hush money trial of former president trump. c-span's "washington journal" joint in the conversation live at 7:00 a.m. eastern friday morning on c-span, c-span now the free mobile app or online at c-span.org. correct cspan2 is your unfiltered view of government. we but friends don't have to be. when you are connected, you are not alone. on any other television provider giving a front row seat to democracy. >> acting secretary for the department of housing and urban development the director of the federal housing finance agency

testified on increasing housing supply at reducing costs for borrowers but this before the senate banking committee. it's an hour and 45 minutes. [inaudible]

[inaudible conversations] committee on housing urban affairs is called to order. thanks to the two witnesses joining us. home is more than four walls and a roof for the play and do their homework home as we plan for the future and build wealth. home is millions of families during the middle class. homes are an anchor in our lives for too many families are in the country home they can afford and build their life around feels out of reach. i hear it and ohio, hear from everywhere from people mine by the city similar to where i grew up in mansfield. fifty-four apartments for working families just opened 54

partners at 50011 interested families but i hear it from rural washington county in southeast ohio marietta, church town, they struggled for years 48 homes for seniors right here in franklin county in central ohio, columbus population is grown by 14% to more than 1.3 million people housing supply has not kept up and prices have been rising for years and years. with more people that counted with world-class schools and skilled workforce is great quality of life will only continue to grow. to hear the stories from across ohio. it is not just happening in ohio. whether you are in downtown columbus, or minneapolis or rural south dakota or wyoming or south carolina housing is too expensive. it has been for years. it has been for far too long.

one big reason we do not have enough of it. for the past decade rent has gone up and up and out part one and four renters pay more than half their income for rent. more than half of your income goes to rent every month, it is hard to juggle all the bills you have let alone save for a down payment. height rent stops people from becoming homeowners so many families think if i can only come up with they're down payment the money for a down payment is what stands between millions of americans and building generational wealth. that's why my bill supports a first generation homebuyers down payment toward equity act and the helper act specifically they're down payment toward equity act is a broadly for teachers, firefighters and police officers to allow them to buy homes in their communities and other sources of assistance. all that is so important.

director thompson, you know these challenges because you'rer agencies are at the center of our efforts to lower the cost of housing. your agencies do not build housing of art housing markets your job is to make sure there is affordable housing for the hauser's and builders and housing providers create the families can get a mortgage to buy their first home and as americans get older they can still live safely in their homes. both of your agencies have announced changes that should help increase housing supply and bring down costa. following calls from senator reid and me and others hud acted to improve access to financing for affordable housing through fha and the federal financing bag parade this will help housing providers and states build and preserve more affordable housing for renters across the country. hud's a long overdue update to load limits for manufactured housing's new guidance to support conversion of old office space into homes will open up new housing options.

especially in cities like cleveland. you have a limit upfront fees of fannie and freddie have in the past charge lower income first-time homebuyers and borrowers who could not afford a big down payment to begin with. you also refocus to fannie and freddie the federal home loan banks with their roles not just in financial markets but in helping to support housing families and communities need. the fact remains housing prices are still far too high. they have been for years and years it will take all of us working together housing providers, federal, state, local governments to lower cost hud and fha need to do more to be vigilant and ensuring taxpayer money is actually serving families not enriching shady landlords and wealthy investors. wall street firms and other outside investors swoop into communities but they buy up properties they evicted tenants and drive up local housing prices we should pass my stop predatory investing act to end

their tax breaks for buying up numbers of single family homes. we need to ensure all of our housing agencies are on the same page and working to stop not in any way supporting this predatory business model. state and local governments have a lot of influence over the housing and their communities more and more cities and counties are making changes like updates to zoning like shortening lengthy approval processes to open up opportunities for new housing, expand access to affordable homeownership. hud is a critical partner in supporting that work. franklin county commissioner kevin testified these sent on behalf of the national association of counties about critical role homes, cdbg and the housing trust fund play and helping counties of every size to address housing needs. local communities depend on this partnership. even with more housing some families working low-wage jobs some seniors on fixed income still will not make enough.

sorry okay. hud's housing assistance program are critical to keep rent affordable. >> excuse me. [laughter] well done. [laughter] i am almost done senator scott. >> take your time mr. chairman. [laughter] i need to make sure they work effectively and officially to serve our communities and protect our investments. congress needs to do our part. last month this committee had a hearing on legislative proposals help expand our housing supply and bring down the cost of housing let's continue our bipartisan work to move forward with common sense proposal help expand housing options and reduce cost i look forward to continue to work with ranking member scott on this committee towards that goal. i look forward to hearing today from the two leaders before us about what they have done. what more they can do. what resources they need to get

their input of what congress can do to make housing more affordable for renters and for homeowners. ranking member scott peck works works thankyou both for being h. congratulations well done. expect you to be completely prepared were going to talk about over the next several hours, likely. thank you, mr. chairman for holding this hearing. i've been asking for about a year to have both of you in front of us. so it is certainly something that is absolute essential for us to be able to hear from our regulators as often as possible to achieve the goal of american homeownership because american homeownership is not just homeownership it is in fact in the eyes of so many americans the american dream. if we are going to close the wealth gap with that we talk so much about we are persistent is by create equity in creating equity comes from homeownership in our economy so thank you both for being here. you think about the value of

homeownership, consistently, americans owe somewhere around somewhere amount $12 trillion on their mortgages. mortgage debt accounts for 70 plus% of consumer debt in the united states of america. not an insignificant amount of money. and yet, the last time we had this hearing was back during the trump years when chairman crapo was chairman of this committee. i certainly hope we have more opportunities you from both of you at the same time going forward. the american dream of home ownership is further out of reach today than it was just a few years ago despite the subsidies the trillions of dollars we spent over the decades, little has changed in 1970 homeownership and america was 64% today it is 65% rate since the passage of the fair housing act in 1968 the goal was to eliminate housing discrimination. the homeownership rate for

african americans has not changed much, 41%, 44%, it continues to have a very slow growth trajectory. our housing regulators must testify up more often so that we can find ways to deal with the challenges that housing presents to so many americans. but sincepresident biden's takee mortgage rates have ballooned by 150%. rent have gone up about 20%. homelessness is up 12% in a single year. the highest number on record in the history of our country despite empty promises from the white house about helping working families the simple fact is the housing under this administration has skyrocketed. i see that at home in south carolina and i see that across the nation as i travel. i see that in families worried about how to make ends meet watching the dream of homeownership seemed further and

further and further away. what has become apparent as this administration about affordability and housing has failed to line up with their policies. reckless spending on progressive wish list fueled runaway inflation and now americans are painfully aware biden mixes not help them. instead burdened them so much. the mountains of red tape and regulations this administration has put on housing providers are only making that matter so much worse. officially, both hud and f hfa have taken several politicized actions that will unnecessary increase the cost for families and burden communities. i have recently imposed rent controls on low income housing tax credit properties. f hfa is public comments on policies enclosing correct rent controlviolent direction fe

house. what do these policies mean in practice? they have the potential to limit the number of people served by these programs and restrict the supply of affordable housing. decades of research have improvement rent control policies make housing supply and affordability issues worse, not better. this is the type of backward logic americans have come to expect from joe biden and biden makes. second, hud and joined other federal agencies under this administration in attempting to add climate regulator to the list of duties. for instance hud proposed requiring all newly constructed subsidized housing be built to increase energy efficiency standards, even though hud itself admits lower income households may not be able to afford the added burdens of additional cost.

