Agenda Summary2007 Federal Housing Policy Committee National Association of REALTORS® Midyear Legislative Meetings & Trade Expo Marriott Wardman Park Delaware Suite, Lobby Level Wednesday, May 16, 2007 10:00 AM - 12:00 PMChair:Conchita Sulli (LA) Vice Chair:Lois Kilibrew (TN) Committee Liaison:Gary Thomas Committee Executive:Megan Booth, Ken TrepetaI. Call To Order NAR OwnershipDisclosure and conflict of Interest Policy 1. When NAR has an ownership interest in an entity and a member has an ownership interest* in that same entity, such member must disclose the existence of his or her ownership interest prior to speaking to a decision making body on any matter involving that entity.
2. If a member has personal knowledge that NAR is considering doing business with an entity in which a member has any financial interest**, or with an entity in which the member serves in a decision-making capacity*, or wit, then such member must disclose the existence of his or her financial interest or decision making role prior to speaking to a decision making body about the entity.
3. If a memberhas a financial interest in, or serves in a decision-making capacity for, any entity that the member knows is offering competing products and services as those offered by NAR, then such member must disclose the existence of his or her financial interestor decision-making role prior to speaking to a decision making body about an issue involving those competing products and services.
After making the necessary disclosure, a member may participate in the discussion and vote on the matter unlessthat member has a conflict of interest as defined below.
Conflict of Interest Policy
A member of any of NAR’s decision making bodies will be considered to have a conflict of interest whenever that member:
1. Is a principal, partner or corporate officer of a business providing products or services to NAR or in a business being considered as a provider of products or services (“Business:); or
2. Holds a seat on the board of directors of the Business unless the person’s only relationship to the Business is service on such board of directors as NAR’s representative; or
3. Holds an ownership interest of more than 1 percent of the Business.
Members with a conflict of interest must immediately disclose their interest at the outset of any discussions by a decision making body pertaining to the Business or any of its products or services. Such members may not participate in the discussion relating to that Business other thanto respond to questions asked of them by other members of the body. Furthermore, no member with a conflict of interest may vote on any matter in which the member has a conflict of interest, including votes to block or alter the actions of the body in order to benefit the Business in which they have an interest. ________________________________________ *Ownership interest is defined as the cumulative holdings of the member, the member’s spouse, children, siblings and to any trust, corporation or partnership in which any of the foregoing individuals is an officer or director, or owns, in the aggregate, at least 50% of the (a) beneficial interest (if a trust), (b) stock (if a corporation) or (c) partnership interests (if a partnership).
**Financial interest means any interest involving money, investments, credit or contractual rights.
II. Approval of 2006 Convention Meeting MinutesIII. Guest Speakers A.Keith Pedigo, Department of Veterans Affairs (Bio) B.Brian Cooney, Manufactured Housing Institute (Bio) C.Thayer Long, Modular Housing Council (Bio ) IV. Issues Discussion
A. Manufactured Housing Task Force Report/Recommendations.The Manufactured Housing Task Force will be reporting its recommendations to the Committee. The final report is not yet available; however, issues the Task Force has been discussing include:
The reform of FHA Title 1 (for land lease properties),
Possibly increasing the loan limits for Title 1,
Improving GSE financing of modular andmanufactured homes, and
Reviewing regulation of the Rural Housing Service requirement that the resale of manufactured housing have a Rural Development guarantee.
V. Legislative/Regulatory Updates and Pending Business
A. Status ofFederal Housing Administration (FHA) Modernization.Despite the successes of the FHA program, too many potential homeowners in underserved populations continue to be left out from the American dream ofowning a home. FHA’s market share has dwindled because its loan limits, inflexible downpayment requirement, and fee structure have not kept pace with the current mortgage marketplace. If FHA had been a viable mortgage alternative, many homebuyers would not have explored non-traditional mortgages, many of which are very risky.The FHA single-family mortgage program has played an important and vital role in the mortgage marketplace. The FHA program has a public purpose obligation to provide mortgage insurance to American families who choose FHA to meet their homeownership needs. Reforming FHA will make it a more viable product for homebuyers and expand the pool of available safe and affordable loan products.C.A.R. and NAR arestrong supporters of the single- and multi-family programs administered by the Federal Housing Administration (FHA). However, FHA’s market share has diminished considerably threatening its ability to serve its public purposes. REALTORS® is working with the Department of Housing and Urban Development (HUD) to modernize FHA to enhance its effectiveness in today’s mortgage marketplace.
Representatives Maxine Waters (D-CA) and Barney Frank (D-MA) introduced a bill (H.R. 1852), thatwould 1) increase the FHA loan limits nationwide and in high cost areas; 2) eliminate the 3% downpayment requirement on FHA loans for first time homebuyers; 3) extend the loan term to 40 years; 4) allow FHA to risk-based price their products; 5) eliminate the cap on the number of reverse mortgages that FHA can insure; and 6) streamline usage of the FHA condominium loan program. It would also allow excess FHA funds to be put into an affordable housing fund, rather than go to the US Treasury.
