2025 budget request. later at 2:30 p.m. senate p.m. a senate judiciary subcommittee amines concerns with replicas that areade to implicate a a voic o other like this to artificial intelligence. you c also watch our live coverage on the c-span l video app or online at c-span.org. >> c-span is unfiltered view of government. we are funded by these television companies and more including comcast. >> are you thinking this is just a community center? its way more than that. comcast is partnering with 1000 community centers to quit wi-fi enabled lift zones so students can get the tools they need to be ready for anything. >> comcast supports c-span is a public service along with these other television providers giving you a front row seat to democracy. >> the acting secretary for the department of housing and urban

development and the director of the federal housing finance agency testified on increasing housing supply and reducing cost for borrowers. this before the senate banking committee. it's one hour 45 minutes. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

>> the committee on banking housing urban affairs is called to order. thanks for theo two witnesses joining us. home is a lot more than four walls and roof. home is where you go after long day at work. home is where your kids play and do their homework. home is where you plan for the future and build wealth. home is a millions of families join the middle class. our homes are an anchor in our lives, but for too many families around the country i home they can afford to c build the life around just just out of reach. i hear in ohio. i hear from people in lima city summer to why growth in mansfield were a new building

with feet for 54 apartments for working families just opened. for the 64 apartments they had 511 interested families. i hear it from rural washington county in southeast ohio. marietta l pre-church down where they struggled for years to build 48 homes for seniors. i threw it in franklin county in central ohio, columbus, with a population has grown by 40% o more than 1.3 million people. that housing supply hasn't kept up and prices have been rising for years and years. with more people with not enough home for homes, 40% of renters in this country pay more than they can afford for housing. and that county with its world-class schools and skilled workforce, its grey colgan flight only will continue to cook. i hear the stories from across ohio. it's not just happening in ohio. whether you're in downtown columbus or minneapolis or wirral south dakota or wyoming or south carolina, the problem

is too expensive. it has been for years. it's been for far too long. one big reason is we don't have enough of it for the past decade, the past decade rick has got up and up and up. one in four renters pay more than half their income for rent, and when more than half of your income goes to read, every month it's hard to juggle all the bills you already have let alone say for a down payment. high rent stops people from becoming homeowners. so many families think if i i could come up with a down payment. the money for a down payment is what stands between millions of americans the dream of homeownership home ownership and building generational wealth.ng that's why my bill to support first-generation homebuyers down payment toward equity act with senator warnock and the helper act aimed specifically at, the down payment towardd equity act is broader. the helper act for teachers, firefighters and police officers to allow them to buy homes in their communities and other

sources of down payment assistance. all of that is so important. secretary todman, director thompson, you know these challenges because your agency's are at the center of our office of her efforts to lower the cost of housing.. your agency's don't build housing budget on the front lines of our housing markets. your j job is to make sure thers affordable financing for the housing the builders and housing providers create, that families can get a mortgage to buy their firstom home, and that as americans get older they can still it safely in their homes. and both of your agency's about changes that should help increase housing supply and bring down costs. following call from senator reed and me and others, hud acted to improve access to financing for affordable rental housing through fha and theci federal financing bank. the fall of housing in state build and preserve more affordable housing for renters across the country. hud's long-overdue update to loan limits for manufactured housing, its new guidance to support conversion of all office

basedom into homes will open up new housing options, especially in cities like cleveland. you put the limited upfront fees the fannie and freddie have in the past charge low income first-time homebuyers and borrowers who could not afford a big down payment to begin with. you also refocus fannie and freddie and the federal home loan banks on the rolls notches in financial markets markets but in helping to support housing for families and communities need. but the fact remains housing prices are still far s too high. they have been for years and years. it will take all of us working together housing provider, federal, state and local governments to lower costs. af-pak and fhfa need to do more to be vigilant and ensuring that tax money is actually serving families, not enriching shady landlords and wealthy investors. in ohio and around the country wall street firms and other outside investors swoop into community is, they buy properties, they victims, 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. to ensure that all i 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 into committees and morc and more seeds and cams are making changes like updates to zoning, , like shortening lengty approval process, processes to open up housing come to open up opportunities for new housing,, expand access to affordable homeownership. hud is a critical part inrs supporting that work. earlier this year franklin county commissioner kevin boyce testified in the said on behalf of the national association of countiesof about their critical role that homes cbg and the housing trust fund play in helping counties of every size to address housing needs. local committees depend on this partnership or even with more housing some families working low-wage jobs and some seniors

on fixed incomes still will not make enough to afford -- [inaudible] >> sorry? what was at? >> sorry. >> assistant programs are critical to keep with affordable. [inaudible] >> you've never done this. >> well done. [laughing] >> i'm almost done, senator scott. >> take a time, mr. chairman. >> hud needs make sure they would effectively and efficiently to serve on committees and protect our investment. congress need to do our part. last but this committee had hearing a legislative proposals to help expand ourar housing supply and bring down the cost of housing. we must continue our bipartisan work to move forward, since proposals that will help expand housing options and reduce costs. i look forward to continue to work with ranking member scott on this committee toward that goal. i t look for doing today from te two leaders before it's about what they have done, what more

they can do, what resources they need to get their input on what congress can do to make housing more affordable for renters and for homeowners. ranking member scott spec thank you, mr. chairman. thank you for serving you. acting secretary, congratulations. 30 days, long time. so we expect you to be completely prepared for everything were going to talk about over the next couple of hours. likely. thank you, mr. chairman for holding this hearing. i been asking for about a year to have both of you in front of us, so it's certainly something that i think it's absolutely essential for us to be able to hear from our regulators as often as possible to achieve the goal of american homeownership because mark megan homeowns not just homeownership. it is a fact in the eyes of so many americans the american dream. if you're going to close the wealth gap that we talk so much about that is so processing, one of the wasted it is by creating equity and creating equity would come to membership as much as it does any other place in our economy, so thank you both for being here.

