New Map: Oregon FY 2012 Zip Code FMR's vs. Actual FY 2012 FMR's.

HUD continues to advance the idea of small area (zip code) level rents to supplement/replace the county or Metro wide FMR's now in use.  For example, a recent HUD MF notice to multifamily project based Section 8 owners HERE said that in the future HUD plans that " all rent comparability studies will be required to justify proposed rents that exceed 110% of Small Area Fair Market Rents (SAFMR)."  

I am generally aware that FMR limits are sometimes used for CDBG and HOME programs, so broader HUD use of small area rents could conceivably also impact those programs in the future.

I recently discovered that HUD has posted an Excel file of nationwide FY 2012 Small Area/Zip Code rents HERE. (Important NOTE: Small Area/Zip Code FMR's at least for now are ONLY contemplated for use in Metro areas. In the voucher program Small Area FMR's have been limited as a demonstration to ONLY those areas where a housing authority has volunteered to use them).

I extracted Oregon FY 2012 Small Area rents and prepared an alpha PDF listing by county and zip code HERE showing the comparison of the actual 2 BR FMR for FY 2012 to the HUD published 2 BR FY 2012 small area/zip code rent. 

I count 121 Oregon zip codes where small area rents would be below actual FY 2012 FMR's and 130 zip codes where small area rents would be above actual FY 2012 FMR's.

I then uploaded and merged the FMR comparison data into Google Fusion and created the embedded map below that illustrates how the FY 2012 small area rent would compare to the HUD FY 2012 FMR.

The caption showing the colors used for different % is pasted below [Bright green signifies zip code rents are 120% or more of actual FMR's and dark red indicates zip codes rents are 90% or less of actual FMR's].

A link to the merged data and the map is HERE and the map is embedded below (You can drag the map up/down/sideways to see areas in Oregon outside of the Portland metro area; you can zoom in; and, if you click on a zip code, a box will open with the data for that zip code).

Originally created and posted on the Oregon Housing Blog.

HUD Publishes FY 2012 Income Limits, Portland 4 Person MFI Up $1,000.

HUD Income limit page is HERE, FY 2012 data HERE.

A quicky: Portland Median Family Income for family of 4 is $73,000, up $1,000 from FY 2011, PDF for Oregon is HERE.

Multifamily Tax Subsidy/LIHTC limits are HERE; look for FY 2012.

Originally created and posted on the Oregon Housing Blog. 

HUD Conference Committee FY 2012 Budget vs FY 2011 Enacted and President's Proposed FY 2012.

Using NLIHC budget table , I have prepared a PDF file HERE that shows my calculation of the differences between FY 2012 conference committee reported HUD budget and FY 2011 enacted and FY 2012  budget request by the President.

Biggest loser I see are CDBG and HOME programs which were cut 12% and 38% from FY 2011 levels.   Tenant based voucher did better than expected with a more than 3% increase, but admin fees were cut by nearly 7%. Project based Section 8 increased by less than 1%.

Based on my read of report it does not look like any of the changes in public housing/voucher eligibility and reduction in frequency of income verification for fixed income recipients made it into the final bill. [Difficult to cut voucher admin costs by 7% without some regulatory relief...].

Full conference committee report is HERE. 

Originally created and posted on the Oregon Housing Blog.

HUD FY 2012 Conference Committee Report Out,

The House/Senate Conference Committee Report that includes FY 2012 HUD appropriations has been published in the Congressional Record.

Title II, the HUD portion of the bill, starts at page 33 HERE. Lots of different provisions, I note that it includes FHA mortgage increases and $125 million for HUD/NRC mortgage counseling.

I expect NLIHC will have a comparison table up today or tomorrow on their web page HERE. Both the House and Senate will have to pass the legislation before it goes to the President for signature, presumably by the end of this week.

Originally created and posted on the Oregon Housing Blog.

New Excel Tool: Compare Proposed FY 2012 FMR to LIHTC Rents, 4,700+ Areas.

