Transcripts For CSPAN3 Acting 20240627

Housing supply and reducing cost for borrowers. This is before the Senate Banking committee. It is an hour and 45 minutes. [inaudible] [inaudible conversations] committee on Housing Urban Affairs is called to order. Thanks to the two witnesses joining us. Home is more than four walls and a roof for the play and do their the committee on banking, housing, and urban affairs is called to order. Thanks to the two witnesses joining us. Home is a lot more than four walls and a roof. Home as we go after a long day of work and your kids play and do their homework. Home is where you plan for the future and build wealth. Home is how millions of families join the middle class. And our homes are anchor in our lives but for too many and the country, a home they can afford and told their life around feels out of reach. I hear it in ohio everywhere. I hear it in lima. Summer where i grew up in mansfield. A new building with 54 apartments for working families just open. For those 54 apartments, they had 511 families. I heard in Southeastern Ohio were they struggled for years to build 48 homes for seniors. I herod in Franklin County and in central ohio and columbus for the publish has grown by 14 to more than 1. 3 million people. But housing supply has not kept up in price has been rising for years and years. With more people without enough homes, 40 of renters in this country are paying more than they can afford for housing, and that county with its world class schools and Skilled Workforce is great quality of life. It will only continue to grow. I hear the stories from across ohio. It is not just happening in ohio. Whether you are in downtown columbus or minneapolis or rural south dakota or wyoming or South Carolina. The problem is the same. Housing is too expensive and it has been for years. One big reason is we do not have enough of it for the past decade. For the past decade rent has gone up and up and up. One in four renters pay more than half their income in rent and and more than half your income goes to rent it is hard to juggle all the bills let alone save for a down payment. High rent stops people from becoming homeowners. People think, if only i could come up with a down payment. The money for the down payment is what stands for between millions of americans and homeownership in building generational wealth. That is why my bill would support firstgeneration homebuyers with senator warnock and the helper act aimed specifically at the down payment toward equity act for teachers, firefighters, and police officers, to allow them to buy homes in their communities and other sources of down payment assistance. All of that is so important. Secretary dobbin. Drucker thompson. Your agencies are at the center of our efforts to lower the cost of housing. Your agencies do not build housing, but you are on the front lines of our Housing Markets. Your job is to make sure there is affordable financing for the housing that builders and providers create and so that families can get a mortgage to buy their first home and dennis americans get older they can still live safely in their homes. And both of your agencies have announced changes that should help increase housing supply and bring down costs. Following calls from senator reed and me and others we have acted to improve access to Affordable Housing through fha and the federal financing bank. This will help Housing Providers and states build and preserve more Affordable Housing for renters across the country. Loan limits to manufactured housing. Converting Old Office Space into homes. It will open up new Housing Options, especially in cities like cleveland. You would eliminate up front fees that have charged lower income to firsttime home buyers and they cannot afford a big down payment to begin with. You have also refocused the Federal Home Loan Banks not just on markets but on helping to support housing with families and communities need. But the fact remains that housing prices are still far too high. They have been for years and years. It will take all of us working together, Housing Providers, federal, state, and local governments. We need to stay vigilant and in short taxpayer money is actually serving pennies and not enriching city landlords and wealthy investors. In ohio and around the country. Wall street firms. And other outside investors are swooping to communities and by up properties. They evict tenants. They drive up local housing prices. They should pass the stop predatory investing act to stop tax breaks for buying up numbers of singlefamily homes. We need to ensure all are Single Housing agencies are on the same page and not in any way supporting this predatory Business Model. State and local governments have a lot of influence over the housing in their communities and cities and counties are making changes like updates to zoning, like shortening the lengthy approval processes to open up housing and opportunities for new housing, and expand access to affordable homeownership. A critical partner in supporting that work. Earlier this year, Franklin County commissioner kevin voiced testified in the senate for the National Association of counties about the Critical Role that homes, see pdg, and the Housing Trust fund play in helping counties of every size address housing needs. Local communities depend on this partnership, and even with more housing, some families working lowwage jobs and some seniors on fixed incomes will not make enough. Cannot hear the room. Sorry. What was that . Okay. Huts Housing Assistance program is a you have never done it . Okay. Welldone. I am almost done, senator scott. Take your time, mr. Chairman. I need to make sure they work effectively and efficiently to serve our communities and protect our investments. Last month is committee had a hearing on legislative proposal to help expand our housing supply and bring down the cost of housing. We must continue our bipartisan work to move forward on comments and proposals that will help us expand Housing Options and reduce costs. I look forward to continue working with Ranking Member scott on this committee toward that goal. I look forward to hearing today from the two leaders before us about what they have done, what more they can do, and what resources they need to get there housing more affordable for renters and for house members. Ranking member scott . Thank you both for being here. Congratulations. 30 days is a long time. We will be completely prepared for everything we are talking about over the next couple of hours likely. Thank you, mr. Chairman, for holding this hearing. This is something absolutely essential for us to be able to hear from our regulators as often as possible to achieve the goal of american homeownership because american homeownership is not just homeownership. It is in the eyes of some the americans the American Dream. If we are going to close the wealth gap we have talked so much about, one of the ways to do that is by creating equity. And creating equity really comes from homeownership as much as it does any other place in our economy, so thank you both for being here. The thing about the value of homeownership consistently is americans, somewhere around 12 trillion on their mortgages. Mortgage deck accounts for about 70 percent of Consumer Debt in the United States of america. Not an insignificant amount of money. And yet the last time we had this hearing was back during the trump years when german treatment was chairman of this committee. I certainly hope we have more opportunities to hear from both of you at the same time going forward. The American Dream of homeownership is further out of reach today and it was just a few years ago despite all the subsidies and all the trillions of dollars we spent over the decades. Little has changed. In 1970, the homeownership rate in america was 64 . Today it is 65 . Since the passage of the Fair Housing Act in 1968, the goal was to eliminate housing discrimination. The homeownership rate for African Americans has not changed much. 41 something. It just continues to have a very slow growth trajectory. Our housing regulators must testify more often so that we can find ways to deal with the challenges that housing presents to so Many Americans. Since President Biden has taken Office Mortgage rates have ballooned by 150 . Rents have gone up about 20 . Homelessness is up 12 in a single year. The highest number on record in the history of our country. Despite empty promises from the white house about helping working families, the simple fact is that housing costs under this demonstration have skyrocketed. I see that at home in South Carolina and across the nation as i travel. I see that in families right about how to make ends meet and watching the dream of homeownership seeming further and further and farther away. What has become apparent is that the administrations attitude about affordability and housing has failed to line up with their policies. Reckless spending on progressive wish lists field runaway inflation and now americans are painfully aware that bidenomics has not helped them but instead burdened them so much. The mountains of red tape and regulations this administration has put on Housing Providers are only making the matter so much worse. Additionally, both hud and hfa have taken actions that will unnecessarily increase the cost and unnecessarily burden communities. Rent controls and s hfa is asking for Public Comments on policies including rent control, following direction from the white house. But what do these policies mean in practice . They have the potential to limit the number of people served by these programs and restrict the supply of Affordable Housing. Decades of research have proven that rent control policies make housing supply and affordability issues worse, not better. But this is the type of backwards logic americans have come to expect from joe biden and bidenomics. Second, hud, unfortunately, joined other federal agencies under this administration while attempting to