January 2017 - The World's Local Bank

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TH E M R EP O RT | 57 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 GOVERNMENT THE LATEST HUD and VA Combine Efforts for Homeless Veterans The recently announced funding is the second set of funds HUD has invested in ending veteran homelessness this year. H UD and the U.S. Department of Veterans Affairs (VA) have again combined forces to fight homelessness among veter - ans, announcing the distribution of $18.5 million to 39 local public housing agencies. The funds are expected to help approximately 2,100 homeless veterans through the HUD-Veterans Affairs Sup - portive Housing (HUD-VASH) Program, combining HUD's rental assistance with the VA's case management and clinical services. According to HUD, the HUD- VASH Project-Based Vouchers are attached to specific existing, newly constructed, or rehabilitated units, and will preserve affordable hous - ing, ensuring that those who need the services will receive them. "Housing our nation's veterans has been a top priority of this Administration, and one at which we've been particularly success - ful," said HUD Secretary Julián Castro. "We take seriously our responsibility to ensure that those who have served their country in uniform have a home, and these vouchers will expand our success in ending veteran homelessness as we know it." This is the second round of funding distributed by HUD this year to help end veteran home - lessness. In June, the department awarded almost $38 million to assist more than 5,200 veterans. The Obama administration has made ending veteran homelessness a priority. The administration and 19 federal agencies and offices that form the U.S. Interagency Council on Homelessness (USICH) launched a comprehensive strategy, Opening Doors: Federal Strategic Plan to Prevent and End Homelessness, aimed at preventing and ending homelessness, particularly among veterans. HUD announced in August that veteran homeless - ness across the country had been reduced by half since 2010. Since 2008, more than 79,000 vouchers have been awarded, serv - ing approximately 111,000 veterans through the HUD-VASH program. "Increasing the supply of af- fordable housing is one of the keys to ending veteran homeless- ness," said VA Secretary Robert A. McDonald. "The project-based HUD-VASH vouchers announced today will increase the availability of affordable housing for the most vulnerable homeless veterans in communities across the U.S. and ensure they have access to VA case management and supportive services to remain stably housed." FHA's MMI Fund Is 'Financially Sound' After wallowing below the congressionally- required threshold for several years, the MMI reported two years above it. T he Federal Housing Administration's (FHA) Mutual Mortgage Insurance (MMI) fund, which has been a source of con - troversy in the housing industry over the last two years, is more than 30 basis points higher than the minimum required by Con - gress after expanding by $3.8 billion in Fiscal Year 2016. Congress revealed that this was the second consecutive year the MMI fund's capital ratio was reported to be above the 2 percent threshold required by Congress after increasing by 12 percent in FY2016 up to 2.32 percent. "FHA's strong, sustained progress has helped fuel the housing market recovery over the past eight years," said HUD Secretary Julián Castro. "Today's report once again confirms that our steps to maintain a financially sound fund are paying off, giving more American families the opportunity to afford a home of their own." FY2016 was also the fourth consecutive year that the net worth of the MMI fund has expanded. The MMI fund's value is now $27.6 billion as of the end of FY2016 after the $3.8 billion gain. The fund has gained nearly $45 billion since hitting a low of minus $16.3 billion in 2012. "FHA has come a long way since our housing crisis," said Ed Golding, HUD's Principal Deputy Assistant Secretary for Housing. "With evi - dence that FHA's fundamentals are strong and improving, there is no doubt that FHA is making steady progress accumulating capital and, at the same time, improving access to credit for working families." The FHA's Single Family Forward Portfolio outperformed the actuary's projections by $10.1 billion with a gain of $18.3 billion in value in FY2016. At the end of the fiscal year, the portfolio's capital ratio was 3.28 percent. The Single Family Forward Portfolio gained $18.3 billion in value, outperforming the actuary's projections by $10.1 billion and achieving a capital ratio of 3.28 percent. Following the crisis in 2008, the MMI fund experi - enced several years below the congres- sionally-required minimum of 2 per- cent. In November 2014, the capital ratio's level was at 0.41 percent; with the capital ratio less than a quarter of the threshold set by Congress, the FHA generated considerable controversy two months later when it announced the lowering of the MMI fund premium by 50 basis points down to 0.85 percent. Republican lawmakers accused the FHA of cutting off a revenue stream while the capital ratio was so far below the level required by Congress. In November 2015, FHA an - nounced that the capital ratio had shot up from 0.41 percent the year before up to 2.07 percent. The agency has not lowered or raised premiums since the move in January 2015, however. "FHA has come a long way since our housing crisis" —Ed Golding, Principal Deputy Assistant, Secretary, HUD

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