according to the national association of homebuilders these new environmental mandates could cost as much as $31000 to each new home. so, the same time a families facing doubling of sometimes tripling food costs in order to meet the green claimant goals this administration saddles them with an extra $31000 of additional expenses for a single home. families and communities like the one i grew up in cannot afford new claimant costs that increases the cost of housing. which brings me too my last example it appears this administration have been embraced by her housing regulators. last year hud proposed a rule encouraging cities applying for federal funds to remove crime free ordinances local laws that keep a rental communities safe by keeping out convicted criminals.

even worse hud proposed a rule last week that will make it easier for criminals to lip and hud subsidized housing which risks making communities less safe. we need to reverse course and take a different road when it comes to federal housing policy that is why i announced housing is one of my top priorities for this year as a ranking member of this committee. since our first hearing last april i focused my efforts on building consensus around the commonsense non- partisan reforms to all segments of our housing market including my road to housing act. i continue to urge consideration might road into a housing act which takes a conference in view of federal housing policy re- centers support around families, helping those who are homeless or renting or prepared to buy a house. it has a past time to consider my legislation along with other

commonsense and bipartisan proposals that would include real solutions to tackle housing challenges. i look forward to and from both of the witnesses today and i look forward to having an eager conversation about some of the challenges so many americans face as it relates to building on their version of the american dream. >> thank you et cetera scott. adrian todman welcome as his acting secretary of hud. she was confirmed as deputy secretary 2021 and prior to her service their acting secretary with national association of housing and redevelopment. held multiple roles at the d.c. housing authority and served in several career positions at hud. welcome back ms. todman, good to see it. sandra thompson was confirmed fhfa in 2022. prior to leaving that agency she was the deputy director division of housing mission and goals from 2013 until 2021. prior to joining she spent 18 years at fd i see where she held

a number of senior level positions including director of the division of risk management and supervision. welcome back. madame acting secretary, welcome. >> thank you. chairperson brown, ranking member scott distinguished members of the senate banking committee, thank you for the opportunity to testify today on how the department of housing and urban development is executing our mission. i went to thank the over 8000 hud employees across the country who are helping us carry out that mission but first let me say the support of this committee is critical to ensuring the american people of access to housing. they can afford communities that are strong and resilient. thank you for your continued efforts to lead and a legislate on these issues. as you are aware this is my fourth week serving as acting secretary. we are grateful for secretary's extraordinary stewardship on the department in the last years.

her northstar was ensuring we centered our artwork on the people and that star still shines brightly. under the leadership of president biden vice president harris, hud has made a storks drag to include outcomes for the people we serve but we have provided historic levels of rental assistance, expanded opportunities for homeownership supported the creation of affordable homes to rent and to buy. supported resilient communities, or to root out housing discrimination and help to people who do not make a lot of money just get a fair shot. and resources are having a dramatic impact on people of every community from big cities and small towns or rural areas and tribal nations. but there's more under construction 2023 than any beyond record. we are working to build even more. hud helps over 4 million households annually through our rental assistance programs. under this administration have

itimplemented a number of histoc changes we serve more families and support more choice in today's market. hud has provided payments of 120,000 new incremental vouchers and that is a 20 year record. actions are taken to promote homeownership and wealth building has resulted in a higher rate of first-time homebuyers that we have seen in the last two decades. through fha we have supported nearly 1.8 million homeowners with the purchase mortgages including 1.5 million first-time homebuyers. last year we awarded the first ever package of resources to specifically reach people experiencing homelessness and unsheltered settings and rural communities. and it taken charge to protect all people facing housing discrimination. who provided committees with half a billion dollars so far in

multifamily portfolio. and by doing so we are also making much and repairs to units across the country. we have pulled together practitioners, experts and thought leaders who are innovating and executing and researching new solutions we've improved hiring a focus on executing it procurement goals. we have had for clean audits in a row. i'm grateful for the work of this committee and the members of congress you have worked to make resources available to us we can carry out our very important work. we relook ahead hud's mission is critical is critical for young families to buy the first trumpets critical for people of maine lost their job and lost their home and are now on house

to need her help. you make sure to removing health hazards and any home preventing and remedying the impacts of discrimination. senators, over the past years executive branch has been executing her housing supply action plan as an outcome based collaborative effort across federal agencies and at work woi am proud of. housing is appropriate for the biden/harris administration the presidents put forward a vision that builds on our existing body of work. hud is prepared to do our part. chairperson grown, ranking member scott, and distinguished members of the committee i look forward to working with you. thank you and i look forward to your questions. >> think it madam secretary. director thompson welcome provokes chairman brown, ranking member scott and distinguished members of the committee i am pleased to be with you today to discuss the work and priorities

of the federal housing finance agency and operations and activities of art regulated entities. fannie mae, freddie. >> and federal homeland banks. both renters and homebuyers face of challenges in today's housing markets. an adequate housing supply for years of strong home price growth elevated interest rates have contributed to a challenging environment for housing affordability. homebuyers and renters alike face difficulties in finding a place they can afford to live. while housing affordability represents a national problem the impact is most acutely felt in local communities. i have heard about these issues from working families in cities such as philadelphia, louisville and las vegas as well as more rural areas and state such as nebraska and tennessee. i've heard about the need for more work housing which enables teachers, first responders,

construction workers and municipal employees to live in the communities they serve. i have also heard about dual income at renter households for cannot build the savings for they're down payment closing costs of a home purchase i've heard multigenerational families living in homes that are far too small just to make ends meet. much of the ongoing discussion about housing affordability focuses on consumer's monthly payments, closing costs also represent a substantial barrier to purchasing or refinancing a home. recently fhfa and the enterprises have been engaged in efforts to explore sustainable measures to reduce it mortgage close closing costs for current and aspiring homeowners. earlier this year fhfa accepted a pilot project is one component of the broader effort. this pilot seeks to evaluate whether technological advances and the electronic availability of real estate records and

result in lower cost for a borrowers who just want to refinance their mortgage. they already own their homes and will continue to reside in them. appraisals are another important area which they are taking steps to reduce costs for borrowers without compromising safety and soundness. the enterprise and industry have developed several alternatives to traditional appraisals that address capacity, valuation changes, and shorten the process. will promoting fair, equitable and accurate. the finance plant reduced by fannie mae and freddie. >> are another critical component of their mission driven activities. develop the enterprise support almost 2 million families and their homeownership journey last year. some of these initiatives include down payment assistance programs that use of positive rental payment data for renters to establish or improve their credit scores.