add climate regulator to the list of duties. For instance, hud proposed requiring only constructed subsidized housing be built to increased Energy Efficiency standards, even though hud itself admits that lower income households may not be able to afford the added burdens of additional costs. According to the National Association of homebuilders, these new environmental mandates can cost as much as 31,000 to each new home. So, at the same time a family is facing doubling and tripling food costs, in order to meet the Green Climate goals, this administration saddles them with an extra 31,000 of additional expenses for a single home. Families and communities like the one i grew up in cannot afford new climate costs that increases the cost of housing. This brings me to my last example. It appears this administration has also been embraced by our housing regulators. Laster hud proposed a rule encouraging cities applying for federal funds to remove crime free ordinances, local laws that keep rental community saved by kicking out convicted criminals. Even worse, hud proposed a rule last week that would make it easier for criminals to live in hud subsidized housing which risks making communities less safe. We need to reverse course and take a different road when it comes to federal housing policy. That is why i announced housing as one of my Top Priorities for this year as a Ranking Member of this committee. And since our first hearing last april, i focused my efforts on building consensus around the commonsense, nonpartisan reforms to all segments of our Housing Market included in my row to housing act. I continue to urge consideration on my road to housing act which takes a comprehensive view of federal housing policy and recenters support around families helping those who are homeless, renting, or prepared to buy a house. It is past time to consider my legislation along with other commonsense bipartisan proposals that would include Real Solutions to housing challenges. I look forward to hearing from both of the Witnesses Today and i look forward to having an eager conversation about some of the challenges that somebody americans face as this relates to building on their version of the American Dream. Thanks, senator scott. Adrian scott, she was confirmed as a deputy secretary in 2021. Acted surgery scott was o see it holding multiple roles at the d. C. Housing authority and served in several career positions at hud. Thank you, secretary todman. Prior to joining fhfa, she spent 18 years at fdic where she held a number of senior level positions including director of the position of management and supervision. Director thompson, welcome back. Madame acting secretary, welcome. Thank you. Chairperson brown, Ranking Member scott, and distinguish members of the Senate Banking committee, thank you for the opportunity to testify today on how the department of housing and urban development is executing on our mission, and i want to thank the over 8000 hud employees across the country who are helping us carry out that mission. First, let me say the support of this committee is critical to ensuring that the American People have access to housing that they can afford in communities that are stronger and resilient. So thank you for your continued efforts to lead and legislate on these issues. As you are aware, this is my fourth week serving as acting secretary. We are grateful for the extraordinary stewardship of the department during the last three years. Her northstar was ensuring that we centered our work on the people, and that star still shines brightly. Under the leadership of President Biden and Vice President harris, hud has made historic strides to serve the people we serve. We have improved rental assistance, expanded opportunities for homeownership, supported the creation of Affordable Homes to rent and to buy, supported resilient communities, worked to root out housing discrimination, and helped people who do not make a lot of money just get a fair shot. Huds work and resources are having a tremendous resource impact on people in every city from the big city and small towns to tribal nations. There were more apartments under construction in 2023 than in any year on record and we are working to build even more. Hud helps over 4 million households annually throw rental Assistance Programs. Under this administration, we have implemented a number of historic changes to ensure that we serve more families and that we support more choice in todays market. In fact, in the past three years, hud has provided families with 120,000 new incremental vouchers, and that is a 20 year record. Actions we have taken to promote homeownership and wealth building has resulted in the higher rate of firsttime homebuyers and we have seen in the last two decades. To fha, we have supported homeowners with purchase mortgages including 1. 5 million for firsttime buyers. L communities. And it last year, we were the first ever package of resources to specifically reach people experiencing homelessness in unsheltered settings and in Rural Communities and we have taken seriously are charged to protect all people facing housing discrimination. With resources from the inflation reduction act, we are providing communities with . 5 billion so far in our multi family portfolio and by doing so, we are also making much to prepare two units across the country. We have pulled together practitioners, experts, and thought leaders were innovating and executing and resourcing new solutions. We have improved our hiring and focused on executing our ideas. And we have had four clean audits in a row. And i am particularly proud of this. I am grateful for the work of this committee and the members of congress who have worked to make Resources Available to us so we can carry out are very important work. We have made strides but acknowledged that there is more work to be done. As we look ahead, we recognize that huds mission is critical for the moms and dads still trying to make ends meet. It is critical for the young families trying to make their first home. It is critical for people who have lost a job and lost their home and are now under house and just need our help. It is critical to ensure Health Hazards in any home and preventing and remedying the impacts of discrimination. For the past two years, the executive branch has been executing on her housing supply action plan. It is an outcomebased collaborative effort across federal agencies and work that i am proud of. Housing is a priority for the bidenharris administration, and the president has put forward a building vision that builds on the existing body of work, and hud is prepared to do our part. Chairperson brown, Ranking Member scott, and care members of the committee, i look forward to working with you. Thank you. I look forward to your questions. Director thompson, welcome. Chairman brown, Ranking Member scott, and distinguish members of the committee, i am pleased to meet with you today to discuss the work of the federal Housing Finance agency and the operations and activities of our regulated entities. Fannie mae, freddie , and the Federal Home Loan Banks. Both renters and homebuyers face challenges in todays Housing Market. Inadequate housing supply, four years of strong home price growth, and elevated Interest Rates have contributed to a challenging environment for Housing Affordability. Homebuyers and renters alike face difficulties in finding a place they can afford to live. While Housing Affordability represents a national problem, the impact is most acutely felt in local communities. I have heard about these issues from working families in cities such as philadelphia, louisville, and las vegas, as well as in more rural areas and states such as nebraska and tennessee. I have heard about the need for more workforce housing, which enables teachers, first responders, construction workers, and municipal employees to live in the communities they serve. I have also heard about dual income renter households that cannot build the savings for the down payment and Closing Costs of a home purchase. And i have heard about Multigenerational Families living in homes that are far too small just to make ends meet. While much of the ongoing discussion about Housing Affordability focuses on the consumers payments, Closing Costs also represent a substantial barrier for refinancing a home. Recently fhs a and the enterprises have been engaged in efforts to explore sustainable measures to reduce mortgage Closing Costs for both current and aspiring homeowners. Early this year, fhfa approved a broader effort. This pilot seeks to approve whether technological advances in the electronic availability of real estate records can result in lower costs for borrowers who just want to refinance their mortgage. They already own their homes and will continue to resign in them. Appraisals are another important area in which enterprises are taking steps to reduce costs from borrowers without compromising safety and soundness. Enterprises in the industry have developed several alternatives to traditional appraisals that address appraiser capacity, evaluation changes, and a shortened process while promoting fair, equitable, and accurate appraisals. The equitable Housing Finance plans produced by fannie mae and freddie or another critical component of their Mission Driven activities. To initiative developed under their plans, the enterprise has supported almost 2 million families in their homeownership journey last year. Some of these initiatives include down payment Assistance Programs, and the use of positive rental payment data for renters to establish or improve their credit scores. Fhfas oversight of the Federal Home Loan Bank system featured an important milestone last november. When the agency released a report following a yearlong comprehensive review of the system, the report included 40 recommendations based on extensive engagement with stakeholders across the country designed to ensure that the banks effectively fulfilled the core objective