I have prepared a new Excel workbook HERE that allows three side by side area comparisons of HUD proposed FY 2012 2 bedroom Fair Market rents to LIHTC 50% or 60% MFI rents. The workbook also shows comparisons to LIHTC rents reduced by 5%, to simulate "street rents" that are below the LIHTC maximum rents.

To make these comparisons all the user has to do is select from a pull down list of more than 4,700 alphabetically listed areas. Once that is done Excel calculates 12 values and answers:

1. 2 BR LIHTC Max Rent,50% MFI
2. 2 BR LIHTC Max Rent, 60% MFI
3. 2 BR LIHTC Rent,50% MFI, X 95%.
4. 2 BR LIHTC Rent,60% MFI, X 95%
5. 2 BR FMR, FY 2012 MINUS 2 BR LIHTC Max Rent,50% MFI
6. 2 BR FMR, FY 2012 MINUS 2 BR LIHTC Max Rent, 60% MFI
7. 2 BR FMR, FY 2012 MINUS 2 BR LIHTC Rent,50% MFI, X 95%.
8. 2 BR FMR, FY 2012 MINUS 2 BR LIHTC Rent,60% MFI, X 95%.
9. Is 2 BR FMR LOWER than 50% MFI LIHTC Max Rent?
10. Is 2 BR FMR LOWER than 60% MFI LIHTC Max Rent?
11. Is 2 BR FMR LOWER than 50% MFI LIHTC Rent X 95%?
12. Is 2 BR FMR LOWER than 60% MFI LIHTC Rent X 95%?

The workbook also includes a worksheet that allows users to filter areas by state, so they can see the area selections available for their state.

Note: The area comparison worksheet is password protected to prevent inadvertent data entry. 

Downloading Tip-This workbook was created in Excel 2007 format. Some users report they cannot direct view Excel files in this format from within their browser and that Excel files they save end up with a compressed .zip file extension. My suggestion is to RIGHT CLICK and save the file to your PC. Then navigate to the file you downloaded and look at its file extension. IF it appears as .ZIP extension, change the .ZIP extension to an Excel 2007 extension (.xlsx), and THEN open the file with Excel 2007/2010.

Originally created and posted on the Oregon Housing Blog.

State Table Showing Percentage of Areas Where HUD 2 BR FMR is LESS than LIHTC Rent.

I have prepared a table HERE that shows by state

• The number and percentage of areas where the HUD FY 2012 FMR is less than the LIHTC maximum rent for 50% MFI restricted LIHTC units.
• The number and percentage of areas where the HUD FY 2012 FMR is less than 95% of the LIHTC 50% MFI rent maximum. This "street rent" adjustment allows for comparisons in situations where market conditions prevent a LIHTC project from achieving the maximum allowable rent. 

Some observations: 

• If FMR/voucher rents are below LIHTC rents, those LIHTC units may not be available to voucher holders unless they are granted an exception rent or unless they pay 100% of the difference between the FMR and the LIHTC rent.  
• 38% of all areas have 2 BR FMR's that are below the 50% LIHTC rent limit; that percentage drops to 25% when using 95% of the LIHTC 50% rent maximum. (If 60% MFI LIHTC rents were used for comparison 84% of all areas would have LIHTC rents higher than HUD FMR's, that percentage drops to 75% if 95% of the 60% MFI LIHTC rent limit is used).
• Iowa (100%) has the highest percentage of areas where the voucher rent is below the LIHTC 50% MFI rent maximum; that percentage stays the same even when using 95% of the LIHTC 50% MFI rent.
• Minnesota (97%) is another state where there are a large number of areas where the voucher rent is below the LIHTC 50% MFI rent maximum; that 97% drops to 75% when using 95% of the LIHTC 50% MFI rent
• California and NY have FEW areas where FMR's exceed LIHTC rents, and when using 95% of the LIHTC 50% MFI rent their percentage of areas where FMR are below LIHTC rents drops to ZERO for California and 2% in New York.
• Several other rural states appear to have high percentages of areas where FMR's are below LIHTC rents.

Originally created and posted on the Oregon Housing Blog

One Oregon Example, HUD FY 2012 Fair Market Rents Will be LOWER than LIHTC Allowable Rents.

