory” or “outstanding” CRA rating, banks would be subject to a presumptive requirement to invest at least 6 percent or 11 percent of their deposits in CRA “qualifying activities,” respectively, inclusive of at least 2 percent of their deposits invested in qualifying community development loans and investments (CDLIs). CDLIs would consist of a wider range of products and asset classes, including affordable housing, community facilities (e.g., hospitals, municipal buildings), essential infrastructure (e.g., roads, sewers), CDFIs, mortgage-backed securities (MBS), and municipal bonds. In order to favor certain types of CDLI activities, the regulations provide that three types of financing would receive double weighting (i.e., $2 of CRA credit for each $1 held): investments (not including MBS and municipal bonds), loans to CDFIs, and loans for affordable housing. The analysis would consider banks’ balance sheets, not originations.

Members of the ACTION Campaign Steering Committee are preparing to submit a comment. Our key concerns include:

  • There is no longer a separate investment test for large banks;

  • There is not currently data that supports the presumptive ratios in the proposal;

  • The range of activities that qualify as CDLIs is overly broad;

  • Double weighting for the Housing Credit and other activities will not likely provide sufficient motivation for banks to seek out these investments; and

  • Reviewing only the banks’ balance sheets (as opposed to originations) during the assessment period may penalize Housing Credit investments.

We will share the letter when finalized. In the meantime, we encourage our ACTION members and partners to read the proposed rule and submit their own comments here.

ACTION Membership

The ACTION Campaign is pleased to welcome the following new members joining this past March:

  • Columbia Residential, Georgia

  • International WELL Building Institute (IWBI), National

  • The Mustard Seed Project of Key Peninsula, Washington

  • National Association of Counties (NACo), National

  • National Council of State Legislatures (NCSL), National

  • Northwest Coastal Housing, Oregon

  • Project Access, California

During this time of economic uncertainty and strain, the Housing Credit is needed now more than ever to support families across the country already struggling to access safe and affordable housing. The larger our coalition, the stronger our advocacy, so please encourage your state and local partners to join our fight to protect, expand, and strengthen the Housing Credit.

Housing Credit In the News

  • A March 26 Affordable Housing Finance article titled, “Massive COVID-19 Relief Bill Includes Funding for Key Housing Programs” details the housing programs set to receive funding in Congress’ third coronavirus response legislation. David Gasson of the Housing Advisory Group and Boston Capital highlights the widespread, bipartisan support of the Affordable Housing Credit Improvement Act (S.1703, H.R. 3077) and notes that language relating to the Housing Credit is likely well-positioned to be included in forthcoming response legislation.

Krista D'Alessandro is the tax policy analyst at Enterprise Community Partners. The ACTION Campaign is co-chaired by Enterprise and the National Council of State Housing Agencies.

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