Onthe same day, Representatives Judy Biggert (R-IL) and Spencer Bachus (R-AL) introduced a bill (H.R. 1752) identical to the one that passed the House last year by a vote of 415-7. It has higher caps on mortgage premiums FHA can charge borrowers, does notlimit no/low downpayment loans to first time homebuyers, and does not include an affordable housing fund provision.
In April, REALTOR® Iona Harrison of Upper Marlboro, MD represented NAR at a hearing before the House Financial Services Housing Subcommittee on H.R. 1852. Ms. Harrison testified on the urgent need for FHA reform to provide a safe, affordable financing alternative for homebuyers.A markup in the House Financial Services Committee is scheduled for May 2, 2007, and the Committee Chairman believes the bill will be on the Floor of the House in early June.
There is not yet a companion bill in the Senate, but the Senate Appropriations Subcommittee on Housing held a hearing on solvency and reform proposal for FHA in March. JoAnne Poole, a REALTOR® from Glen Burnie, MD testified on behalf of NAR. Her testimony focused on the point that had FHA been reformed, many subprime borrowers would have had an alternative to the non-traditional loans they now hold.
a. Affordable Housing Fund.Congressman Barney Frank (D-MA) has included a provision in H.R. 1852 that would designate some FHA profits for an affordable housing fund. Many Republicans are opposed to this provision and it has become an extremely controversial issue that might present a stumbling block to passing FHA Reform. Frank has expressed a willingness to reword the provision to squelch Republican concerns, though what the final “fix” will look like is still unclear. B.NAR proposal for FHA refinancing. (NAR Letter to Secretary Jackson)C. Political Perspectives, Sam Whitfield, NAR Lobbyist
D. VA Loan Limits.Congressman Bob Filner (D-CA) has been working with NAR to craft legislation that would increase the VA loan limitin high-cost areas. VA’s loan limit was recently tied to the GSE conforming loan limit, so VA will guarantee a loan up to 25% of the conforming loan limit of $417,000. REALTORS® are hopeful that the Congressman will introduce a bill that will increase the VA loan limit to an area’s median home price if it is above the national conforming loan limit; capped at 150% of the national conforming loan limit. E. HUD Manufactured Housing Legislation Update
F. FHA Appraisal Bill (Appraisal Committee cross-jurisdiction.The Fair FHA Appraisal Act of 2007 was introduced on March 27, 2007, by Congressman Charles Wilson (D-OH). The purpose of the legislation is to increase the penalty for any attempted coercion of an appraisal for an FHA insured mortgage for a family residence. Additionally, the legislation would require appraisers to be selected on a rotating basis from a list of appraisers developed by the Secretary. The legislation has been referred to the House Committee on Financial Services.
VI. Informational Items
A. Real Estate Settlement Procedures Act (RESPA) Update(Business Issues Committee Jurisdiction). RESPA Realities Flyer
B.FHA Multifamily Housing Legislation and Regulatory Update. (Commercial Issues Committee Jurisdiction).FHA's multifamily loan programs provide insurance that assists both the private and public sectors to finance the construction, purchase and rehabilitation, or the refinancing of rental housing projects, condominiums, and cooperatives. In many areas the loan limitsare simply too low for the program to be utilized.NAR and its affiliate, The Institute of Real Estate Management (IREM), is involved in the ownership and management of multifamily properties in recognition that affordable rental housing is the first step on the housing ladder for many Americans.NAR recognizes the need to maintain the viability of federal multi-family housing programs and to increase the availability and affordability of rental housing. NAR encourages the removalof policy and program disincentives that inhibit owner participation in the development of new rental housing or the preservation of existing safe and affordable rental housing.Our nation faces a growing affordable housing crisis for low andmoderate-income families in both the homeownership and rental markets. However, in many communities, construction costs far outstrip the loan limits under these programs. Without these federal mortgage products such as the FHA multifamily insurance program, affordable housing is simply not being produced. With severe shortages of affordable rental housing, especially in high cost communities, increasing the loan limits would enable developers to provide much-needed new affordable housing to low- and moderate-income families.
A provision to increase the multifamily loan limits in high cost areas is included in HR 1852, the FHA Reform bill. The House Financial Services Committee will markup that bill in early May. This provision is included in the bill. That legislation is expected on the floor in June.
C. Housing Counseling (Housing Needs Committee Jurisdiction).
VII. General Information
A. Update: Shopping for a Home MHI, NAHB, NAR Brochure VIII. Other Business
Tentative Date and Time for upcoming meetings:
Tuesday, November 13, 2007 9:00 a.m. to 11:30 a.m. Las Vegas, NV