fhfa oversight of the home bank system the agency released a report review of the system the report included 48 40recommendations based on extensive engagement with stakeholders across the country. providing stable reliable according to their neighbors supporting housing and community development. series of reforms will be implemented to ensure well-positioned to meet the needs of their members and the communities they served. the authorities outlined represent a portion fh essay to regulated entities in a safe and sound manner. these actions lungs others outlined in my prepared statements, align with fhfa's

mandate from congress. my 30 years as a financial regulator i have long believed safety and soundness and access to credit are not mutually exclusive. but instead, complementary. broad and fair access the stability of financial institutions work together for pillars of the nation's finance system. thank you again for the opportunity to appear before you today. i look forward to work with members of this committee to find effective solutions to the challenges of housing supply and affordability. clicks thank you director. i will begin the questions was senator tester. >> thank you for holding this hearing and think the ranking member in your courtesy i want to express my appreciation to the two panelists. acting secretary todd i want to talk about an issue that i talked to your folks before. i've talked about in this hearing. it is a long-standing problem is getting worse, not better. it has to do with hud fair

market rates, rents i'm sorry rents that if not kept up with the rapid rise of housing prices in montana. thank you means across the state they are not being revised in a timely manner. take a lead voucher from housing authorities with long waiting list. to be able to use those vouchers. how your agency is handling this now is not working. i know this is a problem hud knows about. the are not going to help us in montana. not able to serve the folks in montana they are meant for. and i think it is incredibly important of folks at hud step up and fix these fm ours. this program is going to end up

leaving rural america behind. so, what more needs to happen these rates reflect the actual rent that we have in montana communities that folks can access the housing resources? clicks thank you's editor for raising this issue. as you and your team is probably aware your fair market rents are established by hud and updated yearly. you can keep up with happening in the market. a couple of years ago we did introduce a private data into our calculations there because we have received lots of concern about the date it we are relying on the agency was reliant on was not keeping up with what the market was showing. so i am happy to sit down with you, your team and the housing agencies in montana to learn more about how our current methodology may not be working but for the voucher program and look forward to talking with you

more about that. >> when is the next time rents will be assessed and potentially moved up? >> is reestablished every year so it should be the fall of this year. >> the fall of this year? >> that is correct. i appreciate the offer and to work with me on what is going on in montana. i can just tell you that great falls is the closest major city to where i live. it's not the fastest growing city in montana by any stretch of the imagination reset the economic pressures they cannot use vouchers. just simply don't work. and so i would love to have your address this in the fall of this year. that is six months from now. so, if there are ways you can speed that up or amend or however you can do it i would appreciate if you would let me know. we are here to help. clicks if i act could add, center and also happy to have our teammates and the indian

housing sit out the housing agencies a talk about flexibilities that they may have in terms of using their vouchers. >> this is a problem where we have got a program that was set up and it just doesn't work. >> i understand. >> another question here our housing authorities have another challenges religion the fmr issue. i am concerned it will worsen until it montana communities are left with far fewer housing vouchers and few resources to get folks in home. which you correct me if i'm wrong we are told on the ground in montana the last year hud took 4.5 million in housing choice voucher funds from reserve authorities reserve funds from housing authorities across montana. and it now you are detailing the risk a shortfall? i could have a lot of fellow this question, trust me.

but, if that is true if reserve friends were took and then a short time later us and guess what folks, there is a short while it does not take a nuclear physicist to find out why that happens. so could you tell me what happen, number one. number two if there is a problem to commit to work on the folks in montana to solve that? >> i will commit at the top and i'm always happy to work with the housing agencies on montana who i call former colleagues. i will also share i have to take a look at the reserve pole and request the shortfall you are correct that does not seem to make a lot of sense i promise to work with you in the agencies there so we can correct. >> thank you very much i know have a question for the record for you. >> thank you. clicks a lot of the successes of 2017 tax cuts and jobs act was a legislation i put in at the opportunities and one of the reasons is been so successful.

they are democrat mayor or republican governor they both agree attracting more housing opportunities into the inter- cities and their communities is critical. the event i attended democrat mayor gettys of south carolina said for the first time in almost 30 years he has a chance to build homes within his city the downtown cities because of opportunities so we still see a real opportunity. we note last year of z represented the largest spike in apartment complexes being built in our country. fleeing to more accessible housing. in our country. i think most of us would read the largest issue impact the housing market is lack of supply especially for affordable housing. by road to housing act as a number of solutions that aim to increase supply as well as preserve affordable units already exist. physically at my legislation

makes crucial changes to the rental assistance demonstration program by limiting the cap on the number of public housing units that can be converted under the program. this would create more opportunities for private capitol to help rebuild our nation's aging affordable housing. a question for you secretary todman previously testified the program has been a critical tool to help recapitalize the public housing infrastructure backlog. you also said housing authorities must explore private driven solutions to preserve these units. do you still agree with your statement and do you support lifting the cap on how many units may participate in and be preserved through? >> thank you, senator. one of the things we have seen and the advent of the rental assistance demonstration program is a number of repairs being made to public housing units across the country. and i think we all welcome that. i have also heard from some of

our local and national advocates about their concerns on tenant protections tied to this conversion. we are really excited and pleased at the repair work that has been done and how the program has really turned the tide in terms of underinvestment and it really critical portfolio that houses some of her lowest income families but i would also want to make sure we are making sure those families are being protected as the program grows i'm happy to talk to you more about what an expansion looks like certainly want to make sure we are mirroring what we are seeing with what we're hearing on the ground. which obviously proves lee testified your jeep is a part of congress' efforts to expand that moving to work demonstration program do still agree with your statement you support legislation authorizing the program? >> moving to work is another place we have seen a number of innovations without the

flexibility afforded these agencies are probably would not have been able to adopt across the portfolio. just a couple weeks ago i was in boulder county so we could celebrate the establishment of the last 100 agencies that congress allowed as an expansion to work it might be called r39 and congress authorized us to expand it to another 100. we have added our last 14 agencies and we look forward to their work. i will say moving to work has been critical to look at ways we could continue to house residents safe would we have seen housing production. we have seen new forms of services. we have seen even ways agencies are reducing their administrative costs which i think is something we all would want. i can please support moving to work as it continues to be a source of innovation across the

housing industry. >> about 50 seconds left. another question for you on homelessness? we appreciate secretary budget service to the country. are there any proposals that were not implemented that you would like to implement or do you have any new ideas to help expand the opportunities for homeless population was the greatest spike over the last 12 months basically. any thoughts on how to combat homelessness? >> was lots of thoughts how to combat homeless one is continuing to work with folks on the front line to make sure they're using our existing funds effectively but quite frankly making sure the types of rental assistance and preservation tools we need to try to prevent homelessness to begin with. we were pleased a couple months ago about $3.1 billion in and resources the highest amount

ever to our teams of care across the country's they could continue to do the good work that they do. we were really pleased the additional vouchers congress provided us because we know we have been able to stabilize over 120,000 families across the country. we look for that as a tool of intervention as well. >> thank you. director thompson i know you will spend some time coming up soon. i would love for you all do tospend time in columbia spendig some time working on new ways to combat homelessness. i met with their mayor yesterday they're spending a lot of time investing resources on ways to do so but we love to have your expertise weigh in on that. it's an open invitation to both of you sometime. >> looking forward to up your books thank you, senator scott. senator beutler has been called to reside in senator smith thank you for seceding your time for a moment too. >> thank you mr. chair thank you to senator smith.

