HUD Webinar Q&A

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On April 28, Dr. Ben Carson, secretary of Housing and Urban Development, participated in a webinar with NAHB members to discuss HUD's efforts to address the needs of housing market stakeholders – builders, developers, remodelers, homeowners, renters, and home buyers. Sec. Carson was joined by Federal Housing Commissioner Brian Montgomery to address HUD and Federal Housing (FHA) initiatives in response to the economic crisis caused by the novel coronavirus.
 
The two housing policy officials addressed single-family and multifamily mortgage forbearance, rental assistance, and policies designed to support the housing market. They also discussed initiatives at FHA and Ginnie Mae, as well as grant programs, public housing and HUD's broad range of efforts to strengthen the housing industry.

Below are answers to key questions from webinar participants.

Financing Options and Mortgage Forbearance

Through 2015 and 2016, HUD amended its FHA guidelines to make significant changes that have directly affected millenials’ ability to buy a home by adjusting their policies on how student-loan debt is treated on a mortgage application and in evaluating debt-to-income ratios. Can this policy be reversed now to allow more millennials the opportunity to obtain FHA loans?

A key element of FHA’s mission is to increase homeownership opportunities for creditworthy first-time home buyers. FHA constantly monitors the impacts of its policies and makes adjustments as needed to achieve the appropriate balance between meeting the needs of prospective borrowers and minimizing the risk to the taxpayer-backed Mutual Mortgage Insurance Fund (MMIF).

FHA notes that a borrower’s debt-to-income (DTI) ratio is only one factor in determining eligibility for FHA loans and that FHA in general permits a higher DTI than many other programs.

Can we pursue, with HUD’s assistance, the streamline refinance rate reduction program for Government National Mortgage Association (Ginnie Mae) and Federal National Mortgage Association (Fannie Mae) loans?

Unfortunately, we are unable to comment on similar programs from other agencies that would be eligible for GNMA, nor can we comment on FNMA programs.

Information regarding FHA's Single Family Streamline Refinance Program, however, can be found on the HUD website.

What are the checks and balances to make sure that the forbearances and other solutions don't become the next problem?

Following implementation of the CARES Act, FHA provided training on its forbearance policies to over 1,800 participants. That training was recorded and is available on FHA’s website.

In addition, FHA provides ongoing technical assistance to servicers and is adding reporting requirements to closely track the CARES Act forbearance and follow-on loss mitigation options.

Finally, from a quality control standpoint, HUD continues to perform targeted quality assurance reviews to oversee compliance with its policies.

HUD Oversight

Rental Assistance Demonstration (RAD) deals and Section 18 dispositions of HUD properties for affordable housing require community presentations. In light of social distancing, can this requirement be adjusted?

This requirement has been waived in PIH notice 2020-5 at wavier 14.

RAD resident consultation is still required, but the acceptable methods have been adjusted to accommodate social distancing requirements. Please refer to page 27 of the Multifamily Q&A for COVID-19 for more details about the adjustments, and check the Multifamily home page regularly for the most current guidance.

What is HUD's stance on when Real Estate Assessment Center (REAC) inspections would resume, and will the 14-day notification be increased due to post-“shelter in place” workflows?

At this time, we have not determined when REAC inspections will resume. However, we have no intention to lift the 14-day notice once inspections resume.

Having said that, we realize owners and public housing authorities (PHAs) will need time to deal with maintenance that is being currently deferred because of social distancing.

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