of their mission, providing stable and reliable liquidity to their members and supporting housing and Community Development. A series of reforms will be implemented to ensure the banks remain wellpositioned to meet the needs of their members and the communities they serve. The priorities ive outlined today represent just a portion of fhfas ongoing work to ensure that regulated entities meet their missions in a safe and sound manner. These actions along with others outlined in my prepared statement aligned with fhfas mandate from congress. In my 30 years as a financial regulator, i have long believed that safety and soundness and access to credit are not mutually exclusive, but instead are complementary. Broad, fair access and the stability of Financial Institutions Work Together as pillars of the nations Housing Finance system. Thank you again for the opportunity to appear before you today. I look forward to working with members of this committee to find Effective Solutions to the challenges of housing supply and affordability. Thank you, director. I will begin the questions. Thank you, for holding this hearing. And Ranking Member, also, thank you for your courtesy. I went to send my appreciation to the two analysts. I want to talk to an issue i have talked to you folks about before. I have talked to about it in this area. Is a longstanding promise that is getting worse and not better. It has to do with huds fair market rates rents. I am sorry. They have not kept up with housing prices in montana. They do not reflect the reality of housing costs. And communities across our state are not being revised in a timely manner. We are taking away vouchers from housing authorities with long waiting lists because there simply are not enough Units Available to be able to use those vouchers. How your agency is handling this now is not working. Okay . I know this is a problem that hud knows about, but the changes you are making to incorporate rents and corporate land records are not going to help us in montana at all. Right now, these programs are not able to serve the folks in montana they are meant for. And i think it is incredibly important that the folks at hud step up and fix these fmrs. I think these programs will end up leaving rural americans behind. So the rents we have in montana communities so that folks can access these housing resources. Thank you, senator, for raising this issue. As you and your team is probably aware, fair market rents are established by hud and updated yearly so we can keep up with what is happening in the market. A couple years ago, we did introduce private data into our calculations there because we had received a lot of concerns the data we were relying on, the agency was relying on, is not really keeping up with the market and what it was showing. I am happy to sit down with either team and the housing agencies to learn more about how our current methodology may not be working for the program, and look forward to talking with you more about that. When is the next and they will be assessed . It is reestablished every year, so it should be the fall of this year. I appreciate the offer to work with me on what is going on. I can just tell you that great falls is the closest major city to where i live. It is not the Fastest Growing city by any stretch of the imagination or under economic pressures. They cannot use vouchers. They simply do not work. I would love to have you address this before the fall of this year because that is six months from now, so if there are ways you can speed it up or amend or however you can do it i would appreciate if you would let us know because we are here to help. I am also happy to have our teammates sit down with the housing agencies to talks about flexibilities that they may have in terms of using their vouchers. This is a problem where we have a program that was set up and it just doesnt work. I am concerned it will worsen until they are left with far few housing vouchers interview resources. Correct me if i am wrong, but we are told that last year took 4. 5 million in housing choice voucher funds from reserve authorities and funds from Housing Authoritys across montana. Now you are telling me they are at risk of shortfall . I could have a lot of fun with this question, but if that is true. If reserve funds were took in a short time later we are saying you have a shortfall it does not take an Nuclear Physicist to figure out why that happened. Could you tell me what happened . And if there is a problem to solve it. I will say i am always happy to work with the housing agencies who i call former colleagues. I will have to take a look at the reserve report and request the shortfall. You are correct that does not seem to make a lot of sense, but i will promise to work with you so that we can correct. Thank you very much. One of the successes of the tax cuts and jobs act was the legislation and opportunities for the democrat in mirror or republican governor both agreed that attracting more housing opportunities into the inner cities of their communities is critical. I think of the method i intended with the democratic mayor in South Carolina where he said the first time in the homes 30 years he has a chance to build homes within his city. Because of opportunities, so we still see a real opportunity. We note that last year they represented the largest spike in apartment complexes being built in our country leading to more accessible housing. I think most of us would agree the largest impacted the lack of supply. Especially for Affordable Homes. And includes a number of solutions that aim to increase supply as well as reserve affordable units that already exist. Specifically my legislation makes crucial changes to the rental Assistance Demonstration Program by eliminating the cap on the number of Public Housing units that can be converted under the program. This would create more opportunities for private capital to help rebuild our nations agent Affordable Housing. A question for you. You previously testified the program has been a critical tool to help recapitalize the Public Housing infrastructure backlog. You also said housing authorities must explore private driven solutions to preserve these units. Do you still agree with your statement and you support lifting the cap on how many units may participate in and be preserved through it . Thank you. One of the things that we have seen with the advent of the rental Assistance Demonstration Program is a number of repairs being made to Public Housing units across the country. I think we all welcome that. I also heard from some of our local and National Advocates about their concerns around the protections tied to these conversion, so i think that we are really excited and pleased at the repair work that has been done and how the program has really turned the tide in terms of investment in a really critical for that houses some of our lowest income families. I would also want to make sure that we are making sure they are being protected as the program grows. Im happy to talk to you more about what an expansion looks like but we want to make sure we are marrying what we are seeing with what we are hearing on the ground. You were deeply supportive of efforts to expand the moving to work demonstration program. Do you still agree with your statement and support legislation authorizing the program . It is another place where we have seen a number of innovations that without the flexibilities afforded to them they probably would not have been able to adopt across a portfolio. A couple of weeks ago i was in boulder county, so we could celebrate the establishment of the last of the 100 agencies that Congress Allowed as an expansion puking may recall congress authorized us to expand it to another 100. We have added over the last 14 agencies to the club and look forward to their work. I will say that moving has been critical with really looking at ways that we can continue to house residence safely. We have seen new forms of services and even ways that agencies are reducing their administrative costs, which is something that we all would want. I completely support moving to work as it continues to be a source of innovation across the housing industry. We have about 50 seconds left. Another question for you on homelessness. I know that we appreciate their services to the country. Are there any proposals that were not implemented that you would like to implement, or do you have any new ideas to help expand the opportunities for our Homeless Population . We saw the greatest spike over the last 12 months basically. Any thoughts on how we can combat homelessness . I think there is a lot of thoughts on how to combat homelessness. One of them is continuing to work with the folks on the frontline to make sure they are using existing funds effectively, but making sure that we have the type of rental assistance and preservation tools we need to prevent homelessness to begin with. We were pleased a couple of months ago to give localities about 3. 