The U.S. Department of Housing & Urban Development (HUD), the U.S. Department of Commerce (DOC), and the U.S. Department of the Treasury (Treasury) are responsible for implementing federal policy on issues related to housing, community, and economic development. Following are links to recent agency regulatory activities that may impact cities and towns.
On June 15, 2012, the Federal Housing Finance Agency (FHFA), in response to a court order, issued a Notice of Proposed Rulemaking on Enterprise Underwriting Standards for Property Assessed Clean Energy (PACE) programs.
The proposed rule would instruct the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (together, the Enterprises) to take any necessary actions to remove first-lien PACE obligations from their portfolio, instruct the Enterprises not to purchase any mortgage that is subject to a first-lien PACE obligation, and instruct the Enterprises not to consent to the imposition of a first-lien PACE obligation on any mortgage.
The proposed rule also outlines three alternatives that FHFA is considering, including adoption of key underwriting standards.
An FHFA official Statement issued on July 6, 2010 and a Directive issued on Feb. 28, 2011 objected to local governments holding the first lien on PACE homes to ensure repayment of public funds if the home goes into foreclosure, calling this a significant risk to the mortgage financier.
NLC supports local authority to implement PACE programs and contends that participation in the PACE program does not affect the safety and soundness of mortgages. NLC will submit comments on the Notice of Proposed Rulemaking by the Sept. 13 deadline and encourages cities and towns in the 28 states that allow PACE programs to also submit comments to FHFA and to share them with NLC.
NLC comments on proposed federal accounting requirements that would narrow the definition of eligible assets for Federal Home Loan Banks (FHLBanks). The rule, if enacted, would have resulted in the diminished ability of FHLBanks and their member financial institutions to partner with cities and towns to finance economic and community development. NLC challenged the Rule's definition of "eligible" as contrary to Congressional intent.
NLC Comments to FHFA (4/26/10)