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 t >> i mean, this is a problem where he got a program that was set up and just doesn't work. >> i understand. >> okay. another question here. housing affords a month and have another challenge related to the fmr issue. i'm concerned the problems together willon worsen until the left with far a few housing vouchers and few resources to get folks into home. you correct me if i'm wrong, but we arena told on the ground in montana last year hud took 4.5 million housing choice voucher funds from reserve authorities, from reserve funds from r housig authorities across montana. and now you're telling them there's a risk of shortfall. i could have a lot of fun with

this question, trust me, but if that's true, if reserve funds were took and that a short time later with a guess what, folks, you got a shortfall, it doesn't take a nuclear physicist to forget why that happened, , oka? so could you tell me what happened? number one. number two, if there's a problem you commit with working with the folks a montana to solve the problem? >> out commit at the top and say always happy to work with the housing agencies on montanus o i call former colleagues. i'll also sure that i have to take a look at the reserve pool and then to question the shortfall. you're correct that doesn't can make a lot of sense but i will promise to work with u.n. agencies of their so we can correct. >> thank you very much. i have a question for the record for you. >> senator scott is recognized. >> thank you, mr. chairman. one of the success of the 2017 tax cuts punjab zach was the legislation that i put it there

the opportunity zones. one of the reasons why it's been so successful is what you democrat mayor or republican governor we both agree attract more housing opportunities into the inner citieshe of their communities is critical. i think of the event i attended with democrat mayor gaddis, and we said that the first am almost 30 years he had a a chance to build homes within the city. the downtown area of the city because that's an opportunity zone. we still see a real opportunities. we note last year posies represent the largest spike in apartment complexes being built in our country. leading to more accessible housing. certainly you could live in in our country. i think most of uss would agree the largest issue impacting the housing market is like a , especially for affordable houses. my road housing act includes a number of solutions that aim to increase supply as well as preserve affordable units that already exist.

specifically, my legislation makes crucial changes to the rental assistance of demonstration program eliminating the cap cap a nf public housing units that can be converted under the program. this would create more opportunities forop private capital to help rebuild our nation's aging affordable housing. question for you, acting secretary todman, when you breathe is a question hundred testified that rad program has been a critical tool recapitalize the public housingp infrastructure backlog. you also said housing authorities must explore private driven solution to reserve these units. do you still agree withts your statement?t and you support lifting the cap on how many units may participate in and be preserved through rad? >> thank you, senator. one of the things we've seen with the advent of the rental assistanceen demonstration progm is a number of repairs being made to public housing units across the country.

i think we all welcome that. i've also heard from some of our local and national advocates about the concerns on tenant protections tied to these, tied to this conversion to rad. i think we're really excited and pleased at the repair work has been that another program has really turn the tide in terms of underinvestment in a really critical portfolio that houses some of our lowest income families. i would also want to make sure we're making sure those lowest income families are being protected as the program grows. i'm happy to talk to you more about within expansion looks like but certain one to make sure we are mirroring what we are seeing with what we hearing on the ground. >> you've previously testified you were deeply supportive of caucuses efforts to expand the moving to work devastation program. do you still agree with your statement to support my legislation authorizing the broken? >> open to work is no place we

sent a number innovations that without the flexibilities afforded these agencies we probably would not have been a able to adopt across the portfolio. just a couple of weeks ago i was in boulder county so we could celebrate establishment of the last, of the 100 agencies that congress allowed as an expansion to moving to work. you might recall there are 39. congress authorized us to expand it to another 100. we've added our last 14 agencies to the moving to work club and we look forward to their work. i will say that moving to work has been critical with really looking at ways that we can continue to house residents safely. we have seen housing production. we have seen new forms of services. we've seen ways that agencies are reducing the administered costs which i think is something that we all would want. and so i am completely support moving to work as it continues

to be a source of innovation across the housingat industry. >> i have about 50 seconds left. i'll have to get to ms. thompson next day. another question for you on homelessness. i know we appreciate secretary fudge service to the country. are there any proposals that were not permitted that you like to implement or give any new ideas to help expand the opportunities for homeless population? we saw the greatest bike and w homelessness over the last 12 months basically. any thoughts on how we can combat homelessness? >> i think there's lots of thoughts and how to combat homelessness. one of them is continue to work with folks on the front like to make sure they're using our existing funds effectively, but quite frankly making sure we have the type of rental assistance and preservation tools we need to prevent homelessness to begin with. we were pleased just a couple months ago together localities about $3.1 billion in resources,

thighs, ever, to our continued of care across the country so they could continue to do the good work that they do. we are really pleased the additional vouchers congress provided as because we know we been able to stabilize over 120,000 families across the we look for that as a tool of intervention as well. >> ten seconds. doctor thompson, i know you'll spend some time in south carolina coming up soon. i would love for you all to spend some time in columbia, south carolina. columbia is spending some time a new way to combat homelessness. i met with their mayor yesterday and they are spending a lot of time in investments and resource of ways to do so. we would love to have your expertise way in on that switch an open invitation to both eve to spend some time in columbia south coletta. thank you both. >> looking forward to. >> senator butler has been called to preside and sources, thank you for seeing, seating her time for moment.