1 billion in resources. The highest amount ever to our care across the country so they could continue to do the good work that they do. We are really pleased at the additional vouchers they provided us because we know have been able to stabilize over 120,000 families across the country, so we look for that as a tool of intervention as well. I would like for you all to spend some time at columbia. Spending some time working on new ways to combat homelessness. I met with their mayor yesterday , and theyre spending a lot of time investing resources on ways to do so be we would love to have your expertise on that. Thats an invitation to both of you to spend some time in South Carolina. I appreciate the chair and Ranking Member for holding todays hearing. I want to honor the service of secretary fudge. You are all continuing an important moment for the American People relative to the Housing Affordability and achieving that thing that we call the American Dream. The ability to pass on generational wealth. Across families. Thank you so much for the previous conversation, and i want to pick up where we left off. The analysis conducted estimates that the u. S. Economic losses from the recent california flooding at about 5 7 billion dollars. Last week the insurer with the largest market share in california announced it would not renew the homeowners rental dwelling and other property insurance policies of 30,000 californians. Leaving them financially on the hook for millions or even billions of dollars in the event of future climate disasters. I know that its not just california but louisiana and texas and florida also facing challenges in their property Insurance Markets. In our conversation you mentioned they do not receive notice about insurers with withdrawn from Insurance Markets in the downstream effects that this could have. Could you elaborate on these withdrawals and packs of homeowners and future homeowners not just in california but across the country . Sure. Property insurance is a requirement for any loan that is purchased by fannie mae or freddie mac. They have to have that in order for them to purchase them. When property carriers withdraw from large populations it is very difficult for firsttime homebuyers to purchase a home and have to search for a policy. It is interesting because we are starting to see a lot of natural disasters and the collateral they are responsible for. About 8. 4 trillion outstanding in mortgage collateral, so these impact us greatly. We have multi family properties, so when there is something that happens it impacts the evaluation of our property from an insurance perspective. We are starting to see a number of climate issues or natural disasters take place. There used to be about three issues per year that were costing over 1 billion. Just last year there were about 28 different issues that caused over 1 billion each. The impact on our portfolio where the only asset is mortgage collateral either a house or an apartment is just phenomenal we would really like to work with the mortgage industry to address this issue. What we are finding is that premiums are going up and borrowers are not being able to afford some of their Monthly Payments with little or no notice, so we are also seeing a reliance on state plans for insurance whether it is flawed or otherwise that we really want to address as we try to deal with the cost of owning a mortgage. We actually have been working with the Insurance Commissioners and some of the states that have a lot of natural disasters like california and florida and louisiana. Rhode island. We have been working to try to address this very important issue. To that point really quickly i do want to offer either or both of you the opportunity to talk about what steps we can collectively take in the near term at least to develop a framework for protecting consumers in the event of these natural disasters and provide interest withdrawals . I am happy to pick up where the director left off. They have limited authorities as it relates to the Insurance Industry to what we have done is convened an internal working group to look at how we can help consumers and some of those housing owners who say they are having increased costs because of outrageous insurance increases. As soon as this week we will be hearing them in on some of the things that we can do and a whole body of work that will be holding out including engaging with the Insurance Industry so they can understand the impact on Housing Affordability. It is not just in the homeowners but a lot of the other areas where insurance is finding that if you are making property and casualty repairs. We are trying to cut costs wherever we can with regard to bureaucratic costs of providing homeownership and so forth. I really think this is one that we can very efficiently and simply may because some costs and redtape for some folks. We are all discussing Housing Affordability, but there has been little action on streamlining programs requirements and federal regulations. Removing unnecessary Program Requirements would be a great place to start. Would like to discuss the Environmental Review process. National environmental policy act requires agencies to consider the environmental effects of any proposed action and inform the public regarding their decisions. As you know, the agency carrying out the federal action may create their own procedures under hud regulations grantees must complete the Environmental Review process and maintain a written record of the Environmental Review for every project before decisions are made and actions are taken. For grantee administrative expenses. Can you tell me why when a federal program specifically allows a portion of funds to be utilized for administrative expenses. It requires them to go through the bureaucratic process and actually conducting the review and creating a written record of that determination. We had a good discussion about credit transfers. I asked you about ways that we could incentivize them to create credit risk transfers. I strongly support them as a way to protect taxpayers. You made a very clear you thought the same way. And 2023 the enterprises hosted the Second Lowest transfer in the history of the program. I know that we have talked about this. You understand what a valuable tool that is, but i cannot figure out what is contributing to the trend that is going on. Can you help us with that . I appreciate the opportunity because we think it is a huge component of shifting credit risk to private investors. The reason that the transfers were so low in 2023 is that they are based on the loans that are purchased, and you will remember in 2020 and 2021 we were faced with historic Interest Rates and record lows i should say. The acquisitions were at record highs. Those were the two largest years of long purchases ever for them both. The interestrate environment really stifled the acquisitions of loans in 2023. They went from record highs to very low, so it is really based on the amount of loans they have purchased. Encourage them to utilize credit risk transfers. They have been very innovative, and its really a measure for safety and soundness, which is of paramount importance for us. It appears that probably even for a lot of these folks that do not have another place to go. Your staff has briefed mine on the recovery and action plan hud has developed for the Housing Authority to fix these issues. A plan is not enough for them who have been living in inhumane conditions for so long. Especially being executed by the same authority that has allowed these to fester for years. All the while ignoring or retaliating against residents who spoke out against the problems they were facing. Certainly, senator. I am aware of this issue and also direct Senior Leadership of the office of public and indian housing to take more urgent action. We are working with the leadership at the Housing Authority. What you have described is horrific and no person should be experiencing that. I look forward to something more to that to be honest with you. I view that they Must Immediately take over the Atlantic City Housing Authority to ensure the safety and dignity of its residents. Every day we allow the authority that allowed this to happen to affect the lives of its residents the way it has is a day that it becomes huds problem more than them. So i look forward to you getting back to me on exactly your plan of action. I commit to doing so. Thank you. I was puzzled to see the budget request. Do you believe that huds budget accurately reflects trends in the market for senior rental housing . As you may know, the hud and menstruation are working under the constraints of the fiscal responsibility act. So there was a difficult decision to be made. We think we put forward a budget that considers that agreement and also prioritizes where we know there is a need to. I know the nation is agreeing pretty dramatically. Those who were boomers are graters. At the end of the day if we invest less in supply of Senior Housing while demand is skyrocketing i am not sure what that would do in the marketplace, so i urge you to read look at that. Finally. Secretary thompson. On your work on this issue . The department i understand that hud is working on updates to Energy Efficiency and other construction standards for manufactured homes. I understand while they have primaries stanched the responsibility for regulating manufacturing Housing Department of energy has been working in parallel on their own efficiency updates. Can you share with us an update on your work on this issue . It was compelled i believe by legislation to carry out its work. Hud has a draft rule. I am limited about what i can say, but i know that we are trying to marry the pressing need of Energy Efficiency along with Housing Affordability. We have been working with our colleagues at the department of energy to do that. I would hope that this is something that can be accelerated. I love the fact that your mom and brother still live there. I would like to direct this to you. You have testified that in order to end conservatorship two things need to happen. We have to build capital before ending the governments 15 year long conservatorship. You said that Congress Needs to decide the future of them. The finance system more broadly. On the first point. The quickest way to end the conservatorship is to raise private capital. Just as buildout banks were allowed to do in the wake of the financial crisis. Now that they control so much of the market there seems to be a reluctance to really wish government control. I ask myself why. Judging by the redistributive housing policies that have been pursued while you have been at the home of it its seemed that they are viewed by the Biden Administration as simply backdoors to push his social policy agenda, which is well beyond your mandate. On the second Point Congress has already decided what type of Mortgage Finance system they wanted. That law significantly enhance regulatory and supervisory powers of