I thought it might be useful to compare HUD FY 2012 proposed FMR's to allowable Low Income Housing Tax Credit rents for an Oregon area with a substantial decreased in FMR's, so I chose Hood River County, which is slated for a 21.1% decrease in their 2 BR FMR.   

Using the formula for conversion of LIHTC income to LIHTC bedroom size formula that I snipped from HUD website (see first image pasted below), I prepared the table below (see second image) showing how HUD FMR's for FY 2012 would compare to the current LIHTC rent limits for Hood River County.

Two observations:

1. Except for 3 and 4 bedroom LIHTC units reserved for families at incomes of 50% or below, ALL Hood River LIHTC allowable rents are HIGHER than the HUD proposed FY 2012 Fair Market Rents.
2. LIHTC owners are required to rent to voucher holders, but NOT at a discount. IF the LIHTC allowable rent is at street rent levels this would mean that LIHTC owners could refuse voucher tenants unless the PHA authorized a higher exception rent (or the family makes up 100% of the difference between FMR and street rent). Granting higher exception rents would reduce the number of families that could be served with voucher funding at the new FMR's; paying higher rents than 30% of income defeats the affordability purpose of the voucher program. 
3. These FMR to LIHTC rent relationships may change when HUD publishes new income limits.  If incomes go up, this would only increase the gap between HUD FMR's and LIHTC allowable rents.

If anyone has any additional insights on the impact of proposed FMR's on LIHTC rents and LIHTC projects I ENCOURAGE YOU to add observations below this post or drop me an email. [I am by no means a LIHTC expert]. Ditto if there are calculation issues that you see.

Originally created and posted on the Oregon Housing Blog. 

Portland Metro FY 2012 Proposed FMR Reduction Impact: $2.6 Million.

I used same methodology used for my earlier Chicago estimate of FMR reductions and produced the table below for the 6 county Portland metro area. Using estimated voucher counts shown in the table, impact would be a loss of $2.6 million annually from the proposed reduction of the 2 BR FMR for FY 2012. (This does not include any loss of admin fee that would result from a reduction in the 2 BR FMR).

Originally created and posted on the Oregon Housing Blog.

Estimate of Chicago Metro Impact, FY 2012 Proposed HUD Fair Market Rent Reductions: HUD Vouchers Will Support $51 Million LESS in Rents.

I did a quick calculation showing the impact of the FY 2012 proposed fair market rents for the Illinois counties in the Chicago metro area.

Using estimated county/PHA counts of vouchers that I extracted from a previous count of housing units by housing authority and the amount of the monthly proposed FMR changes for FY 2012 for each of these counties, I estimate that 2 BR rents supported by these vouchers will decrease by more than $51 million in FY 2012.  (Pic below of table by county).

Originally created and posted on the Oregon Housing Blog.

HUD FY 2012 NATIONAL Proposed FMR's: 70% of Areas Would Have Decreased FMR's, More than Triple the Number of Areas with Decreases Last Year.

I figured out a way to download the Excel national file from HUD website with proposed FY 2012 Fair Market Rents (link on HUD web page as of mid Friday was to wrong file).

Using that data, I have put together two tables HERE that show 

1. The number and percentages of areas within a state with increases, decreases, and no change. 
2. The number and percentages of areas within each HUD Region with increases, decreases, and no change. 

Some observations: 

• 70% (3,318) of all areas (4,765) have proposed decreases in Fair Market Rents. 
• Data is not in these tables but my quick count of FY 2011 data shows only 1,025/22% of areas had decreases from prior year so the 70% of areas with proposed reductions for FY 2012 IS more than 3 times the share of areas with decreases from last year.
• HUD Region 4 has the highest % of areas with FY 2012 proposed decreases, 80%; HUD Region 7 has the lowest percentage of proposed decreases at 50%.
• In HUD Region 10, 78% of areas have proposed reductions; the state within Region 10 with the highest % of areas with proposed reductions is Idaho with 86%.(Oregon is at 78%).
• Data is not in the table , but I calculate that the national median change between the FY 2011 final 2 BR FMR's and the proposed FY 2012 2 BR FMR's is a reduction of 2.5%, or $18 per month.This contrasts with my calculation that last year the median was a 1.1% increase of $8 per unit per month.

