Biden administration sets goal of adding 100,000 affordable housing units
WASHINGTON – The Biden administration on Wednesday announced several government efforts to increase the supply of affordable housing.
The White House said the goal of the new initiatives is to make 100,000 new units available to owners and tenants over the next three years. Steps include more funding for manufactured homes and two to four unit properties, as well as working with state and local governments to reform obscure zoning restrictions.
The administration also said that nonprofits and individuals will have preference over investors to acquire foreclosed properties that had been insured by the Federal Housing Administration.
President Biden is committed to using every tool available in government to produce a supply of more affordable housing as quickly as possible and to make the supply available to families in need of affordable housing and quality – rather than big investors, âthe White House said in a press release.
As per the administration’s announcement, the Federal Housing Finance Agency said that from now on, Fannie Mae and Freddie Mac will each be allowed to invest up to $ 850 million per year in the housing market. low income housing tax credit as equity investors. Previously, government-funded companies were limited to investing $ 500 million each.
The FHFA also said it would lengthen the “first look period” which gives some parties an advantage in purchasing foreclosed properties backed by Fannie and Freddie. The period during which occupants, public entities and associations can purchase real estate will be extended from 20 to 30 days. After this period, these properties are available to investors for purchase. The FHA will also extend its period of first sight to 30 days.
âExtending the time homeowners have to bid on a REO property, without competition, is especially important for the preservation of the neighborhood when the supply of homes for sale is severely limited,â said Sandra Thompson, Acting Director of the FHFA, in a press release. .
The Department of Housing and Urban Development will also launch efforts to expand its reach to nonprofits and local governments to âeducate them moreâ about the real estate property bidding process.
As part of the Biden administration’s efforts, the Treasury Department will also issue a “Funding Availability Notice” for the Capital Magnet Fund, a program funded by contributions from Fannie and Freddie that makes grants available to organizations. non-profit and community development financial institutions to facilitate the production of affordable housing.
This Treasury notice will also include “changes to strongly encourage the production of affordable housing,” the White House said.
The Treasury will also re-launch the partnership between its federal financing bank and HUD’s risk-sharing program, which was suspended in 2019. The partnership will allow state housing finance agencies to offer low-cost capital. for the production of affordable housing, said the White House.
The administration has also announced several strategies to tackle exclusionary zoning, which many stakeholders have long argued is the main barrier to building affordable housing. As part of this effort, the FHFA is preparing a report on the concentration of Fannie and Freddie’s mortgage purchases in areas subject to exclusion zoning policies. This study will also provide data on the demographics of borrowers whose loans are backed by GSEs.
HUD is also creating a âHousing Supply Toolkitâ that will offer strategies for successfully deploying grants to address housing affordability challenges.
âGoing forward, the HUD and the Biden-Harris administration will continue to pursue bold actions to create and preserve affordable housing for all Americans,â HUD Secretary Marcia Fudge said in a statement.
Additionally, the Biden administration said it would organize “peer learning and listening sessions” in conjunction with HUD and FHFA to “enable the exchange of best practices” on zoning reform to tackle the problems of housing supply and affordability.
âThe sessions will also identify remaining implementation barriers, which the President’s Build Back Better agenda and potentially federal administrative action can help overcome,â the White House said.