the agency of the federal homeland banks. The problem is that the obama and Biden Administrations have never taken their feed off of their throats so that they could succeed as private companies. The responsible thing to do for yourself and the attorney general is to consider continue the work that was done by the former director to raise private capital and return them to the private markets. This would result in a 100 billion windfall for taxpayers and could be used to immediately help expand the countrys housing supply and support Affordable Housing for americans who are most in need. We talked about this at the time of your confirmation to the the agency had. Our Housing Markets and american taxpayers deserve to see these brought to an end. I appreciate your full attention to this. Senator smith of minnesota has rearrived. Thank you to both of us for being with us today. I really appreciate it. Everybody we know i think we are here today because we believe that everybody deserves a safe and affordable place to call home. We also acknowledge all of us that for far too many families this is out of reach. I am very grateful to the Biden Administration and chair brown for his leadership and really bring attention to finding solutions to these challenges. Of course housing is incredibly complex. Much driven by the private sector and also local Decision Making when it comes to zoning for example. I think that we could all agree that we need to focus on boosting housing supply and preserving the Housing Stock that we have. We had a very interesting hearing in my subcommittee earlier this week that really highlighted the need to preserve the Housing Stock that we have. My question is for you. And you highlight for us how the department has been working on this issue of housing supply especially in the housing from middle income people who are working the way jobs also. Absolutely. Thank you for the question in your leadership on these issues. They have been very busy not just carrying out its own work making sure that we are executing on the new vouchers we receive. Making sure we are modernizing our rules that i know so many people locally lean on to make sure we are building to their needs. We have also been working with our sister agencies on the new federal financing risksharing, and moving the deadline that was tied to that so that more of them can help support affordability development. Also working with our colleagues at the treasury on the state and local fiscal recovery act and repurchasing those funds for really critically Capital Needs on the ground, so we have been busy, and we think that with the umbrella of the president s housing supply action plan we have been acting as one government to drive this issue. The administration has made some new proposals to help expand housing supply and the Innovation Fund for housing expansion. And you talk about how that could help empower local solutions to increase housing supply . I think youre referring to the president s budget for 2025. It is just that. We want to make sure we are including financing and helping folks with thinking through some of their pro house and work. We are excited to have the new program and will will be rolling out the recipients of that sometime this spring. It is meant to be a program that is of the meeting localities where they are and inspiring them to be able to create local solutions to build housing and to preserve the house and that they have. I also want to talk with you a little bit. We have had quite a few conversations about native housing. I know this is something they also pay very important attention to. We know there are high rates of homelessness and overcrowding, which is really almost a bigger problem because as more than one family crowd into shelter that is just not nearly large enough for them and also the issue of substandard housing. We held a subcommittee hearing on this last year. We have been working with the administration on how we can respect tribal sovereignty and partner with tribes as we work on these issues. Can you talk a little bit about how they are addressing this issue . You will be happy to hear since i took on the job i have been in robust conversations with tribal nation leaders about what their needs are. One of the things that we have been doing in addition to deploying the historic levels of funds that it has given us to help on the Community Development is really working with tribes on how they are able to use that money swiftly. In addition to that we created a new Advisory Committee and the department for tribal leaders and of the two meetings. Above another one shortly. There we have consistently looked to be leaders to tell us what we can be doing better in respect of the government to government relationships. Those conversations continue, and i have been working personally with some of the leaders on ways they can cut some of it to make sure that we are helping them deliver. Thank you for your work on these issues. Thank you. Thank you both for being here. Last year they directed them to make changes to the loan level pricing adjustment. You have said these were intended to allow them to further build capital and reduce taxpayer risk. Im trying to get my head around this. These changes functionally reduce aspects of the relationship. They seem to be providing a decrease in rates applied to higher risk persons and increasing it to lower risk persons. Did i get that right . Thank you for the opportunity to clarify the misunderstanding that permeated all of asked her about some of the pricing changes that they undertook. We have been working diligently to ensure fannie and freddie are doing what they can to fulfill their mission and making sure they are fulfilling their mission in terms of facilitating loans to underserved communities. We eliminated the price adjustment for the upfront fee for all borrowers across the country for those that had median incomes of 100 or less. I can assure you that all of the changes we made do not result in borrowers with high scores of subsidizing borrowers. We continue to have riskbased pricing. What happened in the discussion is when you have a loan to value that is 80 or higher you have to purchase credit enhancement usually in the form of mortgage insurance. We do not add that into the calculation, but it is still riskbased pricing at the end of the day, and i can assure you that riskbased pricing is as it fannie and freddie and there are provisions to make sure that lower income borrowers in borrowers and Rural Communities across the country do not have to pay upfront fees. This can be a very complicated discussion. Hard to simplify it into five minutes, but i will submit this for the record and then have you get your commitment to respond back to a very specific set of questions we will ask from this because the thing im still trying to get my head around. Is a part of this decision was used as a basis for raising capital where is it coming from . The chart that you have reflects a number of changes the enterprises undertook to be increased prices on super jumbo loans that were over that. Is one of the first changes we made. We also increased prices. Wardrobe that decision . Some of the counties were well over seven digits. That is what. There is a private market that exists to purchase those, so to the extent they are purchasing those loans people need to be able to pay the additional fees for those loans. The other thing we did are you saying the policies that have been implemented in your opinion and the fees associated with them were driven by decisions in every case . Absolutely. Also looking at Capital Requirements for every single loan that we purchased. We also raised fees for vacation homes. The reduction and fees for people with higher risk rating was because they were being overcharged of the time . They were because we were not capturing the mortgage insurance that they have to pay as mandatory, so when you have that chart im going to draw a line for the loans that are 80 and above. Im going to add fees for those. I have a long series of questions. I am happy to respond. I will say that we did reach out to try to get a consultation to see if you are in position of this was in violation. Should have been subject to rulemaking. We found out because we were going to try to force that issue. Apparently you are given latitude and conservatorship model. And a conservatorship you are operating within now, but it is beginning to make me wonder whether or not we should more tailor what authorities you have within your role as conservator versus some of these policy decisions, but thank you for being here. I will submit some questions for the record. In 1932 congress created the Federal Home Loan Bank system to tackle the biggest housing crisis of the last century. The great depression. The basic idea was simple. The federal government offered help informed of a guarantee and favorable regulatory treatment and special tax status. And return they would provide liquidity to their members to support housing and Community Development. Today we are in the middle of another housing crisis by some estimates we are short 7 million Housing Units nationwide, but in this critical moment they are missing in action on Affordable Housing mission. Last month the Congressional Budget Office released a report that for the first time put a number on how much they receive in public subsidies. In fiscal year 2024 that was 7. 3 billion. And 2023 how much of these public subsidies did the fhlb spend on Affordable Housing programs . I think it was approximately 390 million. I think 350. Okay. 390 million. That the vast majority of the subsidies the federal government poured into it went somewhere other than to Affordable Housing. Only a tiny fraction went Affordable Housing, so where did the taxpayer money go . In that same year how much did the fhlb spend on dividends for their members like banks and Insurance Companies . The proximally 3. 4 billion. Just so we are clear here. They spent 8. 