Comment Detail

Comment

Mr. Jim Gray
Federal Housing Finance Agency
Manager, Office of Housing and Regulatory Policy
400 7th Street SW., Washington, DC 20219

Mr. Mike Price
Federal Housing Finance Agency
Senior Policy Analyst, Office of Housing and Regulatory Policy
400 7th Street SW., Washington, DC 20219

RE: The National Association of Women in Real Estate Businesses (NAWRB) Comments:
The Federal Housing Finance Agency’s Enterprise Duty to Serve Underserved Markets Notice of Proposed Rulemaking (NPRM) and Request for Comments

Dear Mr. Gray and Mr. Price,

Thank you for the opportunity to provide comments on the Federal Housing Finance Agency’s Enterprise Duty to Serve Underserved Markets Notice of Proposed Rulemaking (NPRM) and Request for Comments.

The National Association of Women in Real Estate Businesses (NAWRB) is the most visible women's trade association specializing in the housing economy. NAWRB is dedicated to providing women the tools and opportunities for economic growth and expansion, while advocating and promoting women-owned businesses in housing. We are the only third-party industry-specific certifier of Women-Owned Businesses (WOB) and Minority Women-Owned Businesses (MWOB) in the housing economy.

NAWRB empowers women in our advocacy relationships with the Office(s) of Minority and Women Inclusion (OMWI), Government Sponsored Enterprises (GSE), the Small Business Administration (SBA), the National Women's Business Council (NWBC) and other organizations. Since August of 2010, we have been championing the OMWIs, GSEs, SBA and NWBC to bring more diversity and inclusion to our industry with their awareness, opportunities and access.

Comprised of C-suite level women from several sectors of the housing continuum, our Diversity and Inclusion Leadership Council (NDILC) has the mission of bringing women to the forefront of the housing industry with accountability and results, by increasing the number of women in the boardrooms and executive offices of America. Our Women’s Homeownership Initiative (WHI) is dedicated to increasing female homeowners across the country and offsetting women’s poverty levels, from helping prepare women for homeownership though access to financial literacy workshops and calling upon banks to create special services for women homeowners.

In response to the Federal Housing Finance Agency’s Enterprise Duty to Serve Underserved Markets Notice of Proposed Rulemaking (NPRM), we provide the following comments to these questions for which we are best suited:

16) Are there other segments of the manufactured housing market besides those discussed above that warrant Enterprise support under the Duty to Serve, such as communities located in lower-income or economically distressed areas?

The Enterprises should definitely extend their support under the Duty to Serve to communities in lower-income and economically-distressed areas. As areas in which residents struggle significantly with financial shortcomings, lower-income and economically distressed communities would have a lot to gain from Enterprise help such as affordable, fixed-rate financing options.

Homeownership has the ability to provide stability and security for families fortunate enough to achieve it. At the very least, the opportunity to own a home, in this case a manufactured home, provides families with a home and the pride of having a place to call their own. For people residing in low-income regions, it could provide stability and growth in several aspects of life, both personally and professionally.

Financial shortcomings can lead to familial turmoil and broken families. According to the U.S. Census Bureau, more than 1 in 4 families with children under the age of 18 are headed by a single parent, and more than 3 out of 4 single parent families are headed by a female. In the U.S., 30.9 percent of families headed by women with no husband present live below the poverty level. Of these, 40.5 percent households have children below 18 years of age and 47 percent have children under five years of age. Living in financially underprivileged states has deep adverse effects on these families; by making manufactured housing more accessible, the Enterprises would help lessen these hardships.

20) Would the proposed methodology for determining affordability effectively approximate the incomes of the community's tenants? Are there other approaches that could effectively approximate the incomes of manufactured housing community tenants to comply with the Duty to Serve family income requirements, e.g., the size of the blanket loan on the community or the size of the community?

NAWRB contends that the proposed methodology for determining affordability of comparing the median income for the census tract in which the community is located with the median income for the entire metropolitan area would be helpful in creating and preserving affordability in manufactured housing. However, as with all practices that adopt a broad approach rather than a specialized one, this methodology runs the risk of overlooking extenuating circumstances within these communities that affect what a household can actually afford. A person may earn significantly less than the median income for their region, another may have extreme medical expenses that most people don’t.

