Comment Detail

Comment

May 1, 2018

Alfred M. Pollard, General Counsel
Attention: Comments/RIN 2590-AA83
Federal Housing Finance Agency
400 Seventh Street, SW, Eighth Floor
Washington, D.C. 20219

Re: Notice of Proposed Rulemaking and Request for Comments –
RIN 2590-AA83 – Affordable Housing Program Amendments

Mr. Pollard,

Thank you for the opportunity to comment on your recent release of the proposed rulemaking regarding the Affordable Housing Program (“AHP”) of the Federal Home Loan Banks (FHLBanks). I am the executive director of the Women’s Community Revitalization Project, a community based organization that is committed to social and economic equity for low-income women and their families. We develop affordable housing, provide supportive services, advocate for policy change and promote leadership, dignity and justice in the neighborhoods where we work in Philadelphia, Pennsylvania.

Over the last 30 years, the Women’s Community Revitalization Project (WCRP) has developed 300 homes that are affordable to families earning at or below 30% of our area’s median income. We began working with the AHP program in 2008 and have received support for 189 homes. AHP subsidy for these developments in the amount of approximately $2,000,000 will have leveraged more than $58,000,000 of additional funding in our community.

All of us at WCRP are concerned with some of the proposed amendments. Our concerns include:

• Outcomes Framework-- Under the proposed amendments, the outcomes framework may essentially eliminate FHLBank discretion in addressing local housing needs, establish preferences for certain project types and make AHP less transparent.

 WCRP recommends continuing with a scoring-based system rather than an outcomes-based framework which will allow FHLBanks to sufficiently respond to local needs, encourage all project types to apply and maintain program transparency.

• Homeless and Supportive Housing – The proposed amendments change the threshold amount needed for projects to qualify as serving targeted populations from 20 percent to 50 percent.

o For more than 30 years WCRP has developed housing for the poorest families in Philadelphia and our developments include households who have been homeless, but rarely do 50% of the folks who apply for our homes fall into the strict definition of homelessness. This amendment will diminish the opportunity for WCRP to successfully participate in AHP in the future even though our homes consistently serve families who earn substantially less than 30% of AMI.

o This change is not compatible with other funders and does not recognize the benefit of a mixed-occupancy development, which allows developers to cross-subsidize units in a project.

 WCRP recommends retaining the current 20-percent threshold amount.

• Homeownership Retention – Under the proposed regulation, the five year retention agreement for homeownership is eliminated.

o This can be a beneficial change for households that need a moderate amount of AHP funds to purchase or rehabilitate a home. But for projects requiring larger amounts of AHP per unit, it introduces a risk of misuse that FHLBanks need to have the flexibility to address. Specifically, elimination of the retention agreement may increase property “flipping” for projects with a relatively high per unit AHP subsidy, particularly in rapidly appreciating markets
.
o WCRP knows 1st hand the need for affordable housing preservation. We applaud FHFA for raising this issue and support FHFA’s Duty to Serve regulation. Along with other groups in our area we have created a community land trust to ensure permanent or long term affordability in our commuanity which has experienced a spike in market values. But we believe that this issue should be addressed through a scoring structure or set aside that prioritizes long term affordability.

 WCRP recommends that FHLBanks are allowed the discretion to use a retention instrument in certain situations.

• Re-ranking Projects — It’s my understanding that this would require that FHLBanks would need to “re-rank” applications to satisfy the outcome requirements if those goals would not be met using only the scoring criteria. This poses risks to the core of the program: re-raking is not objective, it is not predicable and it is not transparent.

 WCRP recommends that FHLBanks continue to use a point structure for scoring applications. A point structure gives the FHLBanks more flexibility to address district needs.

• Project Modifications – Under the proposed amendments, AHP project modifications may be delayed, and AHP sponsors unduly burdened, due to a new “cure-first” requirement.

 WCRP recommends that the proposed cure-first requirement be eliminated and the FHLBanks retain their current practice of verifying that any modified project would still have scored high enough in the funding round to receive the AHP award had the sponsor applied for AHP funding with the modifications in place.

• Sponsor & Affiliate Capacity – The proposed amendments require FHLBanks to evaluate the ability of the sponsor and all members of the development team to perform the responsibilities committed to in the application. The entire development team may not be in place at the time of AHP application, making it impossible to assess total capacity.

 WCRP recommends retaining the FHLBanks’ current practice of reviewing the prior experience of the development team in place at application.

We commend FHFA for working to update the AHP regulation. However, in light of the concerns above, we respectfully ask that you reconsider parts of the proposed amendments, especially the
 required outcomes framework,
 threshold for homeless and supportive housing and
 homeownership retention.

Thank you for hearing our ideas. If you have any questions, please feel free to contact me by phone 215 280 1549 or by email nlichtash@wcrpphila.org.

Sincerely,

Nora Lichtash
Executive Director
Women’s Community Revitalization Project
100 W. Oxford Street Suite 2300
Philadelphia, Pennsylvania 19122