NHRC Proposals to Integrate Housing Counseling and Expand Access to Mortgage Credit

Last week, the comment period closed for two federal regulations that will impact access to affordable mortgage credit for low- and moderate-income borrowers and the National Housing Resource Center (NHRC) submitted comments that encouraged the agencies to act to expand access to responsible, sustainable mortgage credit. But in line with our mission to integrate housing counseling into the regulatory process, NHRC also made proposals with a housing counseling twist.

The Federal Housing Finance Agency (FHFA) solicited public comments in response to its proposed Housing Goals for 2015-17. The Housing Goals set targets for Fannie Mae and Freddie Mac to purchase single family home purchase and refinance mortgages made to low- and very low-income borrowers, as well as for multifamily units that are affordable to low-income renters.

NHRC proposed that Fannie Mae and Freddie Mac get extra credit for mortgages on two-to-four unit homes where 1) the home is owner occupied, 2) the owner received housing counseling and 3) the counseling included a landlord counseling component.  The extra credit is a 1.25 credit for every mortgage.  This extra credit will encourage lenders to guide more people to counseling and encourage owner occupied two-to-four unit lending. Income from the rental units will make the houses more affordable to low- and moderate-income buyers and the counseling will help owners succeed.

NHRC also submitted comments last week to the Consumer Financial Protection Bureau (CFPB) in response to proposed changes to the Home Mortgage Disclosure Act (HMDA), which requires financial institutions to publicly report loan and applicant data in order to help determine whether those institutions are meeting the housing needs of their communities in a nondiscriminatory way. For HMDA reporting, NHRC urged CFPB to add housing counseling fields, including the type of counseling (counseling or education), the mode of counseling (in-person, telephonic, or online), and the counseling agency ID.