senator butler. >> thank you, mr. chair and thank you to store smith. i appreciate the chair and ranking member holding today's hearing. i want to join my colleagues in honoring the service of secretary t fudge and her time n the role and you all take you on a continuing leadership, an important moment for america, the american people relative to housing, housing affordability. and achieving the thing that we call the american dream. the ability to sort of pass on generational wealth across families. director thompson, thank you so much for the previous conversation, and i want to pick up where we left off. the analysis conducted by moody's estimates that the u.s. economic losses from the recent california flooding at about five to $7 billion. last week, the insurer with the largest market share in california announced it would not renew the homeowners rental

dwellings and other property insurance policies of 30,000pe californians, leaving them financially on the hook for millions or even billions of dollars in the event i of future climate disasters. and i know it's not just california, but louisiana, texas, florida are also facing challenges in the property insurance markets. in our conversation you mention that fhfa this notou receive notice about insurers withdrawing from insurance markets and thehe downstream effects that this can have. could you elaborate on these withdrawals impact of homeowners future homeowners in, notches in california but across the country? >> sure, thank you for the question. .. 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 >> the requirement that we have that they purchase the loan. you know, it's interesting, because we're starting to see a lot of natural disasters and the collateral that hsfa is responsible for about 8.4 trillion dollars outstanding in mortgage collateral. so these natural disasters impact us greatly. we have multi-family and residential properties so when something that happens, it impacts the valuation of our property. we're seeing climate issues or natural disasters take place that used to be about three issues per year that were

costing over a billion dollars and now, just last year, there were about 28 different issues that cost over a billion dollars each and so, the impact on our portfolio where our only asset is mortgage collateral, a house or an apartment, is just phenomenal. we would like to work with the mortgage industry to address this issue. what we're finding is that premiums are going up and borrowers are not being able to afford some of their monthly payments with little or no notice, and so we're also seeing a reliance on state plans for insurance, whether it's flood or otherwise, that we really want to address as we try to deal with the cost of just owning a mortgage. we've been actually working with the insurance commissioners in some of the states that have lots of natural disasters, california, florida, louisiana, rhode

island. we have been working with the naic to try to address this important issue. >> and to that point, just really quickly with my last 50 seconds, i do want to offer either or both of you, secretary todman, i'd offer you the opportunity first, to talk about what steps can we collectively hud and hfhs to develop a frame work for protecting consumers in the event of natural disasters and interest provided withdrawals. >> i'm happy to pick up where the director left off. i do know hud has limited authorities as relates to the insurance industry, but what we've done, we've convened an internal working group to look at with the authorities that we have, how can we help some consumers and some housing issues that they're having increased output in cost because of outrageous insurance

increases. so as soon as this week, you'll be hearing hud announcing some things that we can do and there's a whole body of work that we'll be rolling out, including engaging with the insurance industry so they can understand the impact on housing affordability. >> senator from south carolina is recognized. >> thank you, mr. chairman. and just in a follow-up to senator butler's questioning, i think a lot of the challenge, it's not just home owners, but a lot of the other areas where insurance is finding if you're making a property and casualty repairs, because of supply chain issues, the costs of making those repairs have exploded and the time delays have added to the costs and that's born by an insurance industry that has seen significant costs for those specific items and it's driving, it's driving premiums up because of it. so, secretary todman, i'm

thinking out loud about the way to phrase this question to you. we're trying to cut costs wherever we can with regard to the bureaucratic costs of providing home ownership and so forth. there was a discussion most recently that we did at a round table in which we were talking about some of the unneeded paper trails that are required right now and i'd like to just read a format for you and you may very well want to take this for the record, but i think it's one that we could very efficiently and simply maybe cut some costs and red tape for some folks. we're all discussing housing affordability, but there has been little action on streamlining programs requirements and federal regulations. removing unnecessary program requirements would be a great place to start.

i'd like to discuss the environmental review process, the national environmental policy act or nepa requires agencies to consider the environmental effects of any proposed action and inform the public regarding their decisions. as you know, the agency carrying out the federal action may great their own nepa procedures under hud regulations, grantees 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 grants, cbdg funding for grantee administrative expenses. after acting secretary todman,

can you tell when a portion of the funds to be utilized for administrative expenses, hud requires the grantee to go through the bureaucratic process of actually conducting the review and creating a written record of that determination. it really does look like some low hanging fruit that could be fairly easily eliminated. and maybe you know about it right now, but, if not, would you take it for the record and get back to me. >> senator, i accept your invitation to take it for the record. i would add that environmental reviews, of course, is something that's important as we're doing our work. >> probably not with regard to administrative expenses. >> i accept your invitation to respond on the record and certainly ask our staff to take a look at this with you. >> thank you. >> director thompson in 2022 during are confirmation window a very good discussion about credit transfers, and i asked

you about ways we could invent advise to look at credit risk transfer. i support fannie and freddie, as a way to protect taxpayers. you agreed you felt the same way, in 2023, the enterprises posted the second lowest credit risk transfer from the program and freddie the lowest amount of credit risk transfer ever. director thompson because we have talked about that. you understand what a valuable tool that is. but i just can't figure out what's contributing to the trend that's going on there. can you help us with that? >> sure, thank you for the question, senator rounds, and i appreciate the opportunity to talk about credit risk transfer because we think as a huge component of shifting credit risk to private investors and off the balance sheets of fannie and freddie:

the reason the credit risk transfers were so low in 2023, they were based on the loans that are purchased by fannie and freddie and you'll remember in 2020, and 2021, we were faced with historic interest rates, record lows i should say, and the acquisitions for fannie and freddie, the two largest years of purchases for loan ever for fannie and freddie. and stifled the acquisition of loans from fannie and freddie in 2023, they went from record high to very low, so, again, they are credit risk transfers based on the amount of loans, but we encouraged them to use credit risk transfers and they're innovative in this space and it's a measure for safety and soundness, which is paramount importance for us. >> thank you. it appears that probably even

for those folks, a lot of the folks that don't have another place to go to get a loan, we're seeing right now that these high interest rates are impacting this segment of the population rather dramatically, aren't me? >> absolutely. >> thank you. >> thank you, senator round. senator menendez is recognized. >> acting secretary todman, i hope you're aware of the deplorable conditions that residents have been subjected to, issues, water and gas leaks, pest infestations, mold, broken appliances and more some residents lack heat and hot water throughout the past winter and the issues ongoing for years. and it's rife with management problems including issues with its procurement and contracting procedure with critical fixes

for units. and to a hotel with no cooking devices, no accommodation for a pet and no accommodation for residents disability. and many residents are still not able to return to their homes. i know that hud is aware because the secretary of public and indian housing described for the atlantic city housing authority quote, one of the worst audits i've ever read in my life. your staff has briefed mine on the action plan hud has for these issues, but residents have been lived in inhumane conditions for so long, especially when the plan is executed by the same authority that has allowed these issues to fester for years all the way ignoring or retaliating against residents who spoke out about the problems they were facing. the atlantic city housing authority has lost the trust of

the residents it was created to serve and that's why i sent a letter to your predecessor in september calling on hud to exercise its authority to immediately place the atlantic city housing authority in receivership and rapidly bring relief to the residents. today i'm reiterating that call. so, madam secretary will you commit to personally reviewing this situation and getting back to me with what you plan to do to accelerate relief for the residents of atlantic city? >> certainly, senator. i'm aware of the issue and directed the center leadership of office of public and indian housing to make more urgent action. we're working with the leadership at the atlantic city housing authority is horrific and no person, particularly housing should be experiencing that. >> i look to something more, i

argue that hud must immediately take over to assure the dignity of residents. and that the authority that allowed all this have to happen to affect the lives of its residents the way it has is the day it becomes hud's problem more so than the atlantic city housing authority. so i look forward to you to get back to me for your plan of action here. >> i commit to doing so. >> thank you. madam secretary, i was puzzled to see that the president's budget request, for $143 million less than the fy24 enacted for a section 202 housing. do you believe that hud's budget request accurately reflects trends in the market for senior residents housing. >> senator, as you may know, the hud and the administration are working under the constraints of the fiscal responsibility act so there's a-- it was difficult decisions to be made and we think we've put forward a budget that considers that agreement, but also,

prioritizes where we know there's need. >> all i know is that the nation is graying pretty dramatically. those who were boomers are grayers, and at the end of the day if we invest less in the supply of senior housing, while demand is skyrocketing, i'm not sure what that will do in the marketplace. so i urge you to relook at that. finally, secretary thompson, i-- oh, actually secretary todman, i understand that 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 energy efficiency updates. can you share with us, an

update on your work on this issue? >> right, so the department of energy was compelled, i believe, by legislation to carry out its work. hud does have a draft rule. i'm therefore limited on what i can say on the draft rule, but i know that we are trying to marry the pressing need of energy efficiency along with housing affordability and we've been working with our colleagues at the department of energy to do that. >> we have huge housing affordability across the country, new jersey for sure where people spend more of their disposable income on housing and they should and i hope that this is something that's accelerated. >> senator haggerty, i assume that senator has yielded to you. >> thank you. i love the fact that your mom and your brother still live there. i'd like to direct this to you. you've testified that in order

to end conservatorship with fannie mae and freddie mac, two things need to happen, first we need to look at the government. the 15-year long conservatorship and second, you said that congress needs to decide the future of two government sponsored entities and the mortgage fans system more broadly. on the first point, the quickest way to end the gsc conservatorship, just as banks were allowed to do in the wake of the 2008 financial crisis. now that they've controlled so much of the housing department. there seems to be a reluctance to relinquish government control. and i ask myself why. >> judging by the policies that have been pursued while you've been at the helm, it seems that the views by the biden administration is simply back door to push its dei social policy agenda which is well beyond your mandate. on the second point, congress

has already decided what type of mortgage finance system it wanted with the 2008 hera law. that significantly enhanced the regulatory and supervisory over fannie mae, freddie mac and the biden administration never took their feet off for the companies. for yourself, for secretary yellen and for attorney general garland is to continue the work done 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 plus windfall for taxpayers and could be use today immediately help expand the country's housing supply and support affordable housing in support of those in need. we talked about that during the time of confirmation to be the

agency head and our housing markets and american taxpayers deserve to see these conservatorships brought to an end, and i hope to have that in your time as director. >> thank you, mr. smith from minnesota has rearrived and then kind and yielding. >> thank you so much. thank you so much senator brown and thank both of you for being with us today. i appreciate it. >> oh, thank you. so everybody we know, i think we're all here today because we believe that everybody deserves a safe affordable place to call home and we also acknowledge for many families it's out of reach. i'm grateful to the biden administration for this and finding solutions to the challenges. housing is complex and nuanced and it's much driven by the private sector and also driven

