TheMReport

TH E M R EP O RT | 55 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT Areas of Concern What do government officials and homebuyers fear most? A Wells Fargo Survey tells all. A report published by Wells Fargo and Gov- erning Institute reveals that if there's one thing that bothers both government officials and potential home- buyers, it's the current lack of affordable homeownership. The report is the result of a survey commissioned by Wells Fargo and carried out by the Govern- ing Institute that seeks to tally and analyze the views of more than 2,000 private citizens, as well as multiple state and local government officials. The report is entitled "Solving the Home Affordability Crisis: A Guide for Policy Makers & Local Govern- ment Leaders" and considers and contrasts the aggregated pools of data before offering potential ways forward in seeking resolu- tions to common issues. According to the survey, the general public mostly agrees that government should play some role in supporting homeowner- ship—82 percent—and about half of those private citizens surveyed saw home affordability as either a crisis or a serious challenge. So what's to be done about it? Most government officials agree, at least, on the problem. Fifty-nine percent said that they were engaged, in some way, in ongoing processes and policies that affect homeownership. More than 40 percent said they believe the nation faces a housing crisis, and another 33 percent—while not seeing the issue as dire as their coevals—still think affordability is a serious challenge that must be faced. When queried on their desired preferences for government support, however, this is where government and private opinion diverge. Among citizens, the top preferences for support include policies that address neighborhood revitalization, improved transit options, and the construction of smaller houses. State and local government officials, however, support policies that primarily focus on developers and build- ers, programs that incentivize developers or require builders to focus on the construction of low- income housing. Ultimately, the report takes ac- count of the information gathered and offers a few areas where improvement can be the subject of focus. Adjusted fees for developers to a square-footage basis rather than per unit, for example, would encourage higher-density housing construction. Also, it suggests that cities lacking land turn to com- munity land trusts to open up local land supply. It also encour- ages the government to reinvest in first-time homebuyer programs. "The ripple effects of the hous- ing affordability crisis and its neg- ative impacts on quality of life are being felt in communities across the U.S.," said Mark Funkhouser, publisher of Governing magazine. "Fortunately, public officials in state and local governments un- derstand the scale of the problem and are engaged in a variety of innovative practices and policy experimentations to make their communities more inclusive and affordable for all." FHL Bank's New Housing Goals Weigh in now on proposed amendments to the bank's housing goals. T he Federal Housing Finance Agency (FHFA) issued a notice seeking comments on the pro- posed amendments to the existing regulation for the Federal Home Loan Bank's (FHL Bank) housing goals. The new proposal seeks to replace the existing four separate retrospective housing goals with a single prospective mortgage pur- chase housing goal and establish a separate small member participa- tion housing goal. Under the proposed rule, the FHFA would set a single prospec- tive mortgage purchase housing goal as a share of each FHL Bank's total Acquired Member Asset (AMA) purchase. It would also set a new small member participation housing goal for par- ticipation by small institutions. The FHFA said that the proposed rule also intended to eliminate the volume threshold and instead allow FHLBanks to propose different goals levels for mortgage purchases and small member participation, subject to FHFA approval, as well as simplify and expand the eligibility criteria to enable federally backed loans to count for goals purposes. The proposed rule would also allow the banks to request FHFA approval of alternative target levels for the intended goals. The rule is proposing to eliminate the exist- ing $2.5 billion volume threshold that triggers the application of housing goals for each Bank. "To be successful, housing goals should lead the FHLBanks to make affordable housing part of their business plans for AMA," said FHFA Director Melvin L. Watt. "The overall approach of the proposed amendments will encourage FHLBanks and their members to build on the strengths of the AMA program to assist targeted borrower groups in a safe and sustainable manner." The Federal Home Loan Bank Act requires that the Director of FHFA establish housing goals con- cerning the purchase of mortgages, if any, by the FHLBanks. According to the FHFA, the goals should be consistent with those for Fannie Mae and Freddie Mac while consid- ering the unique mission and own- ership structure of the FHLBanks. FHLBanks purchase mortgages through the AMA program, which is voluntary for the banks. "To be successful, housing goals should lead the FHLBanks to make affordable housing part of their business plans for AMA." —Melvin L. Watt, FHFA Director

• Cover