i appreciate the chair and ranking member for holding today's hearing out to join my colleagues and honoring the service of secretary fudge and that's our time you all are taking on and continuing leadership an important moment for the american people relative to housing, housing affordability and achieving that thing we call the american dream. it's really to pass on generational wealth across families for director thompson thank you for the previous conversation. i want to pick up where we left off. the analysis conducted by moody's estimates the u.s. economic losses from the recent california flooding at about five -- $7 billion. last week the insurer with the largest market share in california announced it would not renew the home owner rental dwelling other property

insurance policies of 30,000 californians. leaving them financially on the hook for millions or billions of dollars in the event of future climate disasters. i know it is not just california but louisiana, texas, florida are also facing challenges in their property insurance market. in our conversation you mentioned fhfa does not have notice of withdrawing from insurance markets and the downstream effects that this can have it. could you elaborate on these withdrawals impact of homeowners, future homeowners not just in california but across the country? >> yes thank you for the question. property insurance property and casualty insurance is a requirement for any home purchase by fannie mae or freddie. >> and they have to have that in order for fannie and freddie to purchase them. when property carriers withdraw

from large populations it's very difficult especially for first-time homebuyers to purchase a home and have to search for policy to adhere to the requirements that we have that they purchase the loan. it is interesting because we are starting to see a lot of natural disasters and the collateral fhfa is responsible for what wee a 8.4 trillion dollars outstanding in a mortgage collateral. natural disasters impact us greatly. we have a multi family properties and residential properties. and so when there is something that happens it impacts the valuation of our property. from an insurance perspective we are starting to see a number of climate issues or natural disasters take place. there used to be about three issues per year that were costing over a billion dollars.

and now this last year end they year therewere about 28 differes that cost over a billion dollars each. the impact on our portfolio were our only asset is in mortgage collateral either house or an apartment is just phenomenal. we would really like to work with the mortgage industry to address this issue. what we are finding is premiums are going up borrowers are not able to afford some of their monthly payments with little or no notice. we are also seeing a reliance on state plans for insurance. whether it is flood or otherwise that we really want to address as we try to deal with the cost of just owning eight mortgage. we have been working with the insurance commissioners and some of the space dust rick states have natural disasters like california, florida, louisiana,

rhode island. where with naic to try to address this very important issue per. >> into that point just really quickly with my last 50 seconds i do want to offer either or both of you i offer you the opportunity first just to talk about what steps can we collectively hunt and fhfa take in the near term to develop a framework for protecting consumers in the event of natural disasters and insurance provider withdrawals. quick sent happy to pick up where the director left off. i do know hud has limited authorities as it relates to the insurance industry. but we have done is convene an working group to look at with the authorities we have, how can we help consumers? how can we help those housing owners who are saying they have increased operating costs because of outrageous insurance increases. and so, as soon as this week

you'll be hearing hud announce some of the things we can do. there is a whole body of work including engaging with the insurance industry said they can understand the impact on housing affordability. quick senator rounds of south dakota is recognized. >> thank you, mr. chairman i'm just going to follow up to senator beutler's questioning. i think a lot of the challenge and it's not just homeowners it's in a lot of the other areas insurance is finding if you are making property and casualty repairs because of supply chain issue the cost of making those repairs have exploded in time delays have added a cost that is being a board by an insurance industry that is seeing significant cost for those specific items. it is in driving premiums up because of it.

secretary todman i'm thinking out loud about the way to phrase this question to you. we are trying to cut costs wherever we can with regard to the bureaucratic cost of providing homeownership and so forth. there is a discussion most recently we did at a roundtable where we were talking about some of the unneeded paper trails that are required right now. and i would like to read a format for you. you pay very may well want to take this for the record but it is one we can very efficiently and simply may be cut some costs costand a red tape for some fol. we are all discussing housing affordability but there's been a little action on streamlining program requirements and federal regulations. removing unnecessary program requirements will be a great place to start. i like to discuss the

environmental review process. the national environmental policy act must complete the environmental review process and maintain a written record of the environmental review for every project before decisions are made and actions are taken. this requirement includes the use of community development block grant funding for guaranteeing administrative expenses. can you tell me why when a federal program specifically allows a portion of the funds to be utilized for administrative

expenses, hud requires the guarantee to go through the bureaucratic process of actually conducting the review and creating a written record of that determination it does look like some hanging fruit that could be easily eliminated. maybe you know about it right now but if not would you take it for the record and get back to me? >> i accept your invitation to add it for the record. environmental reviews of course are something that we have important. >> probably not as with regard to administrative expenses. >> to respond on the record i certainly would ask our staff to take a look at this with you. >> director, in 2022 during your confirmation we had a good discussion about credit transfers, gse's, and i asked about ways we could incentivize

to create credit risk transfers. the enterprises posted the second lowest credit risk transfer in the history of the program and freddie posted the single lowest amount ever. now, director thompson, i know because we talked about this, you understand what a valuable tool that is, but i can't figure out what's contributing to the trend going on. can you help us with that? >> sure, thank you. and i appreciate the opportunity to talk about the credit risk transfer. he is a huge component of shifting the credit risk of the balance sheets of fannie and freddie, the reason the credit risk transfers were so low in 2023 is that they are based on

the loans purchased by fannie and freddie, and you will room better in 2020 and 2021, we were faced with historic record lows i should say and the acquisitions were at record highs. those were the two longest years of lone purchasers ever for fannie and freddie. the interest rate environment really stifled the acquisition of loans for fannie and freddie in 2023. they went from record highs, so again credit risk transfers based on the amount they purchased, but we encourage them to utilize credit risk transfers. they've been very innovative in this space and it's a measure for safety and soundness which is of paramount importance to us. >> thank you. it appears for a lot of these

folks that don't have another place to go to get a loan, we are seeing these high interest rates are impacting this segment of the population rather dramatically, aren't we? >> absolutely. >> senator menendez from the thw jersey is recognized. >> i hope that you have been made aware of the management of the atlantic city housing authority and what they've been subjected to. residents have been complaining about issues on gas leaks and pest infestation, mold, broken appliances and much more. some all throughout the past winter and of these issues have been ongoing for years. at the authority of self is ripe with management problems including issues with its procurement and contracting procedure that delayed critical fixes to units. residents were instructed to relocate to a hotel with no

cooking devices, no accommodations for their pets and at least one instance for residents disability. many still wouldn't be able to return to their homes. i know hud is aware of these issues because last year the principal deputy assistant secretary described in order to the atlantic housing authority as, quote, one of the worst that i've ever read in my life. your staff briefed that the plan they've developed for the housing authority to fix these issues, however a plan is not enough for these residents that have been living in inhumane conditions for so long especially when the plan is being executed by the same authority that has allowed these issues to pester for years all the while ignoring or retaliating against residents that spoke out about the problems they were facing. the housing authority lost the trust of the residents it was created to serve and that is why