by decision making when it comes to zoning, for example. and how we can look at boosting housing supply and the housing stock that we have. chair brown we had an interesting hearing in my subcommittee earlier this week that really highlighted the need to preserve the housing stock that we have. so, secretary todman, my question is for you. could you just highlight for us how the department has been working on this issue of housing supply, especially in the housing for middle income people who are working in low wage jobs also? >> absolutely, thank you, senator for the question and for your leadership on these issues as well. so hud has been very busy over the past three years not only carrying out its own work making sure we're executing on the vouchers that we've received and modernizing our rules, like the home rule,

making sure we're building to low and moderate income family needs and working collaboratively with our sister agencies with treasure on our new federal financial bank and removing the sort of deadline that was tied to that initiative so that more hfa's can help support affordability development and also working with our colleagues at treasury on the state and local fiscal recovery act and repurposing those funds for gap financing for critical capital needs on the ground. we have been busy and we think that with the umbrella of the president's housing supply action plan, we've been acting as one government to just drive this issue. >> so administration has made some proposals, new proposals to help expand housing supply and particularly the innovation fund for housing expansion. can you talk a bit about how that can help empower local solutions to increase housing

supply? >> i think you're referring to the president's budget, the 20 billion fund. it's just that, we want to include gap financing and helping folks so they can have some of their pro housing work and excited to have our pro housing program and rolling out some of the recipients of that sometime in the spring. it's meant to be a program that's meeting localities where they are and inspiring them to be able to create the local solutions to build housing and certainly to preserve the housing that they have. >> thank you. i also want to talk with you a bit. you and i've had quite a few issues around tribal and native housing and something that senator masto and senator warren pay attention to. we know there are significantly high rates of tribal-- of homelessness and overcrowding, which is really almost a bigger problem because

as people, you know, more than one family crowd into shelter that is not nearly large enough for them and also just the issue of substandard housing, we've held a subcommittee hearing on this last year and working with the administration on how we can respect tribal sovereignty and partner with tribes as we work on the housing issues. can you talk about how the department is addressing this issue? >> yes, you'll be happy to hear that since i took on the job as deputy secretary and been in robust conversation with tribal leaders and i've heard an earful as you can imagine. and one thing in addition to deploying the historic level of funds that congress has given us to help on housing and community development is really working with tribes on how they're able to use that money swiftly. in addition to that, we've created a new advisory committee in the department for tribal leaders and we've had

two meetings, we're going to have another one shortly, there we have consistently looked to the leaders of the tribal nations to tell us what can we be doing better in respect to our government to government relationship and those conversations continue and i've been working personally with some of the leaders on ways that hud can cut some of the red tape to make sure that we're helping them deliverments thank you for your work on both of these issues. >> thank you, chair brown. >> thank you. >> senator tillis from north carolina. >> thank you, mr. chair and thank you both for being here. director thompson, last year, hfha made freddie and fannie, and you said they were intended to allow the gsc's to reduce taxpayer risk. i'm trying to get my head around these. these changes functionally reduce aspects of risk-based

pricing relationship. and in common with loan to value strata, they seem to be providing a decrease in rates applied to higher risk persons. and increasing it to lower risk persons. did i get that right or what am i missing? >> so, thank you for the opportunity, senator to clarify the misunderstanding that permeated all of last year, about some of the pricing changes that fannie and freddie undertook. we have been working till gently to ensure that fanny and freddie are doing what they can to fulfill their mission. one, safety and soundness and two, making sure they're fulfilling their mission in terms of facilitating the loans and just machine served communities. we eliminated the loan level place adjustment to fee, for upfront fee for borrowers

across the country for borrowers that had area median incomes of 100% or less. i can assure you that all of the changes that we made do not result in borrowers with high credit scores, subsidizing borrowers with low credit scores. we continue to have risk-based pricing. what happened in the discussion, when you have a loan to value that is 80% or higher, you have to purchase credit enhancement, usually in the form of mortgage insurance and we don't add that into the calculation, but it's still risk-based pricing at the end of the day and i can assure you that risk-based pricing exists at fannie and freddie and there are provisions to make sure that lower income borrowers are -- and borrowers in rural

communities across this country do not have to pay upfront fees. >> this can be a very complicated discussion, and it's hard to simplify it into five minutes, but i'm going to submit this matrix for the record and then have you-- can i get your commitment to respond back to the very specific set of questions that we'll ask on this? because the thing that i'm trying to get my head around, if a part of this decision was used as a basis for raising capital, then where is that capital? where is it coming from? >> so the chart that you have reflects a number of changes that the enterprises undertook. one, we increased prices on super conforming-- super jumbo loans, that were over the conforming loan limit. that was one of the first changes we made. we also increased prices for-- >> what drove that decision. >> what drove that decision was the conforming loan limit in

some of the counties was well over seven digits. and that's a private market that exists to purchase those jumbo mortgages so to the extent that the enterprises are purchasing those loans, that people need to be able to pay the additional fees for those loans and the other thing that we did-- ments so are you saying that the policies that have been implemented the last year in your opinion and the fees associated with them were driven by actuarial decisions where you're rating for risk? >> absolutely, rating for risk and the capital requirements for every loans that we've purchased and the fees for second homes and vacation homes. the fees for higher ratings were overcharged? >> they were overcharged, we were not capturing the mortgage insurance that they have to