5 times as much on dividends to their members than they did on Affordable Housing. I think that is right. Just the math here. Not all of those federal dollars in taxpayer dollars went to dividends. There is still money left over. According to them the fhlbs left tens of billions of dollars to prop up Silicon Valley bank, signature bank, and First Republic bank before they failed. Is the primary regulator for the fhlbs. You agree that its important for them to clarify that the mission of the fhlbs is to provide liquidity for housing and Community Development . Not simply to prop up the failing banks and and out dividends. Absolutely. Thank you for the question. We conducted a yearlong review of the bank system. We conducted 17 listening sessions around the country and heard exactly that the Home Loan Banks have a dual mission. To provide stability and liquidity to their members. The other is to support the communities that they live in through Affordable Housing development and Community Development. There is a huge affordability issue. Huge supply issues. The Home Loan Banks are well positioned to do a lot more. That is one of our recommendations. I appreciate that. It is not enough if they are taking money and not spending it to accomplish that, so i think clarifying the mission is an important start. I think we also need to take a look at who lines up for these federal subsidies. These government subsidies are to promote housing, but in the last five years 42 of the members did not originate a single mortgage. Not one. 42 . How did this happen . It turns out under the current rules members only need to hold at least 10 of their assets and Residential Mortgage loans at the time they apply to join one. When you are in you are in and you can get out of the Housing Finance business while you take advantage of these government subsidies. Should they change the rules so that members must hold at least 10 of their assets and Residential Mortgages on an ongoing basis in order to remain eligible for financing . The i was one of the recommendations in the report. We will propagate rulemaking sometime this year to talk about number ship to define what the role is of membership, and to also ask questions about what that threshold should be because he will have a situation like one of the three Bank Failures where you start out with the 10 to meet the requirement and then the banks Business Model changes, and there is no ongoing checks for them to access the system. That is rulemaking and will be very transparent and we are looking forward to engaging in that. I strongly urge to issue its proposed rule makings to address their mission and membership as soon as possible. They should be tackling our Nations Housing crisis and not rolling out corporate welfare to these giant banks and to members that are not even in the housing business. Thank you. Thank you to the witnesses for being with us today. I want to direct my questions to director thompson. One of the biases i have and i think hopefully it is shared by everybody who serves in this body is that we should not be discriminating based on race be we should treat people based on their individual characteristics and not go out government benefits or favors or consequences because people have the wrong skin color. I assume that you share that conviction as well. I want to point directly to a particular policy of your directorship. The announcement followed by an august proposed rule requiring fannie and freddie to advance equity and Housing Finance. In particular the way they have applied this worries me. As i understand it its targeted at black and brown americans that explicitly is targeted to them. I do not think we should be to let out housing favors based on skin color. Im curious. Am i right about that . Does the fannie mae plan specifically target them, and does that program has any income requirements . Thank you for the question. I want to assure you that everything that they do complies with the law. We have under the Fair Housing Act the responsibility to ensure that there is fair Housing Access for everyone. When you talk about the affordability issue, which is the Biggest Issue we have today. It did not miss any communities. Their particular communities that are underserved in their huge housing gaps. We have asked fannie and freddie to come up with plans not just for underserved communities and you are specifically talking about those plans, but for all communities. Tribal communities. Native american communities. Because we want to make sure that no one is left behind. We cannot let the Housing Market fail, and there is no onesize fitsall. I would say that many of the barriers that have been identified in some of the plans especially in the fannie and freddie plans for black and brown borrowers applied to other cultures as well. It applies across our nation. I will give you an example be one of the things that came. Just to specify this a little bit. There is a down payment assistance slush fund they have applied as a part of this particular equitable Housing Finance plan. My understanding is that black and brown americans are eligible for this down payment assistance but its not income based. Our programs are not racebased. The programs that are in the specialpurpose credit programs is what i think you are referring to. They are locationbased. Those of the programs they offer. They do purchase loans from other institutions. This actually makes me feel good if i misunderstanding this. There is not a fannie mae down payment Assistance Program you can only apply for if you are black or brown . Speak their down payment Assistance Programs that apply to many fannie mae programs. Home ready program. Is the one that discriminate based on race . No. For the enterprise based special programs you can apply for those if you live in a certain area. It is locationbased. Not racebased. Is an income requirement . I am not sure if i would have to get back to you. The thing that i find somewhat troubling about this stuff is i certainly agree there are a lot of black and brown americans have been left behind by the Housing Market be we want to guarantee access for everybody. You can accomplish these things very often by targeting a particular income category. You are going to catch up a lot of black and brown americans and also catch up a lot of americans from other racial categories who may be do not have high income. It strikes me as a better way and also in much less illegal way to do Housing Assistance in our country and targeting a particular racial group is not something i think we should be doing. First i want to say we are not doing anything illegal. That is good to hear. We would not do that, but we think that these programs should be available for everyone. We have programs based on income be we have had them for years. We do have these programs that are based on location that they are doing. Thank you. A couple of questions for both of you related to how we can use programs under each of your jurisdictions to help families reduce their energy cost. Whether they are homeowners or whether they are renters. Let me begin with you, acting secretary. I know that last year you undertook a review. I think of the Building Codes. A review that is required under the Energy Independence and security act of 2007. I understand both from a department of Energy Analysis and also from huds on preliminary determination i think that was also made by the department of agriculture. That updating the Building Energy code is a net positive for households. That they say that the monthly cost savings on energy bills are greater than the relatively small upfront cost of building to the latest code. That caused of course is spread over the 30 year mortgage. As i understand it it showed the cost savings are about 500 per year, which is real money. Particularly for a low income household that when i was spending too much of their paycheck on energy costs. In my state of maryland this would boost resilience and efficiency and for new homes, and the average new home would deliver a net savings of over 5000 for a maryland family over a 30 year mortgage. Could you tell me where hud stands right now and finalizing this coded determination . It has been a wild since i think that was made, so what is your plan and timetable for finalizing this . Hud did certainly take a look at this along with our colleagues at usda. We did put a proposed rule out. I think you are referring to some of the elements of that. The rule is self is still in process back at hud, but you will be hearing some more very soon about the release of a final rule. Something you can look forward to. I think what we have tried to do very carefully is look at the pressing needs around Energy Efficiency as you articulated in the longterm savings to homeowners and renters. Also looking at its intersection with affordability. One of the things were going to be relying on is just recently the administration announced some of epas funding on Greenhouse Gas emissions. The reduction fund. We will be leaning in. I know local localities will be leaning in on some of those funds to make sure youre carrying out the work that we all value. Thank you for mentioning the epas recent announcement. Something i worked on over a decade. I was glad to see you finally come to fruition. I think that can be an important complement to the other efforts. Director thompson the, obviously fhfa has a role to play here. The enterprises have long been proponents in terms of the public component of your secondary mortgages, so could you talk about your plans to adopt similar building standards that would also in fact have an even greater impact in terms of the number of homeowners and renters would be able to save on their energy costs. Sure. They have long been proponents of providing Energy Efficiency, so they do give credit for builders buildings that have those efficiencies already built in. Under undertaking an analysis ran out to look at the Building Code