i sent a letter to your predecessor in december calling on hud to exercise its authority to immediately place the housing authority into receivership and rapidly worked to bring relief to the residence. today i am reiterating that call. so, madam secretary, will you commit to personally reviewing the situation and getting back to me what you plan to do to accelerate relief for the residence of atlantic state? >> certainly, senator. i am aware of this issue and i also directed the senior leadership of the office to take more urgent action. we are working with of the leadership of the housing authority and what you've described is horrific and no person particularly the residents of public housing should be experiencing that. >> i look forward to something more than that. they must immediately take over the atlantic housing authority

and every day that we allow the authority that allowed all this to happen to affect the lives of the residents in the way that it has is the day that it becomes the hud problem more so than the housing authority so i will look forward to you getting back to me. >> i commit to doing so. >> madam secretary, i was puzzled to see the president's budget request for fy 25 called for $143 million less man the fy 24 enacted a level for section 202 housing. do you believe the budget request accurately reflects the trends in the market? >> senator, as you may know, hud and of the administration are working under the constraints of the responsibility act, and so there is with a difficult decision to be made we think we put forth a budget that's considers that agreement but also prioritizes the need.

>> all i know is the nation's going pretty dramatically. at the end of the day, if we invest less in the supply of senior housing while the demand is skyrocketing, i'm not sure what that will do in the marketplace, so i urge you to really look at that. finally, secretary thompson, i understand hud is working on updates to energy efficiency and other construction standards for manufactured homes, and i understand that while hud has primary statutory responsibility for regulating manufactured housing, the department of energy has been working in parallel on their own energy efficiency updates. can you share with us an update on your work on this issue? >> the department was compelled

by distillation to carry out its work. they have a draft rule. i am limited on what i can say that i do know that we are trying to marry the pressing need of energy efficiency along with of the housing affordability. and we work with our colleagues at the department of energy to do that. >> on the affordability across the country, new jersey for sure where people stand more of their disposable income on housing and i would hope that this is something that can be accelerated. >> thank you, senator. >> with fannie mae and freddie mac, two things need to happen.

the system more broadly the quickest way is to raise by the capital as they were allowed in the 2008 financial crisis. now that they control so much of the housing market there seems to be a reluctance to relinquish control. i ask myself why. judging by the policies that have been pursued it seems they are viewed by the biden administration as simply backdoors to push the social policy agenda that is well beyond your mandate. on the second point, congress has already decided what type of

mortgage. that is significantly enhanced the supervisory powers of your agency over fannie mae and freddie mac. the problem is the obama and biden administration should never have taken so that they could succeed as private companies. the responsible thing to do for yourself, her secretary yellen and the attorney general, is to continue the work that was begun by the former fhfa director to raise private capital and return fannie mae and freddie mac to the private markets. this would result in a 100 billion-dollar plus windfall for taxpayers, and it could be used to immediately help expand the housing supply and support affordable housing for americans most in need. we talked about this at the time of your confirmation to be the agency had, and our housing markets and american taxpayers

deserve to see these brought to an end and i appreciate your full attention to this in the time you have remaining. thank you. >> thank you, mr. chair. >> thank you, senator. senator smith of minnesota has arrived and has been kind in dealing. >> thank you so much both of you for being with us today. i appreciate it. so, everybody we know, i think we are here today because we believe that everybody deserves a safe and affordable place to call home and we also acknowledge all of us that for far too many families this is out of reach and i'm very grateful to the biden administration and chair brown's leadership really bringing attention to finding solutions to these challenges and of course housing is incredibly complex and nuanced. it's much driven by the private sector and also by local decision-making when it comes to zoning for example, but i think

that we could all agree we need to focus on boosting housing supply and also on preserving the stock that we have. we had a very interesting hearing in my subcommittee just earlier this week where it highlighted the need to preserve. my question is for you, can you highlight for us how the department has been working on this issue of housing by especially housing for middle income people working in low-wage jobs also. >> absolutely thank you for the question and your leadership. they've been very busy the past three years not just carrying out its own work making sure that we are executing on the vouchers that we have received and making sure we are modernizing the rules, which i know so many people lean on to make sure we are building. but we have also been working

collaboratively with our sister agencies and treasury on the new federal financing bank with sharing and removing some of the deadline that was tied to that initiative so that more can help support and also working with our colleagues on the physical recovery act and repurposing those funds for the gap financing and the critically capital needs on the ground. so we have been busy and we think that with the umbrella of the presidents housing supply and action plan we have been acting as one government to drive this issue. >> the administration has made proposals to help expand housing supply and particularly the innovation fund for housing expansion. can you talk about how that would help and power of the local solutions to increase housing supply? >> thank you and i think you are referring to the budget for 2025

the innovation fund. it suggested that we want to make sure we are including the gap financing thinking through the pro housing work we are very excited to have the housing program and we will be rolling out some of the recipients of that sometime this spring. it is meant to be a program meeting localities where they are and inspiring them to be able to create the local solutions to build housing and preserve the housing that they have. >> thank you. i also want to talk with you a bit, we have had quite a few conversations about issues. i know this is something senator cortez musto and senator warren also pay very important attention to. we know that there are significantly higher rates of tribal homelessness and overcrowding which is almost a bigger problem because now is

more than one family crowd into shelters that are not merely large enough for them and the issue of the substandard housing, the senator and i hold a subcommittee on this last year and we've been working with of the administration on how we can respect tribal sovereignty and partner as we work on these issues. can you talk about how the department is addressing this issue? >> you will be happy to hear since i took on the job as deputy secretary i've been in robust conversations with of the nation leaders about what their needs are and i've heard and earful as you can imagine. one of the things we have been doing with the funds congress has given us to help on housing and community development is working with tribes on how they are able to use that money swiftly. in addition to that, we've created an advisory committee and the department for tribal leaders, and we had two meetings and we will have a mother

shortly. are there, we have consistently looked to the leaders of the tribal nations to tell us what can we be doing better for the government to government relationship into those conversations continue. i've been working personally with some of the leaders to cut the red tape. >> thank you for your work on these important issues. >> thank you, senator. >> the senator from north carolina. >> thank you mr. chair and both of you for being here. director thompson, last year fhfa directed freddie and fannie to make changes to the pricing adjustment matrix. you said these updates were intended to allow them to further build capital and reduce taxpayer risk. i'm trying to get my head around this. these changes reduce aspects of the risk-based pricing

relationship and in common with loan to value they seem to be increasing it to lower risk persons. the did i get that right or what am i missing? >> thank you for the opportunity to clarify the misunderstanding that permeated about some of the pricing changes that fannie and freddie undertook. we have been working diligently to ensure fannie and freddie are doing all they can to fulfill their mission on safety and soundness and making sure that they are fulfilling their mission in terms of facilitating those communities. we eliminated the price adjustment for the upfront fee for all borrowers across the country for borrowers that had

incomes of 100% or less. i can assure you of all the changes that we made do not result in borrowers with high credit scores. we continue to have a risk-based pricing and what happened in the discussion is when you have a loan to value that is 80% or higher, you have to purchase a credit enhancement. we don't add to that into the calculation but it's still risk-based pricing at the end of the day and i can assure you the risk-based pricing as soon as possible is ready and there are provisions to make sure that lower income borrowers are, and borrowers in rural communities across the country don't have to pay upfront fees.