pay, it's mandatory. when you have that chart i'm going to draw a line for loans that are 80% ltv and above and add the fees for those. >> we'll get into it, i've got a long series of questions and i'll be happy in answering them and i want to get to the fact. i will say that we did reach out and try to get a consultation and see if imposition of this is in violation of the apa and should have been subject to rule making and we found out because we were going to try to force that issue, but apparently you're given latitude in the conservatorship model that you're operating in now. it's beginning to make me wonder we should tailor more authority what you have conservator. thank you for being here, and i'm going to send some questions in backlog in housing

as well. >> thank you, mr. chairman. >> so in 1932, congress created the federal home loan bank system to tackle the biggest housing crisis of the last century, the great depression. and the basic idea was simple. the federal government offered help in the inform of implied government guarantee and federal regulatory treatment and special tax status n return, they'd return liquidity to their members. today we're in the middle of some housing crisis, by some estimates short seven million housing units nationwide. in this critical moment, they're missing in action on their affordable housing mission. last month, the congressional budget office released a report that for the first time put a number on how much the fhlb's receive in public subsidies.

in fiscal year 2024 alone, that number was a whopping 7.3 billion dollars. director thompson, in 2023, how much of these public subsidies did the fhlb spend on affordable housing programs? >> i think it was approximately 390 million, say 350. >> okay, 390 million dollars. so that means the vast majority of the subsidies, the federal government poured into the fhlb's went somewhere other than to affordable housing, only a tiny fraction went to affordable housing. so where did the taxpayer money go? director thompson in that same year, how much did the fhlb's spend on dividends for their members like banks and insurance companies? >> approximately 3.4 trillion-- >> billion. >> billion, i'm sorry, with a b. >> gosh.

and just so we're clear here, the fhlb's spent 8 1/2 times as much on dividends to their members than they did on affordable housing? >> i think that's right. >> the math here. >>, but not all of those federal dollars, those taxpayer dollars went to dividends. there's still some money left over. according to the gao, the fhlb's went tens of billion to prop up silicon bank, first republic bank, before they failed. director thompson fhfa is the primary regulator for the fhlb's. do you think it's fortune for the fhfa's for the fhlb's to provide liquidity to housing

and development and not just prop up failing banks and dividends? >> thank you for the question. we conduct add year long review of the bank session and 17 list enning sessions. and the home owned banks, dual mission, one to provide liquidity to their members and the other to support the communities that they live in through affordable housing development and community development and there's a huge affordability issue. there are huge supply issues and home loan banks are well positioned to do a lot more and that's one of our recommendations for the report. >> it's one thing to be well-positioned and then not spending the money to accomplish that. >> i think clarifying the positions is a start. and take a look who lines up for federal subsisubsidies.

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

making sometime this year to talk about membership. one, to define what the local is of membership and to also ask questions about what that threshold should be because you'll have a situation like the-- one of the three thank failures where you start out with the 10% to meet the requirement and then the bank's business model changes and there's no ongoing checks for them to access the home loan bank system. so that's rule making and it will be very transparent and we're looking forward to engaging in that. >> well, i strongly urge the fhfa to issue its proposed rule making to address the mission and membership as soon as possible. it should be tackling our nation's housing crisis not doling out corporate welfare to these giant banks and to members that aren't even in the housing business. thank you, mr. chairman. >> senator vance from ohio is

recognized. >> thank you, mr. chairman, and thank you to the two witnesses for being with us here today. i want to just direct my questions to director thompson and director thompson, one of the biases that i have and hopefully it's shared by everybody who served in this body we shouldn't be discriminating in this country based on race. we should treat people based on their individual characteristics and not dole out government benefits, favors, or consequences because people have the wrong skin color and i assume that you share that conviction as well and so i want to point directly to a particular policy of your directorship. an august 2023 proposed rule requiring fannie and freddie, among other things, advance equity in housing finance. and in particular the way that fannie has applied this particular directive worries

me. so there's a fannie mae plan as i understand it, that is strictly targeted at black and brown americans, explicitly. i don't think that we should be doling out housing favors based on skin color, but i'm curious, one, am i right about that? does the fannie mae plan specifically target black and brown americans and does that plan have any financial requirements. >> thank you for that question. i want to share everything that our fhsa complies with under the law. we have under fair housing, assure there's fair housing for everyone. when you talk about the affordability issue, which is the biggest issue that our country has today, it did nt miss any communities and there are particular communities that are underserved and there are huge housing gaps and we've asked fannie mae and freddie

mac to come up with plans not just to underserved communities and, but rural communities, 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's no one size fits all. i would say that many of the barriers that have been identified in many so of the plans, especially in the fannie and freddie plans for black and brown borrowers apply to other cultures as well and it applies across our nation. i'll give you an example, one of the things that came out-- >> director, just because i'm limited on time. i'm sorry to disrupt just to specify this a little bit. as i understand, there's a down payment slush fund that fannie mae has applied as far as this particular equitable housing finance plan. my understanding is that black and brown americans are eligible for the down payment

assistance beau it's not income based? >> our programs are not race-based. the programs that are in the special purpose credit are location based and those are the programs that fannie and freddie offer. they do purchase loans from other institutions. >> so there's not-- this making me feel good if i'm understanding this. there's not a fannie mae assistance program you can only apply for if you're black or brown? >> there are many programs, home ready problem. >> is there one that discriminates based on race, you can only apply if you're of-- >> no, the fannie mae based special purpose credit programs you can apply for those programs if you live in a certain area, it's location based, but not raced based. >> is there any income requirement on that? >> i'm not sure i'd have to get

back on that. >> and i appreciate that before my time-- the thing i find somewhat troubling about this stuff, i certainly agree that there are a lot of black and brown americans left behind by the housing market and we want to guarantee access to the housing market 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 catch up a lot of americans from other racial categories who maybe don't have high income. it strikes me as a much better way and much less illegal way to do housing assistance in our country and targeting particular racial groups is not something that we should be doing. >> first, i want to say that we're not doing anything illegal and we do have-- >> that's good to hear, i appreciate that. >> and would know the do that. but we think that, you know, these housing programs should be available for everyone, we have them, we have programs based on income.

