Comment Detail

Comment

We believe the Duty to Serve initiative represents an important public policy support for underserved areas and in particular rural rental housing. CARH represents lenders and borrowers that, among other things, participate in the Section 538 Guaranteed Loan program. More broadly, CARH is the trade association representing for-profit and non-profit companies providing affordable rural rental housing throughout America. For over almost 40 years, CARH has served as the nation’s premier association for participants in the affordable rural housing profession, including builders, owners, developers, managers, non-profits, housing authorities, syndicators, accountants, architects, attorneys, bankers, and companies that supply goods and services to the industry. CARH is the only association that solely represents the needs of the entire rural affordable housing industry.

For rural rental housing, Duty to Serve means primarily four things: (1) an important effort to inject equity finance in underserved rural areas through the low income housing tax credit program; (2) the possibility of Fannie and Freddie support for new first loans on rural rental property assisted by the USDA Rural Development Section 515 multifamily and Section 514 farm labor housing programs; (3) the possibility of Fannie and Freddie supporting the Section 538 guaranteed loan program through loan participations or purchases; and (4) capacity building among local nonprofit groups. Clearly, Fannie and Freddie have made important progress in providing valuable equity finance and competitive rates in underserved areas through participation in the low income housing tax credit. We also appreciate the focus on capacity building currently and moving forward.

We note that the Proposed Duty to Serve Plan Modifications would leave out the efforts for Fannie and Freddie to participate in new first loans as well as Section 538 loans. We understand that there can be mismatches between programmatic structures. But we believe the solution is to have a stakeholder meeting with USDA, FHFA, Fannie, Freddie and industry participants to discuss the issues and see what solutions would be available now or, if needed, what legislation would be needed to fix and structural mismatch. Clearly, the Housing and Economic Recovery Act that gave birth to Duty to Serve sought to have the USDA and Fannie and Freddie loan products work in support of the goal of extending credit to rural areas.

We understand some industry advocates are proposing further duty to serve activities by allowing and/or encouraging Fannie and Freddie to purchase housing bonds to support housing finance. Housing bonds are increasingly central to rural rental housing preservation as many properties are being actively preserved as affordable housing in portfolios of different sizes through the use of housing bonds. CARH strongly supports such an initiative.

We appreciate the opportunity to submit comments and look forward to the responses.