>> this could be a very complicated discussion. it's hard to simplify into five minutes but i'm going to submit this matrix for the record and have, can i get your commitment to respond back to a very specific set of questions? the thing i'm still trying to get my head around, if part of this decision was used as a basis for raising capital, where is that coming from? >> the chart reflects a number of changes that the enterprises undertook. the increased prices on super conforming loans, that's one of the first changes we made. we also increased prices. >> what drove that decision? >> the conforming loan limit well over seven digits.

the private market exists to purchase those jumbo mortgages and so to the extent the enterprises are purchasing those loans, people need to be able to pay the additional fees. >> are you saying the policies implemented in the last year in your opinion and the fees associated with them were driven by actuarial decisions? >> we are also looking at the capital requirements for everything we purchase and we've also raised fees for second homes. hispanics of the reduction in fees for people with high risk ratings were because they were being overcharged? >> overcharged because we were not capturing the insurance they

have to have. i have a long series of questions. i will say we reached out and tried to get a consultation to see if your imposition of this was in violation of the rulemaking and we found out independently you're given latitude at the conservatorship model. to wonder whether or not we should be more tailored and what authorities you have within your role as conservator versus some of these policy decisions but thank you for being here. i'm going to submit some questions for the record according to backlog as well. >> thank you mr. chairman.

in 1932, congress created the federal home low bank system to tackle the biggest housing crisis of the last century, the great depression and the idea was simple, the federal government offered help in the form of implied government guarantees, favorable regulatory treatment and special tax status. then in return they would provide liquidity to the members. in this critical moment, they are missing in action on their affordable housing mission. last month of the congressional budget office released a report that first time put a number on how much the fhlb is received in public subsidies. fiscal year 2024 alone that

number was a whopping $7.3 billion. director thompson how much did they spend? >> approximately 390 million debate a. >> that means the vast majority of the subsidies and the government poured into the fhlb where somewhere other than to affordable housing, only a tiny fraction went to affordable housing. so where did the taxpayer money go? in the same year, how much did the fhlb spend on dividends for their members for banks and insurance companies? >> 3.4 billion with a b. >> just so we are clear, they

spent eight and a half times as much on dividends to their members than they did on affordable housing. i think that's right. but not all of those federal dollars, those taxpayer dollars went to dividends. according to the gao, the fhlb's went tens of billions of dollars to prop up silicon valley bank, signature bank and first republic bank before they failed. director thompson, fhfa is the primary regulator. do you agree that it is important to clarify that the mission is to provide liquidity for housing and community development to prop up failing banks and hand out dividends?

>> absolutely. thank you for the question. we conducted a review of the home loan bank system and sessions around the country. through affordable housing development and community development and there is a huge affordability issue, huge supply issues and they are well positioned to do a lot more and that is one of the recommendations from the report. >> if they are taking the money and not spending it to accomplish that, i think clarifying the mission of the fhlb is an important start. who lines up for these federal subsidies? these subsidies are to promote

housing, but in the last five years, 42% of members did not originate a single mortgage, not one. 42%. so how did this happen? it turns out under the current rule members only need to hold about 10% of their assets at the time they apply to join in fhlb. once you're in, you're in a and you can get out of the housing finance business while you take advantage of the government subsidies. director thompson, should the fhfa changed the rules so the members must hold at least 10% of their assets and residentiall mortgages on an ongoing basis in order to remain eligible for the financing? >> that was one of the recommendations in the report. we are going to promulgate rulemaking sometime this year to talk about membership, to define

what the goal is of the membership and to also ask questions about what that threshold should be because you will have a situation like one of the three bank failures where you start out with the 10% to meet the requirement and then the business model changes and there is no ongoing checks to access the system so that is rulemaking. we will be very transparent and we look forward to engaging in that. >> i strongly urge them to issue the proposed rulemaking to address the mission and membership as soon as possible. >> they should be tackling the crisis, not blowing out corporate welfare to these giant banks and members thank you mr. chairman and to the two witnesses for being here with us

today. i would direct my questions to director thompson. one of the body as he is that i have we shouldn't be discriminating based on race. we should treat people based on their individual characteristics and not dole out government favors were consequences because people have their wrong skin color and i assume you share that conviction as well. i want to point directly to a particular policy of your directorship. the announcement followed by august, 2023 requiring fannie and freddie among other things to advance equity in housing finance. and in particular the way they've applied this particular directive worries me.

there's a grant as i understand it that is strictly targeted at a black and brown americans. again i don't think we should be doling out the favors based on skin color, but i'm curious am i right about that, does the plan target black and brown americans and second, does that program have any income requirements? >> thank you for the question. everything that they do complies with the law. we have the responsibility to ensure the fair housing access for everyone. you talk about the affordability issue which is the biggest issue it has today it didn't miss any and there are particular communities underserved and huge and we've asked them to come up with plans not just for

underserved communities and specifically the equal access plans but tribal communities, native american communities because we want to make sure that no one is left behind. we can't let the housing market fail and there is no one-size-fits-all. i would say many of the barriers identified for black and brown borrowers applied to other cultures as well and i will give you an example one of the things -- >> sorry to interrupt but to specify this a little bit, there's a down payment system slush fund as a part of this particular equitable housing finance plan. my understanding is black and brown americans are eligible for this but it's not income based.

>> our programs are not race-based. the programs that are in the special purpose credit program what i think you are referring to our location based end of and thoseare the programs they . they do purchase loans from other institutions. >> that makes me feel good. there's not a down payment assistance program that you can only apply for if you are black or brown. there are programs that apply to many fannie mae programs, home ready programs. >> is there one that discriminates based on race that only applies when you have a specific? >> for the enterprise programs you apply for those programs if you live in a certain area. its location based it's not race-based. >> is there any income requirement? >> i would have to get back to you on that.

