With action on housing finance reform gaining momentum, NMHC Chairman Daryl Carter, founder, chairman and CEO of Avanath Capital Management, LLC, in Irvine, Calif., was in Washington for two days of high-level meetings with members of Congress on Capitol Hill and key officials at the Department of Treasury to discuss proposals put forward in the Senate and House.
Carter and NMHC staff met with Ranking Member Maxine Waters, D- Calif., of the House Committee on Financial Services who just announced her much anticipated “Housing Opportunities Move the Economy (HOME) Forward Act”. The Waters’ proposal builds on draft legislation released earlier this month by Senate Banking Committee Chairman Tim Johnson, D-S.D., and Committee Ranking Member Mike Crapo, R-Idaho, that would replace Fannie and Freddie with a new standardized platform-based mortgage finance system backstopped by the Federal Government.
In addition to meeting with Waters, NMHC/NAA discussed issues specific to multifamily in the Johnson-Crapo bill with Senators Sherrod Brown, D-Ohio, Jeff Merkley, D-Ore., Jack Reed, D-R.I., and Charles Schumer, D-N.Y. Carter’s message to these lawmakers was that we appreciate that the bill maintains much of the current multifamily structure. He also emphasized that we would like to work closely with them as they fine tune items such as the ten percent capital requirement and affordability issues. (Photos)
Importantly, the Senate Finance Committee has scheduled a markup of the Crapo-Johnson bill on April 29 in a likely effort to pass the measure out of Committee this spring to help keep housing finance reform on track. If significant progress does not take place in the coming weeks, reform could be placed on hold until after the November elections.
While similar to the Johnson-Crapo proposal, Waters’ discussion draft differs from the Senate proposal in that the HOME Forward Act specifies the Mortgage Securities Cooperative platform be mutually owned by participating lenders, including a separate multifamily securities platform. Although we are encouraged by the proposal’s separate title to address the financing needs of the multifamily industry, we have concerns about a single-cooperative platform being mutually owned by participating lenders - concerns that were raised directly with Waters.
Specifically, Carter outlined that we want to better understand the impacts on the amount of government credit in the multifamily market because the approach may result in fewer lenders and dominance by a handful of large firms. This could, ultimately, weaken access to capital, increase lending costs, and lead to reductions in the rental housing supply and needed development to meet rental-housing demand.
NMHC/NAA look forward to continued dialogue on this and other issues in order to find a legislative approach that will maintain efficient, effective debt capital liquidity for the multifamily industry.
Date Posted: March 28, 2014
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