Originally created and posted on the Oregon Housing Blog.

Oregon FY 2012 FMR's vs FY 2011: Turns Out 78% of Counties WILL Have Decreases.

HUD has this morning posted the proposed FY 2012 Fair Market Rents. 

• The main HUD FMR web page is HERE, 
• The formal Federal Register publication is HERE.  
• To see documentation for how changes were calculated you can start HERE, and then select geography of interest.

I did an analysis of Oregon FMR's and have constructed tables HERE that show Oregon FY 2011 and proposed FY 2012 FMR's for 4 different bedroom sizes, with a focus on 2 BR FMR's.

The tables on second page show comparison between current FY 2011 FMR's and proposed FY 2012 FMR's.

Some observations:

1. 78% of Oregon Counties (28 out of 36) would see reductions in FY 2012 FMR's.
2. The median change in 2 BR FMR's for all Oregon counties is a 6.3%/ $44 per month reduction in 2 bedroom Fair Market Rents.
3. Hood River county would see the largest reduction, 21.1% /$158 per month reduction in their 2 BR FMR.
4. Curry county would have the largest increase in their 2 BR FMR; 4.6%/$32 per month. (Clatsop, Deschutes, Gilliam, Jackson, Marion, Lane,and Polk are the other counties with increased FMR's).
5. Counties in the Portland metro area would see a 1.5%, $14 reduction in their 2 BR FMR.

     I am not aware of any hold harmless policy related to FMR's, and I don't completely understand how they will apply to individual circumstances as we move into the new FY. If anyone knows that information, feel free to add as a comment on this post.
   

HUD has not yet published a national Excel file that I can compare to FY 2011 to see whether more areas received decreases this year compared to last. I suspect that is true, but don't have any current way to check that suspicion.

Note: On page 2 of the tables I created I added text "NOTE: Revised as of Friday AM, August 19, 2011; yesterday I had posted an earlier table with some errors and subsequently removed it from my web space, and renamed the table. To insure you are using the corrected version look for this note at bottom of page 2. 

Originally created and posted on the Oregon Housing Blog.

CORRECTION HUD Fair Market Rents Coming Tomorrow.

Thanks to some feedback it is clear that my original calculations of FMR changes [80% of counties seeing decreases were OFF] big time. My BIG apologies. 

I am taking down previous post and MIS[observations]  and linked table and time permitting will put up a new one, I continue to encourage you to look for the FMR's tomorrow.

HUD has posted a PDF of proposed FMR's for FY 2012 with the Federal Register public inspection desk, and I have reposted to my webspace HERE (Oregon FMR's are on page 107); I expect official publication in the Federal Register tomorrow. 

Tomorrow or perhaps later today I expect HUD will publish FY2012 proposed FMR's in Excel format along with documentation about how FMR's were calculated for each metro area. I would look later at the HUD FMR web site for that information HERE.

Originally created and posted on the Oregon Housing Blog.

HUD Proposed FY 2012 FMR's Coming, PDX 2 Br FMR Going Down to $891?

HUD should be publishing today or tomorrow proposed FMR's for FY 2012, starting October 1st. 

I should have something more concrete statewide by tonight. 

However, my quick look at Portland metro shows proposed 2 br FMR DECREASING from $905 to $891, a 1.5% decrease. [This doesn't feel right to me, but if it is right it would be big news. Stay tuned for later post].

Originally created and posted on the Oregon Housing Blog.

Good Stuff Buried in HUD FY 2012 Detailed Congressional Justifications.

Be the life or your party! Amaze your friends! Or...if you have difficulty sleeping you can download HERE very detailed justifications by program area from HUD's FY 2012 proposed budget.( I count close to 50 separate justifications by programs and topics).