For this reason, it is important to utilize a more focused approach when determining the proper range of affordability for a given region. By using a matrix with alternative provisions incorporating more parameters, it allows for a specific look at a family’s personal characteristics. A major medical expense although normally temporary, can completely displace a family and severely impact their ability to move forward. As affordable housing is a moving target with many factors, detailed analysis will help provide more families the ability to reap the benefits of access to manufactured homes.

27) Are there other options on how to interpret preservation of multifamily or single-family affordable housing that FHFA should consider?

Census data shows that over one in four American families spend more than half their income on rent and utilities, leaving little money for other necessities. Affordable housing is on the decline, so it is important not only to preserve it but to create it as well. The FHFA should consider poverty and the percentage of income housing and utilities utilize when interpreting the preservation of affordable housing.

As a basis, the FHFA should take into consideration that rent and utilities should not consume over half of a household’s monthly income. Ideally, housing costs would use significantly less than half a person’s monthly income, but less than half is a fair starting point. Furthermore, poverty should be taken into consideration.

Housing that takes up less than a household’s monthly income is beneficial to people struggling with affordability, but it is important to remember that this would not necessarily exclude these households from living in poverty. For example, a household could be living only off of one paycheck, and even though only 45 percent of it goes to rent and utilities, the remaining 55 percent could prove insufficient depending on family size and other necessary expenses. By definition, affordable housing means only that residents can pay for the rent and utilities, but it would be extremely supportive to Americans throughout the country if living in affordable housing and living in poverty were mutually exclusive.

51) Should Enterprise support for multifamily properties that include energy improvements resulting in a reduction in the tenant's energy and water consumption and utility costs be a Regulatory Activity?

Enterprise support for these properties should come in the form of an incentive, as a minimum. Reduced energy and water consumption helps with the environment and affordability costs. Whether the support comes in the form of ensuring these properties are preserved or in increasing affordability through additional initiatives relating to financing or government sponsored improvements, it is important they receive the attention they deserve.

53) Should the Enterprises require the lender to verify before the closing of an energy improvement loan that there are reliable and verifiable projections or expectations that the proposed energy improvements will likely reduce the tenant's energy and water consumption and utility costs and, if so, what standards of reliability, verifiability and likelihood of reduced consumption and costs should be required?

The cost to verify each home could be quite costly and take a long time to recoup the expenses, as there also will be ongoing maintenance. Companies providing energy efficient products could submit to a third party verifier to be placed on an approved list. Once on the approved list and after receiving a letter signed off by one of their approved vendors of installation, this would be used as required documentation. As to the amount of savings to be on the approval list, we will defer to experts in energy systems.

It would also be a great service to stabilize utility bills at these properties. This would help residents accurately anticipate their monthly costs instead of managing the usual constantly fluctuating utility bill.

54) Should the Enterprises be required to verify, after the closing of an energy improvement loan, that the energy improvements financed actually reduced the tenant's energy and water consumption and utility costs and, if so, how can they verify this?

See response to question 53. Once installed by an approved vendor and product, this will suffice. No need for reverification.

64) Should Enterprise support for affordable homeownership preservation be a Regulatory Activity?

Yes, the support of affordable homeownership preservation must be a Regulatory Activity. With rising rents and stagnant wage increases, an appreciating number of Americans are being priced out of homeownership; equally worrying, those who can afford homes have to balance elevating prices fueled in part by low inventory levels with the limited selection of houses from which to purchase.

For all of these reasons and more, it is important that the Enterprises extend their continued support to preserving affordable housing. With a homeownership rate that rivals the historic lows of the 1960s, the U.S. needs to make homebuyers out of renters and needs to decrease the amount of renters living in poverty. Renting is historically appealing because it provides financial flexibility in comparison to buying, but the past decade has seen the benefits of renting diminish greatly.

Homeownership provides incredible benefits. A home provides owners with a sense of accomplishment and achievement. It helps them traverse their lives and it has the potential of creating a stable environment for families. Homeownership needs to be attainable and the means necessary to buy a home must be realistic. If affordable housing is not supported, by the Enterprises and others, we are in danger of creating a generation of renters in which homeownership becomes more and more the exception.

Sincerely,
Desiree Patno