1. Federal Housing Funding and Policy Historic Shifts are Underway

2. What Precipitated the Shifts that are Underway Economic Crash 2008-2012 Housing Bubble Bursts – Massive Federal and Private Losses in Housing Federal Budget Trajectory Toxic Politics

3. What’s in Flux? Budget – FY14 – Sequester – CR / Debt Ceiling Tax Reform CRA Fair Housing Mortgage Finance – GSE Reform – Dodd-Frank

4. Federal Budget Trends

8. Vouchers Renewals – FY10-FY13 …but Costs New Vouchers are Rare (HUD-VASH) Few Existing Voucher Holders have lost their Homes…Yet PHAs are Struggling with Admin Cuts (-17%) Very Difficult to serve Populations <50% AMI Homelessness Successes at Risk

9. Vouchers: Virginia PHA Survey 7% avg reduction in voucher funding in 2013 765 housing vouchers expected to be cut across the 9 PHAs / local governments responding 14.5% average reduction in admin fees

10. Project Based Section 8 Project Based Renewals – HUD Strategy to “short fund” Impact on Investor / Lender Confidence RA (rural) – New RA but declining Very Difficult to serve Populations below 50% AMI Homelessness Successes at Risk

11. HOME and CDBG Block Grants more Vulnerable than S/8 HOME (50% cut since FY10) – WAPO story Losses here Ripple through AH GAP Funding Project Infrastructure Rehab Virginia has lost $20m in CDBG (29%) and $18m in HOME since FY10

12. Public Housing PH Capital - $2.5b to $1.77b PH Operating - $4.78 to $4.05 RAD – transition of PH to S8 70,000 unit cap will be met this year Choice Communities 4-5 awards per year

13. Rural Housing 515 Rental Production Slashed 60% RA Cuts less Steep / Renewals at Risk 502 Direct down 20% Administration Favors 538, 502 Guarantee Budget Neutral Politics Counts !

14. Sequester : the Train has left the Station? Budget Control Act of 2011 – $1.2 Trillion in Savings 2013-2021 – FY 13 was 5.1% across the board (defense to take 50% of the cuts) – Delay meant actual cuts to Housing of 7+% – Will continue until 2021 unless changed in a CR or otherwise re-legislated in budget bill

15. CR/ Debt Ceiling: A Train Wreck here / on the Way ? September 30 – CR Sept/Oct – Debt Ceiling Syria has used up a lot of space De-funding Obamacare added to the House CR – sent to Senate Likely Outcome: CR with Sequester?

16. Tax Reform: Possible? The Sky is Falling! …or is it? Baucus / Hatch in Senate @Simpler Taxes Dave Camp in House Complacency is HIGH RISK – 1986

17. Tax Reform: Possible? What is at risk ? LIHTC, NMTC Bill in Oct ? – will not include LIHTCs 2.5 million affordable homes Momentum… 2014 ?

18. Community Reinvestment Act Q & A Revisions Comments deadline in May Recognizes Changes in Banking regarding: – Proximity of Depositors – Proximity of Loan Recipients

19. Community Reinvestment Act What the “local community” means May recognize the value of CD activities outside assessment area Regional/statewide /national investments may meet goals

20. New Fair Housing Guidance Clarity / Simpler Template for Analysis of Impediments Focus on concentrated poverty / “communities of opportunity” Strategies must either move people to COO or Transform into COO What is the Impact?

21. Mortgage Finance Reform What should be the role of the federal government in our national housing finance system?

22. Mortgage Finance Reform GSE Reform: Source of Mortgage Capital Dodd-Frank – Underwriting Guidelines FHA – Meeting LMI housing needs

23. GSE Reform Warner – Corker Wind Down Fannie and Freddie Replace with a Smaller FMIC Common Securitization Platform Competitive System (10 or more guarantors

24. GSE Reform Warner / Corker - S1217 Wind Down Fannie and Freddie Replace with a Smaller FMIC Common Securitization Platform Competitive System (10 or more guarantors

25. GSE Reform Preserve Access to Capital even during Economic Downturns All geographies All housing types SF Mortgages – 30 year / fixed Rental – esp. Smaller, Rural Implications for future Rate Terms Fees

26. GSE Reform - NHTF …the Corporation shall— charge and collect a fee in an amount equal to not less than 5 basis points and not more than 10 basis points for each dollar of the outstanding principal balance of eligible mortgages … and allocate … 80 percent of such fee amounts to the Secretary of Housing and Urban Development to fund the Housing Trust Fund

27. GSE Reform

29. Dodd-Frank: QM & QRM Re- Shaping SF Underwriting Qualified Mortgage “safe harbors” – Eight “factors” – ability to pay – Back end ratio of 43% – Generally balloon loans are discouraged w/exceptions for rural – Credit history

30. Dodd-Frank: QM & QRM Re- Shaping SF Underwriting Qualified Residential Mortgage – Risk Sharing – Down payment – Current rule backs off 20% DP but leaves the door open – Comments until Oct. 30

31. May You Live in Interesting Times 寧為太平犬不做亂世人 Better to be a dog in peaceful times than a man in chaotic times.