and we've had them for years and we do have these programs that are based on location that the enterprises are promulgating. >> thank you. senator van hollen from maryland is recognized. >> thank you for your service and a couple of questions to both of you related how we can use programs under each of your jurisdictions to help families reduce their energy costs. whether they're home owners or whether they're renters. so, will et -- let me begin with you, acting secretary todman. i know that last year you undertook a review, i think, of the building codes that review that's required under the energy independence and security act of 2007 and i understand that both from a department of energy analysis, but also from hud's own

preliminary determination, that i think determination was also made by the department of agriculture, that updating the building energy code are a net positive for households that they save households money because the monthly cost savings on energy bills are greater than the relatively small upfront costs of building to the latest code. and that cost, of course, is spread over the 30-year mortgage. as i understand it, your analysis shows that the cost savings are about $500 a year which is real money particularly for low income households that we know are spending way too much of their paycheck on energy costs. in my state of maryland, these updated standards would boost resilience and efficiency and for new homes, the balance of new homes and the average new home would deliver a net savings of over $5,000 for a

maryland family over a 30-year mortgage. so, could you tell me where hud stands right now in finalizing this code determination? it's been a while since i think that preliminary determination was made. so what's your plan and timetable for finalizing this? >> thank you, senator, and thank you for your leadership on this issue. hud certainly did take a look at this along with our colleagues at the usda and doe and we did put a proposed rule out and i think you're referring to some of the elements of that. the rule itself is still in our-- it wasn't our interagency process, but it's back at hud and you will be hearing some more very, very soon about the release of a final rule as something you can look forward to. i think what we tried to do very carefully is look at the pressing needs around energy efficiency as you so well

articulated and the long-term savings to home owners and renters and also looking at its intersection with affordability and one of the things that we're going to be relying on is just recently the administration announced some of epa's funding on greenhouse gas emissions and the reduction fund and we'll be leaning in and i know that local localities will be leaning in making sure we carry out the energy that you value. >> and thank you for mentioning the epa's recent announcement. i worked on over a decade and glad it finally came to fruition and it can be a complement to these other efforts. director thompson, obviously, in terms of the public component of your secondary mortgages, so, could you talk about your plans to adopt

similar building standards which would also, in fact, have an even greater impact in terms of the number of home owners and renters who would be able to save on their energy costs? >> sure. thank you for the question. the enterprises have long been proponent of providing energy efficiency, whether it's reductions in water or energy. so, they do give credit for builders buildings that have those efficiencies already built in. we are undertaking an analysis right now to look at the building code issue, the enterprises are working with stake holders to do their own analysis, provide research and we're also looking at hud's analysis as well. so, this is a priority for us and we should probably have some recommendations coming forward on what we're going to do and probably by the end of the second quarter. >> i appreciate that, and i

think the work that hud and usda have done probably provide a good model so you don't have to reinvent the wheel when it comes to the standards. mr. chairman, i'm going to submit a couple of questions for the record, one more each of you, and appreciate if you could get back to me as soon as possible. >> thank you. >> senator from alabama is recognized. >> thank you, mr. chairman. thank you both for being here today. it's clear the country is facing an affordable housing crisis. interest costs and inventory have put home ownership further and further out of reach for hard working americans. this crisis, in my opinion, has only been intensified by bidenomics. this administration's reckless tax and spend policies and misguided partisan efforts, like the green new deal or like my colleagues, haggerty and vance pointed out, over our

housing market and our economy. today, regulatory costs make up nearly 24% of a new home's price. homelessness hit a record high despite hud hitting funding to address this specific issue. not only is home ownership more out of reach, but not a single state in the country even has an adequate supply of an i fordable 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 politicizing regulatory actions that actually risk putting the economy at greater risk. and on that, director thompson, in a hearing last may, you said, quote, you are committed to making sure that pilots are public and that people know

that there is more transparency going on in fannie and freddie, end quote. is there a reason your agency changed paths so to speak and did not go through the public notice and public comment period before recently assuring the pilot program? >> thank you for the question and first i'd like to say that safety and soundness grounds everything that we do. we do not compromise safety and soundness i'm a long time regulator. >> thank you for reiterating. >> i wanted to make sure that. and the pilot, we received the pilot from fannie mae and the pilot we don't-- >> is this just in time for the state of the union, right before that. >> well, the pilot was-- we went through our normal process and the pilot went through analysis.