issue. Enterprises are working with stakeholders through their own analysis to provide research. We are also looking at their analysis as well, so this is a priority for us, and we should probably have some recommendations coming forward on what we are going to do in probably by the end of the second quarter. I think the work they have done probably provided a good model so you do not have to reinvent the wheel when it comes to the standards. Im going to submit a couple of questions for the record. One for each of you. I appreciate if you could get back to me as soon as possible. Thank you both for being here today. It is clear the country is facing an Affordable Housing crisis. High Interest Rates and inflation the soaring Construction Costs and low inventory have put homeownership further and further out of reach for hardworking americans. This crisis in my opinion has only been intensified by bidenomics. This over the safety and soundness of our Housing Market and our economy peaked a regulatory cost to make up nearly 24 of a new homes price. Homelessness hit an alltime high in 2023 despite hud receiving record funding specifically to address this very issue. Not only is homeownership more out of reach but not a single state in the country even has an adequate supply of affordable rental housing for low income families. I could go on. There are real problems facing real people, and we have to focus on Real Solutions. Unfortunately what we have seen from this administration is fast tracking and politicizing regulatory actions that actually risk putting the economy at greater risk. On that. In a hearing last may you said you were committed to making sure that pilots are public and that people know there is more transparency going on. My question for you. Is there a reason that your agency changed paths so to speak and did not go through the Public Notice or Comment Period before issuing the recent Pilot Program . Thank you for the question. I would first like to say that safety and soundness grounds everything that we do the we do not compromise safety and soundness. I am a longtime regulator. Just want to make sure that is the foundational understanding. With regard to the title pilot. We received the pilot from fannie mae, and is this just in time for the state of the union or before that . We went through our normal process, and they went through analysis. We did not do anything different or anything wrong. Are you going to consider actually allowing the public sometime to comment on that . The pilot has not been operationalized yet. We are still in the process of searching for a vendor to help dig ties and try to figure out how they can access the title records. Fannie mae will issue a solicitation to multiple vendors. Make sure were talking about the same thing. The risk refinances. You finalized your agency and rule. Sure theres a public comt period and we have the opportunity to weigh in. I want to shift my focus. Thank you for being here today. I understood you have been in the housing space and you were included in the moving to work program but obviously when the pandemic hit, we decided, or had decided to postpone that program. Would you agree committed to engaging now that the pandemic is over to help people not only get on their feet about have an opportunity to actually succeed . Senator, you will be happy to hear that we have been working quickly and urgently to carry out congress their feet, but have an opportunity to actually succeed . Senator, you will be happy to hear that we have been working quickly and urgently to carry out congress mandate to expand the agencies. Excellent. We completed that task two weeks ago. Good. I believe if youre an able bodied, working age american without dependence, working, training, volunteering, to receive government benefits, there is a dignity that goes along with that. In my last few seconds, just wanted to briefly underscore the magnitude of debt funded multifamily loans that will be need to be refinanced over the next couple of years, but cant at the current interest rate. So, i would just like to work with you and urge you, both, to revisit the Enterprise Capital framework and its lack of countercyclical adjustments for multiple family. My staff will follow up with you, but i look forward to working with you, both. Thank you. Senator warnock from georgia is recognized. Thank you so much, chair brown. According to the atlanta journalconstitution, jerk are just a handful of private equity firms, that individually owned more than 10,000 Single Family homes around atlanta, and in this time of elevated rates and in the middle of a housing crisis, large Institutional Investors and wall street private equity firms from outside are effectively boxing first time, first generation whom buyers out of the market by gobbling up the available Housing Stock in atlanta. This is particularly egregious, when you think about the role that wall street played in what we saw just a few years ago with the crash. This is also why i previously introduced the Housing Market Transparency Act legislation, that would provide greater ld transparency over who actually owns properties built under the low Income Housing text tax credit, which includes significant private equity investors. I want to ask the honorable sandra thompson, asking secretary, thank you for all of the work that you do, making homeownership more affordable for americans, but i am troubled by the increase in private Equity Ownership in the market. What steps is your agency taking to make sure that fannie mae and freddie mac are not passing economic benefits that lend americans over to private equity firms . Thank you for the question. Fannie mae and freddie mac do not engage in Institutional Investors for singlefamily rentals, and the agency had one transaction in 2018, and decided to not engage in those activities anymore. So, we do notpermit Institutional Investors to come forward for acquisition. I would say, though, that there is a number of investors these are more mom and pop as opposed to Institutional Investors. Like, fannie mae has a requirement that one person can have 10 property, like one individual. And freddie mac, one person can have six. But those, again, are more local mom and pop. They are not from this increase in private Equity Ownership in the market at large . Fannie and freddie wont purchase those loans because they are ineligible to make those loans. So, one of the things that we do with our reo portfolio is we have a 30 day first look period, where investors are not able the house goes on the market, and you have to be on or occupied, or a community B Development investment front or a nonprofit to purchase, first. You got 30 days before the house goes on the market. So, those are some of the things we have done. My larger concern, obviously, is to ensure that ordinary, hardworking americans families in georgia and all across our country have access to the American Dream and this is what allows for generational wealth. So, as home prices have increased, the ability for Many Americans to purchase Affordable Homes has moved out of reach. This is particularly true for first time, firstgeneration homebuyers. On top of this, we see a racial homeownership gap, that actually widened in 2023. Only 44 of black americans own a home, a total that is almost 29 Percentage Points lower than white americans. Acting secretary todman, under President Biden, federal housing agencies have been committed to providing resources for new homebuyers. I was glad to see the president call on congress to pass a 10,000 tax credit for first time homebuyers. Can you detail why this home credit is important, and who is it targeting . Senator, thank you for that question. I think you have provided the facts very clearly, in terms of who will be most assisted by this type of investment, in firsttime homeowners. I will take it to the next level, firstgeneration homeownership,um which was part of the president s proposal in his 2025 budget proposal. You know, this is critical. We know that homeownership remains the number one way that the middle class is able to generate and sustain generational wealth. And as you so well said, only about 44 of black americans have access to that generational wealth. And so, we know that by providing concepts like first generation down payment, we know what that means in the long term. We know that having a tax credit that allows those families who are locked out of homeownership to know what it means to sort of have access to that type of subsidy, to write out some of the up front costs. U but, also to know that we need to do more as a country and we are doing more as an administration to make sure that there are homes to purchase, to make sure we can increase the supply of starter homes. So, we are looking at this from a fourth full 360 and look forward to sharing more with you and your team. Thank you. That is exactly the work that my down payment on equity act is focused on, helping these firstgeneration homebuyers support them with Closing Costs, et cetera. Thank you for your work on this. I look forward to working with the chair and the committee to get legislation signed. Thank you, senator warnock. On my conversation yesterday, day before yesterday, whenever we talked with the acting secretary, we spoke about that bill. I will work on it in house. Secretary fudge, especially, as we talked, that was such a high priority for her. If we are ever going to end the wealth gap in this country, surely the best tool is homeownership, and whatever this legislation can do. Senator mastro from nevada is recognized. Thank you, to both of you. I want to say thank you to both you and your staff for all of the great work in partnership you have done in nevada around Affordable Housing. Thank you. I know you are there, i have talked with both of you. Your staff is in incredible, they are on the ground, so thank you. Let me start, director thompson, with you. I also have to thank you and your staff for your