All kidding aside, there really IS a lot of detail buried in these reports; for example from the Section 202 Housing for the Elderly CJ HERE you will find these tidbits:

A. Graph below shows the rapidly growing annual costs of renewing existing PRAC /operating subsidy costs for existing Section 202 elderly projects, with annual renewal costs in FY 2012 projected at more than 5 TIMES the annual costs in FY 2007: 

Click to Enlarge

B. HUD plans shift in focus for 202 in the future

In fiscal year 2012, HUD proposes appropriations language changes to allow funds to be used for the newly authorized senior preservation rental assistance contracts to maintain affordability in older Section 202 developments originally financed with direct loans. Going forward, HUD will also continue to align new Section 202 developments with ongoing efforts by the Department of Health and Human Services and its state partners to better deliver services to frail elderly aging in place in the community. New Section 202 housing would increasingly serve Medicaid-eligible households receiving licensed care in the context of independent living and would increasingly be co-located with community-based health care facilities.In addition, HUD will be doing more with Section 202 program funds by prioritizing leveraging of other mainstream affordable housing funds rather than fully funding the full capital advance award amount and streamlining the operating subsidy structure to increase efficiency and leverage. HUD is also working to better ensure that Section 202 program funds are awarded to higher capacity sponsors who have projects that are lined up and ready to go. Taken together, these reforms will: 1) create and sustain more affordable units at a lower initial cost than in previous years; 2) streamline and modernize the program to reduce administrative processing and increase the likelihood of units successfully being completed under a shorter timeframe; and 3) ensure that new housing serves as a platform for elderly persons to age-in-place in the community

[Editorial comment: If HUD would just publish the damn LONG delayed NOFA for Section 202 that uses FY 2009 funds it might have a little more cred on the "shorter timeframe" goal]. 

Originally created and posted on the Oregon Housing Blog.

President's Proposed FY 2012 Budget: HUD Outlays as Share of Total Federal Outlays Will be At Lowest % in Last 40 Years.

In beginning to dig into FY 2012 proposed budget details, I looked at an Excel spreadsheet HERE that shows the historical percentage of Federal outlays by agency.  (Outlays are better to focus on IMHO as they show one year obligations instead of multi year budget authority). 

The graph below illustrates the Excel data and shows how HUD's share of outlays has changed over the 1972-2016 (estimated) period, including the estimate for FY 2012. 

Notably, the projected 1.3% of total federal outlays for HUD in FY 2012 is:

1. Lower than it has ever been under any Republican President in the last 40 years,
2. In fact, the LOWEST it has ever been under any President in the last 40 years,
3. Is LOWER than the 2008 HUD share of outlays (1.6%) [which some Republicans say they want to revert back to]; that 1.6%  also happens to be the same share of federal outlays that HUD had in 1972.

Double Click to Enlarge

 Originally created and posted on the Oregon Housing Blog.

HUD/Treasury Budget Materials-Several Preservation Items.

HUD has now published their summary of the FY 2012 proposed budget HERE. 

The Treasury summary of FY 2012 revenue proposals is HERE. (LIHTC provisions begin on PDF page 30).

Some excerpts and my comments on several housing preservation related proposals. 

...the budget includes $200 million for a demonstration and rigorous process evaluation of the conversion of up to 255,000 public housing units to long-term project-based rental assistance contracts. Public housing authorities will then be able to leverage private capital to make repairs. Through similar conversions, the demonstration will preserve 7,600 privately-owned, HUD-assisted units at risk of leaving the affordable housing stock [Comment: Unless the FY 2011 proposal has changed significantly in FY 2012, conversion of public housing units would provide priority to housing authorities who ONLY have public housing units--this excludes virtually ALL Oregon housing authorities.  A better alternative for Oregon would be to put this money back into CDBG or HOME program. )