we didn't do anything different or anything wrong. so, is there-- are you going to consider actually allowing the public some time to comment on that? >> well, we are -- we need-- the pilot hasn't been optionalized yet. we're still in the process of searching for a vendor to help digitize and try to figure out how to access the title records. fannie mae is going to issue a solicitation to multiple vendors. >> okay. >> to provide the service. >> make sure i'm talking about the same thing. this applied to certain low risk refinances and it's know the going to help with people who are homeless and want to achieve the american dream. okay. so you finalized your agency did, its products and activities rule which my understanding was meant to bring transparency to new initiatives, but it seems that didn't going alongside this

actual initiative. >> yeah, this came in as a credit underwriting decision because what the pilot actually will do, is wave waive the requirement for representation and-- >> i'm sorry, i have only one minute. if you could commit to make had your sure there's a public comment period and we have an opportunity to weigh in. ms. todman, i'm going to shift my focus, you've been in the housing space and included in the moving to work program obviously when the pandemic hit, we decided or hud decided to postpone that program. would you recommit to actually reengaging now that the pandemic is over, to help people really not only get on their feet, but have an opportunity to actually succeed? >> senator, you'll be happy to hear that we have been working quickly and urgently to carry out congress's man tate to expand the moving to work agency and we completed that

task two weeks ago. >> if you're a working age american, without dependents, working training, volunteering to receive government benefits that there's a dignity that goes along with that. in my last few seconds, the magnitude of multi-family loans that will need to be refinanced over the next few years and can't because of the current interest rates. and look at the capital frame work and lack of counter cyclical adjustment. my staff will follow up with, but and look forward to you both. >> thanks, chair brown. according to the atlanta constitution this are just a handful of private firms that have i hadly own more than 10,000 single family homes

around atlanta and during the time of elevated rates and middle of a housing crisis, large institutional invests and wall street private equity firms are boxing first time home buyers out of the market by gobbling up the available housing stock in atlanta. this is particularly egregious when you think about the role that wall street played with just a few years ago with the crash and why i previously introduced the housing market transparency act. legislation that would provide greater transparency, over who actually owns properties built under the low income housing tax credit, which includes significant private equity investors. i'd like to ask the honorable sandra thompson, acting secretary.

thank you for all the work that your agency has done to make home ownership more affordable for americans, but i'm troubled by the increase in private equity ownership in the housing market. what steps is your agency taking to ensure that fannie mae and freddie mac are not passing economic benefits intended for ordinary americans to private equity firms? >> sure, so, thank you for the question and fannie mae and freddie mac do not engage in institutional investors for single family rentals at all. the agency had one transaction in 2018 and decided to not engage in those activities anymore, so, we do not permit institutional investors to purchase loan foracquisition. there are -- these are more mom and pop as opposed to institutional investors.

fannie mae says one person can have 10 individuals and freddie mac one person can have six. but those are local mom and pop, they're not institutional investors. >> are there steps though that your agency can take to protect ordinary folks from this increase in private equity ownership in the marketplace at large >>. >> well, for the loans that fannie mae and freddie won't purchase those loans because they're 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 goes on the market and you have to be owner occupied or a community development investment fund or nonprofit to purchase. first you get 30 days before the house goes on the market. so those are some of the things. >> so my larger concern,

obviously, is to ensure that ordinary, hardworking american families in georgia all across the country have access to the american dream and this is what allows for generational wealth that gets passed. will allow for generational wealth. so as home prices increased the ability for many americans to purchase an affordable home has moved out of reach, this is particularly true for first time, first generation home buyers, on top of this, we see a racial home ownership gap that actually widened in 2023, only 44% of black americans own a home a total that's almost 29 percentage points below americans. and i was glad to see the president pass a $10,000 tax

credit for first time home buyers. can you detail why this is important and who is it targeting? >> senator, thank you for that question. and i think you've provided the facts very clearly in terms of who will be most assisted by this type of investment and first time home owners and i'll take it to the next level, first generation home ownership which was a part of the president's proposal in his 2025 budget proposal. you know, this is critical. we know that home ownership remains the number one way that the middle class is able to generate and sustain generational wealth. and as you so well said there's only about 44% of black americans that have access to that generational wealth and so we know that by providing concept like first generation down payment. we know what that means in the long-term. we know that having a tax credit that alo us to he is

families locked out of home ownership, what it means to have sort of access to that type of subsidy, to write down some of the upfront costs, but we also know that we have to do more as a country and we're doing more as an administration to make sure that there are home ownership units to purchase and making sure that we can encourage the increase of supply of starter homes, so, we're looking at this in a full 360 and looking forward to sharing more with your team. >> that's exactly the work that my down payment toward equity act is focused on helping these first generation home owners buy down the rate and 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 getting signed into law. >> thank you, senator warnock. and my conversation yesterday, day before yesterday, whenever we talked with the acting secretary, we spoke about that

bill and our work on it and how secretary especially, a high priority for her, if we're going to forever end the wealth gap in this country, surely the first tool is home ownership. senator cortez masto is recognized. >> i want to say thank you to you and your staff for the great work and partnership around nevada. i know you're there and talked with both of you and your staff is on the ground. thank you. let me start, director thompson with you, i also have to thank you and your staff for the very inciteful and review of the federal home lending system. i think you and i talked about it from the very beginning, and the challenges i felt we needed to address, particularly around the core mission of a federal

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

that's just so unique and helpful and it produces results, especially in underserved and low to moderate income areas. and we wanted them to have the same benefits that other members have because other members are able to commit collateral, especially if they have, i think the limit is their small community institution. they can pledge collateral, but the cdfi's are not able to pledge the same type of collateral so we want today make sure that there was parity because we're talking about small institutions and small members and we want to make sure that there's parity throughout the membership. so, one of our regulatory asks is to make sure that cdfi's 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

fhl banks set aside was 30% of their net revenue and 10% for the affordable housing and 10% to repay the savings and loan bailout. and those never threaten the stability of the system. why does it increase 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 20% in retained earnings which counts towards capital, but they're all well-capitalized and they can well afford to provide at least another 10% to help with this housing crisis that we're going throughout this country. ... 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 arert