>> the thing i guess i find somewhat troubling about this stuff is i agree there's a lot of black and brown americans left behind in the housing market and we want to guarantee access for everybody but you can accomplish these things very often by targeting at a particular income category and of course you're going to catch up a lot of black and brown americans and a lot of other racial categories who don't have high income and it's a better way and also much less illegal to do housing assistance and targeting specific racial groups is not something we should be doing. >> i want to say we are not doing anything illegal. we think these housing programs should be available for everyone. we have programs based on income and we have these programs that

are based on location. >> thank you. >> senator van holland from maryland is recognized. >> thank you both for your testimony and service. a couple of questions for both of you on how we can use programs under your jurisdictions to help families reduce their energy costs, whether they are homeowners or renters, so let me begin with you, acting secretary. i know last year you undertook a review of the building codes under the security act of 2007 and i understand from the department of energy analysis but also from the preliminary

determination that was also made by the department of agriculture. they save households money because the cost savings on energy bills or greater then the relatively small upfront cost of building to the latest code and that cost of course is spread over a 30 year mortgage. particularly for the low income households that we know are spending way too much of their paycheck on energy costs. in my state of maryland the update standards boost resiliency and efficiency for new homes and what it delivered a net savings of over $5,000 for maryland families over a 30 year

mortgage. so, could you tell me where he stands right now in finalizing this code determination, what is your plan and timetable? we put a proposed rule out and i think you are referring to some of the elements of that. i think what we've tried to do very carefully is look at the pressing needs around energy efficiency as you articulated as the savings to homeowners and

renters and looking at its intersection with affordability. one of the things we are going to be relying on as recently the administration announced some of the epa funding on greenhouse gas emissions and we will be leaning in and i know the local localities will be leaning in on some of those to make sure we are carrying out the energy efficiency work we all value. >> thank you for mentioning the recent announcement, something i've worked on for over a decade and i was glad to see it come to fruition and that could be an important complement to these other efforts. so director thompson, obviously fhfa has a role to play in terms of your public component of the secondary mortgages, so could you talk about your plans to adopt similar building standards which would also have a greater

impact in terms of the number of homeowners and renters who would be able to save on their energy costs? >> the enterprises have long been proponents of providing energy efficiency whether it's reductions were energy so they do give credit for buildings that have those efficiencies already built in. we are undertaking and an analysis right now to look at the building code issue. the enterprises are working with stakeholders. this is a priority for us and we should probably have some recommendations coming forward on what we are going to do by the end of the second quarter. >> i appreciate that and i think the word that hud has done is

provide a good model so we don't have to reinvent when it comes to the standards. i will submit a couple of questions thank you both for being here today. it's clear the country is facing an affordable housing crisis. high interest rates and inflation with soaring construction costs and low inventory have put homeownership is further and further out of reach for hard-working americans. this crisis in my opinion has only been intensified by economics. the reckless tax policies overregulation and misguided efforts that prioritize things like the green new deal or like my colleague pointed out over the safety and soundness of the housing market and our economy,

today regulatory costs make up nearly 24% of a new homes price. specifically to address this very issue not only is homeownership more out of reach, but not a single state in the country even has an adequate supply of affordable rental housing for low income families. i could go on. there are real problems facing real people, and we have to focus on real solutions. unfortunately, what we've seen from this administration is fast tracking and actually risked rik putting the economy at greater risk. and on that, director thompson, hearing last may you are committed to making sure pilots or public and that people know that there is more transparency going on in fannie and freddie.

so my question for you, is there a reason that your agency changed paths and did not go through the public notice or comment period before issuing the recent title insurance program? >> thank you for the question. first i would like to say safety and soundness grounds everything we do with regards to the title pilot, we do have a title pilot transparency page and receive the pilot from fannie mae -- >> when the pilot went through an analysis we didn't do

anything different. >> are you going to allow the public sometime to comment on that? >> we are still in the process surging for a vendor to help digitizing to figure out how they can access the title records to issue a solicitation of multiple vendors. >> talking about the same thing, this applied to certain low risks so this isn't going to help with people that are not currently homeowners and want to achieve the american dream. your agency did its products and activities rule which my understanding is meant to bring transparency to new initiatives. so it seems it's going on inside this initiative. >> this came in as a credit

underwriting decision because what it will do is waive the requirements, which is similar to what we've done -- >> i'm so sorry. i only have one minute. if you would commit to making sure there's a public comment period and we have the opportunity to weigh in. i want to shift my focus. thank you for being here today. i understood you have been in the housing space and you were included in the moving to work program but obviously when the pandemic hit, we decided, or had decided to postpone that program. would you agree committed to engaging now that the pandemic is over to help people not only get on their feet about have an opportunity to actually succeed? >> senator, you will be happy to hear that we have been working quickly and urgently to carry out congress is mandated to expand the moving to work agencies. once we completed that task just two weeks ago.

>> i believe if you are in able-bodied american without dependents, working, training, volunteering, if it is to receive government benefits that there is a dignity that goes along with that. in my last few seconds i want to underscore the magnitude of that multifamily loans that will be needed and will need to be refinanced over the next couple of years but can't at the current interest rates. so i would like to work with you and urge you both to revisit the capital framework and its lack of countercyclical adjustments for the multifamily. my staff will follow-up with you but i look forward to working with you both. >> the senator from georgia is recognized. >> thank you so much, chair brown. according to the atlanta journal-constitution, there are just a handful of private equity firms that individually own more than 10,000 single-family homes around atlanta and during this time of elevated and in the

housing crisis, large institutional investors and wall street private equity firms from outside are effectively boxing first time generational homebuyers out of the housing market by gobbling up the available housing stock in atlanta. this is particularly egregious when you think about the role that wall street played in what ways will just a few years ago with the crash. this is also why i previously introduced to the housing market transparency act that would provide greater transparency over who actually owns the property is built under the low income housing tax credit which includes significant private equity investors. i would like to ask the honorable acting secretary thank you for all the work your agency has done to make homeownership

more affordable for americans, but i'm troubled by the equity ownership in the housing market. what steps is your agency taking to ensure fannie mae and freddie mac are not passing economic benefits intended to private equity first? >> thank you for the question. fannie mae and freddie mac do not engage in institutional investors for single-family rentals and there was one transaction in 2018 and they decided to not engage in those activities. we do not permit institutional investors. there's a number of investors that fix, these are more mom and pop as opposed to institutional investors like fannie mae has a requirement that one person can have ten properties like one individual and freddie mac one

person can have six, but again those are more local mom and pop they are not institutional investors. >> so are there steps that your agency can take to protect ordinary folks from this increase in private equity in the marketplace at large? >> for those that fannie and freddie won't purchase those loans because they are ineligible to make those loans, so one of the things that we do with our reo portfolio is we have a 30 day first look period where investors are not able, the house was on the market and if you have to be owner-occupied or a community development investment fund or nonprofit to purchase first to get 30 days before the house was on the market, so those are some of the things that we have done. >> so my larger concern obviously is where that ordinary hard-working american family at

home across the country have access to the american dream and this is what allows for generational wealth to pass. as home prices have increased, the ability for many to purchase affordable homes has moved out of reach. this is particularly true for first-generation homebuyers. on top of this, we see a racial homeownership gap that actually widens in 2003. only 44% of black americans own a home in total that is almost 29 percentage points lower than white americans. acting secretary, under president biden's federal housing agencies have been committed to providing resources for new homebuyers and i was glad to see the president call on congress to pass the $10,000 tax credit for first-time homebuyers. can you detail why this woman

credit is important and who is it targeting? >> thank you for that question. and i think that you provided the facts very clearly in terms of who will be most assisted by this type of investment and first time homeowners and i will take it to the next level first generation homeownership which was a part of the president's proposal and the 2025 budget proposal. this is critical. we know that homeownership remains the number one way that the middle class is able to generate and sustain. and as you said 44% have access to that so we know by providing concepts like first generation down payment we know what that means in the long term. we know that having a tax credit that allows those families that are locked out of homeownership,