The Department’s overall preservation agenda is complemented in the Department of Treasury’s budget for fiscal year 2012, which proposes two reforms to the Low Income Housing Tax Credit (LIHTC) that will:
• Replace the current cap on household income at 60 percent of area median income with the option that properties serve households whose average income is no greater than 60 percent of AMI and with no individual household above 80 percent of AMI. These changes to the Code’s low-income occupancy threshold requirements will accomplish three things: (i) allow greater income-mixing at the project level, creating opportunities for workforce housing; (ii) help align LIHTC with HUD’s and USDA’s affordable housing programs (which define low-income at 80 percent of area median income); and (iii) lead to the creation of more units targeted to the lowest income households. It’s important to note that this income averaging proposal increase our ability to preserve
HUD-assisted properties. 69,224 households living in public housing and 23,271 households in multifamily housing have incomes above 60% of AMI. This proposal allows these units to be counted in basis, increasing the equity flowing to these projects for preservation. [ Comment: This does NOT directly benefit worst case housing needs that are concentrated with the lowest income rental households].
•Make the 4% credit a more viable source of funding for the preservation of the federal affordable housing stock by giving qualifying properties a 30% basis boost in the context of preserving, recapitalizing, and rehabilitating existing affordable housing, particularly public housing targeted by TRA (as well as Multifamily Housing, 236s, BMIRs, RAP,
Rent Sup, 202, 811, HOME, McKinney and CDBG funded units, USDA-RD (515s)). This means that a greater amount of equity could be raised per credit even at the higher yields required by investors for 4% investments, which in turn will generate more interest in LIHTC preservation deals within the investor and developer community. [Comment: This makes sense as long as affordable housing targeted IS limited to low income units].

Originally created and posted on the Oregon Housing Blog.

Two Additional Quick Hits on FY 2012 Budget Non HUD Housing Items.

A couple of NON HUD related housing proposals caught my eye within the FY 2012 Budget Federal Receipts document HERE (PDF page references included): 

p38
Simplify single-family housing mortgage bond targeting requirements.—Current law allows use of tax-exempt private activity bonds to finance qualified mortgages for single-family housing residences, subject to a number of targeting requirements, including, among others: (1) a mortgagor income limitation (generally not more than 115 percent of applicable median family income, increased to 140 percent of such income for certain targeted areas, and also increased for certain high-cost areas); (2) a purchase price limitation (generally not more than 90 percent of average area purchase prices, increased to 110 percent in targeted areas); (3) a refinancing limitation (generally only new mortgages for first-time home buyers are permitted); and (4) a targeted area availability requirement. The Administration proposes to simplify the targeting requirements for tax-exempt qualified mortgage bonds by repealing the purchase price limitation and the refinancing limitation.

P 107
Limit itemized deductions. The Administration is proposing to limit the tax rate at which high-income taxpayers can take itemized deductions to a maximum of 28 percent, affecting married taxpayers with incomes over $250,000 and singles over $200,000. This will reduce the value of tax expenditures for such deductions, which include mortgage interest, state and local taxes, and charitable contributions.

Originally created and posted on the Oregon Housing Blog. 

First Look at HUD FY 2012 Budget Proposal-Modest Cuts?

This is the first of several FY 2012 HUD budget postings.

In a document HERE, the Administration has identified discretionary programs it proposed to terminate or reduce funding for in its FY 2012 budget . For HUD, I count a reduction of $698 million for these terminations/reductions; the graphic includes details and also shows the PDF page number for each of the 7 reductions I have included. 

Click to Enlarge

NOTES

1. For FY 2011, the President's budget had proposed a HIGHER total of $965 million in HUD reductions--nearly $300 million more than what the FY 2012 budget appears to be proposing. 
2. The last enacted HUD budget (for FY 2010) was a substantial increase from prior years; the link HERE is to the NLIHC chart of HUD budgets that includes data on FY 2010, proposed FY 2011 (never enacted), and prior FY HUD appropriations. (I expect a new version of this chart that includes the FY 2012 proposed budget will appear later this week).  
3. As a further point of reference, some Republicans are calling for scaling back of domestic budgets to FY 2008 levels; for HUD that level would be $37.6 billion, according to the NLIHC chart. 

The "Cliffs Notes" version of the HUD FY 2012 Budget from the Administration is HERE, and includes more details on both budget authority and outlays for major HUD programs, including comparisons to prior year amounts.

In future posts as time permits I will provide links to more detailed "WONK" versions of HUD FY 2012 budget documents and analysis from other sources.

Originally created and posted on the Oregon Housing Blog.