WASHINGTON (2/5/14)--U.S. Housing and Urban Development Secretary Shaun Donovan called for $5 billion to be dedicated to affordable housing production per year, and discussed other housing finance reform goals, in remarks made before the National Association of Hispanic Real Estate Professionals 2014 Housing Policy and Hispanic Lending Conference.
Donovan said Tuesday that the $5 billion in funds should be earmarked for HUD's Housing Trust Fund and the Capital Magnet Fund.
The Housing Trust Fund complements existing federal, state and local efforts to increase and preserve the supply of decent, safe, and sanitary affordable housing for extremely low- and very low-income households, including homeless families, according to HUD. The Capital Magnet Fund is used by the U.S. Treasury's Community Development Financial Institutions Fund to provide grants to CDFIs and qualified nonprofit housing organizations.
Overall, Donovan said "housing can be an area of common ground," and called on "all parties to finally make reform a reality."
He highlighted three pillars that the Obama administration has identified as vital to any housing finance reforms. They are:
Maintaining consumer access to 30-year fixed rate mortgages, and giving smaller lenders the same access to the capital markets as the big banks;
Private capital should be at the center of the system; and
Creating an explicit, defined role for the government.
"Let's keep up the pressure to put housing finance reform at the top of the legislative agenda," he said.
The Credit Union National Association continues to advocate for credit unions as housing reform moves forward. CUNA has repeatedly said that credit unions appreciate the need to reform the current housing finance system, but any reforms must not hinder the ability of credit unions to meet their members' housing finance needs in a member-friendly cooperative way. CUNA has also said that the transition from the current system to any new housing finance system must be reasonable and orderly, and the transition deadline needs to be flexible.
Other CUNA suggestions for a future mortgage market include:
There must be a neutral third party in the secondary market, with its sole role as a conduit to the secondary market;
The secondary market must be open to lenders of all sizes on an equitable basis; and
The new housing finance system should emphasize consumer education and counseling as a means to ensure that borrowers receive appropriate mortgage loans.