but it means to sort of have access to that type of subsidy but we also know we have to do more as a country and we are doing more as an administration to make sure there are units to purchase and then we can show that we can encourage the increased supply of starter homes so we are looking at this and we look forward to sharing more with you and your team. >> that is exactly the work my act is focused on helping these first generation homebuyers and to support them with closing costs et cetera. thank you for your work on this and i look forward to working with the chair and the committee to get legislation signed into law. >> our conversation yesterday when we talked with of the acting secretary, we spoke about that bill and our work on it and

how the secretary especially as we talked it was such a high priority for her if we are ever going to end the wealth gap in this country surely the best tool is homeownership and what this legislation can do. senator cortez musto is recognized. >> thank you, mr. chair to both of you. i want to say thank you both to you and your staff for all the great work and partnership that you've done in nevada around affordable housing. thank you. i know you're there. i've talked with both of you. your staff is incredible. so thank you. let me start, director thompson, with you. i also have to thank you and your staff for the insightful and thorough review of the federal -- i think you and i talked about it from the very beginning and the challenges that i felt we needed to address particularly around the core mission of the federal homeland banks which is housing and community development.

so, you did in an analysis many of the changes or recommendations in your report, recommendations or actions that the agency can take on its own but there's also recommendations of actions for congress, so i want to talk a little bit about those. can you tell us why the federal agency recommends congress improve access to two of these systems for nondepository community development financial institutions? >> sure. thank you for the question. we spent a lot of time on the home loan bank review, and we got a wealth of information and as you mentioned some of the recommendations are statutory and some we can do on our own. what we found in our discussions is cdf eyes play an important role in local communities and communicate with all housing stakeholders in a way that is just so unique and helpful and

produces results especially in underserved and low to moderate income areas and we wanted them to have the same benefits that other members had because of their members are able to commit especially if they have i think the limit is small community institutions they can pledge collateral, but the cdf eyes are not able to pledge the same type of collateral and so we wanted to make sure there was. he because we are talking about small institutions and members and we want to make sure there's. he throughout the membership, so one of our regulatory acts is to make sure that cdf eyes have the same benefits as other small institutions like community banks so they can continue to build and provide affordable housing in their communities. >> thank you. and we know for decades the banks set aside was 3% of their

net revenue, 10% for the affordable housing program and 20% to repay the savings and loan bailout. those payments never threatened the stability of the system. why do they recommend that the assessment for the affordable housing program be increased by at least 20%? >> thank you again for that question. for the very reasons you mentioned right now the home loan banks are setting aside a 20% in remained earnings that counts towards capital but they are all well capitalized and can well afford to provide at least another 10% to help with this housing crisis that we are having throughout this country. they are in 11 districts around the country serving all the states and counties and they could do a better job in providing housing development and affordable housing and community development. i would say they are starting to increase their contributions but it would be really helpful to

have the statutory contribution that the requirement increase from 10% to at least 20%. >> and we both know that they earned 6.6 billion, 6.6 billion last year and we said this already unlike fannie and freddie, they do not pay taxes, so i would ask my colleagues to join me on legislation that addresses some of the recommendations you've talked about that are so essential to bringing more dollars into the communities for affordable housing. i only have about 40 seconds left. let me come acting secretary come ask you this. can you talk about the proposed rule to streamline the program? >> we are -- it's still in the agency process. i'm happy to say that we are doing it. one, i think it is a long time coming to modernize the program the largest grant program it has to make sure we have low to moderate income homes and

opportunities. we are almost there across the finish line in getting the rule out for comments and look forward to working with you on how we did. >> your staff has been great. it was part of the subcommittee hearing that senator smith was just talking about and there was a conversation how important the program is to building affordable housing in communities across the country so thank you for your work. >> thank you. >> thank you senator cortez musto. you're almost done. i have a series of questions and sometimes waiting until last i can get a better overview of the committee and the questions and what we want to talk about so starting with the secretary. we talked about toledo ohio and the city cited for deplorable conditions, ashland manner and

covenant house. i commanded that hud a co-op to cooperate with officials to fix the situation. hud has been working with the city of toledo. will you commit in front of the committee publicly to contribute to work to see the job through to fix the conditions and to hold the landlords accountable? >> absolutely. and i made that commitment to myself. >> i will be holding you to that. it never should have got into this situation. no one should have to live that way. i want to follow up on what they are doing to better identify the conditions and before they heard residents in communities as they did in toledo. count on that. director thompson, turning to manufactured housing, i've heard from ohio seniors who live in communities financed by freddie and fannie who are forced to go to extreme lengths to keep up with the rising rent and fees out-of-state investors are

charging. we are seeing more and more out-of-state investors as you and i have talked in the past on manufactured housing. how do we change the system so when fannie and freddie are getting credit for providing affordable housing residents can actually afford their rent and are not forced to choose between their homes and buying food or medicine. >> thank you for the question. we are working with them and we believe there ought to be a penalty saying you should not get credit for the situation and the circumstances where homeowners are not getting updated property maintenance or the living conditions that are just untenable. so we are thinking about ways to address those issues. as you know, for the manufactured housing communities, there is a set of protections that are required for anyone who gets a loan, who has a loan for fannie or freddie on the manufactured housing

community, and we also have compliance agreements every year to ensure that they are complying with the protections that are in place. in addition, both fannie and freddie are getting ready to establish oversight so they can make sure that these properties are in good condition and that people are living in safety from that affordable housing. there was a lag during the pandemic where inspections were not taking place and we really have a lot of catching up to do and want to make sure we are doing our part to make sure americans across the country especially in manufactured housing communities are able to live with dignity and respect and in the conditions that are safe and decent. ..

had the highest number of foreclosures than any zip code in america and city and neighborhoods in cleveland throughout ohio. her clothes were poisoned by it led to know that their efforts like red safe cleveland coalition ohioans are working to make progress and protect kids. your testimony proposes improvements to hud healthy homes program. want to follow up with you on how the supposedly full support efforts like these to prevent lead poisoning. we'll back to about that thank you. director thompson, after 2008 crisis fannie and freddie briefly provided financing to help investors buy up and rent single family homes. some of the financing is still benefiting the company called vine brook which owns thousands of homes in ohio is a track record of working properties into the ground and affecting families and driving up local housing prices its particular problem in cincinnati. i have visited some of those houses and neighborhoods.

you commit today, director, fannie and freddie will not do any new financing for investors in single-family rentals who so often exploit tenants and write up a rent and housing prices? like senator, thank you for bringing that to my attention. after the experiment or pilot fannie and freddie did in 2018 we have prohibited them from working with institutional investors. what you have described will we will absolutely follow up and make sure that this not happen but will follow on that particular property. >> i will continue to watch that. and you know we are watching that. i preach to the public service of both of you. that kind of predatory business model needs to be rejected always by anything the government any influence the government can have so thank you. thank you to the two witnesses today for your patience. think of your testimony. thank you most especially for your public service. they are due one week from today to the witnesses we have 45 days

to respond thank you again for that but that the hearing is adjourned. [background noises] [inaudible conversations]

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