July 28, 2010
Affordable Housing Law Alert
When Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act this month it covered a wide range of activities, including a few provisions about affordable housing. Contained in the 900 or so pages of legislation are several HUD specific provisions covering multifamily mortgage resolution, additional funding and revisions to the Neighborhood Stabilization Act (NSP), and even basic changes to the administration of RESPA (the Real Estate Settlement Procedures Act of 1974).
The multifamily mortgage resolution program requires HUD to ensure protection of current and future residents of at-risk multifamily housing by creating sustainable financing, maintaining subsidy levels, funding rehabilitation, and facilitating transfers of properties. The NSP provisions provide
$1 billion in new funding to states and local governments using the provisions of the American Recovery and Reinvestment Act of 2009 (“ARRA”), but the funding formula contained in the Housing and Economic Recovery Act of 2008 (“HERA”). The Dodd-Frank legislation makes some modification, for example, certain ARRA restrictions do not apply. These NSP provisions also make substantive changes, including deleting the abandoned and foreclosed requirement when providing a 25% set-aside for lower income persons.
There are a series of changes to RESPA and related statutes, but most interesting for those who work with HUD is the transfer of HUD’s RESPA, Interstate Land Sales, and Secure and Fair Enforcement for Mortgage Licensing offices to the new Bureau of Consumer Protection. RESPA is also revised to place new limits on force-placed hazard insurance and appraiser selection.
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