review of the federal home loan system. This is something i think you and i talked about it from the very beginning and the challenges i felt we need to address, particularly around the core mission of federal home bangs, which is housing and Community Development. So, you did an analysis. Many of the changes and recommendations in your report are recommendations or actions that the agency can take on its own. But, there is also recommendations for congress, so i want to talk to you a little bit about those. Can you tell us why the federal financial Housing Agency recommends that congress improve access to the federal home Banking System for non depository Community Development institutions, or see the fis . Sure, thank you for the question. We spent a lot of time on the Home Loan Bank review, and we got a wealth of information and as you mentioned, some of our recommendations are statutory, and some, we can do on our own. What we found in our discussions is that cdfis play s an Important Role in local communities. They communicate with all housing stakeholders in a way that is just so unique and helpful and it produces results. Especially in underserved and low to moderate income areas, and we wanted them to have the same benefits that other members have, because other members are able to commit collateral, especially if they have i think if the limit is a Small Community institution, they can pledge karate role, but the cdfis are not able to pledge the same type of collateral. So, we wanted to make sure there was parity because we were talking about small institutions and small members. We want to make sure there is parity throughout the membership. So, one of our regulatory asks is to make sure that cdfis have the same benefits as other small institutions, Like Community banks, so they can continue to build and provide Affordable Housing in their communities. Thank you. We know for decades the fhl bank set aside was 3 of their revenue, 10 for the Affordable Housing program, and 20 to pay the bailout. Those payments never threatened stability of the system. Why does fhfa recommend that the assessment for the Affordable Housing program be increased by at least 20 . Thank you again for that question. For the very reasons you mentioned. Right now, the Home Loan Banks are setting aside 20 in earnings which counts toward capital, but they are all capitalized and they can well afford to provide at least another 10 to help with this housing crisis that we are having throughout this country. They are in 11 districts throughout the country, they are serving all of the states and counties in the United States, and they could do a better job in providing housing, development, and Affordable Housing and Community Development. I would say, though, that they are starting to increase their contributions, but it would be very helpful to have a statutory contribution, the statutory retirement increased from 10 to 20 . We both know this, the fhl banks are in 6. 6 billion last year, and we have said this already. And like fannie and freddie, the Federal Home Loan Banks do not pay any taxes. I would ask my colleagues to join me on legislation that addresses some of the recommendations you just talked about, that are so essential to bringing more dollars into our communities for Affordable Housing. I only have about 40 seconds left. Let me, asking acting secretary, ask you this. Can you ask about the rule to streamline the home investment Ownership Program . It is still in the interagency process. I am happy to say that we are doing it, one. I think it is a Long Time Coming to modernize this program that e is the largest Grant Program the federal government has that has low and moderate income homes and homeownership opportunities. We are almost there, across the finish line, and getting the rule out for comments. We look forward to working with you and your office on how we did. And we thank you. I know your staff has been great working with us on the bill, the home Investment Partnerships reauthorization improvement act that i introduced. It was part of the subcommittee hearing that said under smith was just talking about. There was a conversation, how important this program, the home program is to building Affordable Housing communities throughout the community, so thank you for your work. Thank you, senator cortez masto. Youre almost done, i think no one else is coming. I have a series of questions, and sometimes waiting until last, i can get a better overview of the committee, and the questions, and what we want to talk about. So, starting with secretary thompson, you and i talked about the hud assist propertiess in toledo, ohio, and northwest ohio that the city cited for deplorable conditions, Ashland Manor and Covenant House. I demanded that hud work with toledo officials to fix the situation. Hud has been working with the city of toledo. Will you commit, in front of this committee publicly, to continue to work with the city to see the job through to fix the conditions at Ashland Manor and Covenant House and to hold the landlords accountable . Absolutely, and i made that commitment to the mayor of toledo, as well, myself. Good. I will be holding you to that. , it never should have got into the situation. No one should have to live that way. I want to followup with you on what hud is doing to better an identify poor conditions and irresponsible owners, before they hurt residents and communities as they did in toledo. Count on that. Director thompson, turning to manufactured housing, i have heard from ohio seniors who live in communities financed by freddie and fannie who are forced to go to extreme lengths to keep up with the rising rents and fees that outof state investors are charging. We are seeing more and more out ofstate investors. As you and i have talked about in the past, in manufactured housing. How do we change the system so that when fannie and freddie are getting credit for Affordable Housing, residents can actually afford their rent and arent forced to choose between keeping their homes and buying food and medicine . Thank you for your question, senator. We really are working with the duty to serve program, because we believe there ought to be a penalty, that fannie and freddie should not get credit for the situations and circumstances where the homeowners are not getting updated property maintenance, or they are living in conditions that are just untenable. So, we are thinking about ways to address those issues. As you know, for manufactured housing communities, there is a set of tenant protections that are required for anyone who gets a loan who has a loan from fannie or freddie on a manufactured housing community. We also have them sign compliance agreements every t year, to make sure that they are complying with the tenant protections that are in place. In addition, both fannie and freddie are getting ready to establish Asset Management oversight, so that they can make sure that these properties are in good condition, and that people are living in safety and in Affordable Housing. There was a lag during the pandemic, where inspections were not taking place, and we really have a lot of catch up to do. I want to make sure we are doing our part to make sure that americans across this country, especially in manufactured housing communities, are able to live with dignity and respect and in conditions that are safe and decent. Thank you. Back to you, secretary todman. We have neighborhoods in cleveland, in fact in the z. I. P. Code where i live in cleveland, where my wife and i live, in zip code. They have the highest amount of foreclosures of any z. I. P. Code in america. In neighborhoods in cleveland throughout ohio, too many children are still poisoned by lead, you know that. Through efforts like lead Safe Cleveland Coalition ohio, we are working to make progress to protect kids. Your testimony poses improvements to huds Healthy Homes program. I want to followup with you on how this proposal will support efforts like these to prevent lead poisoning. We will be back with you about that. Very good. Thank you, director thompson. After the 2008 crisis, fannie and freddie briefly provided financing to help buyers buy up singlefamily homes, and some of that is still benefiting a Company Called pinebrook, which owns thousands of homes in ohio and has a track record of running properties into the ground, evicting families, driving up local Family Housing prices, and particularly a problem in cincinnati. I visited some of those houses and neighborhoods. Will you commit today, director, that fannie and freddie want to do any investing for investors who so often exploit tenants and drive up housing prices . Senator, thank you for bringing that to my attention. After the experiment or pilot that fannie and freddie did in 2018, we have prohibited them with working with Institutional Investors, but we will follow up and make sure that doesnt happen, but we will follow up on that particular property. And i will continue to watch that, and you know we are watching that and i appreciate the Public Service of both of you, but that kind of predatory Business Model needs to be rejected, always, by anything, any influence the government can have. So, thank you. Thank you to the two Witnesses Today for your patience. Thank you for your testimony. Thank you most especially for your Public Service. Senators who submit questions, they are due one week from today on april 5th. To the witnesses, you have 45 days to respond. Thank you, again, for that. The hearing is adjourned. [inaudible conversations] since 1979, in partnership with the cable district, cspan has provided complete coverage of the halls of congress, from the house and senate floors, to congressional hearings, party briefings, and committee meetings. Cspan gives you a front row seat to how issues are debated and decided, with no commentary, no interruptions, and completely unfiltered. Cspan, your unfiltered view of government. 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