Companies
In their recent article for Reverse Mortgage Daily, Gate House Founding Partners Brian Montgomery, Keith Becker and Dror Oppenheimer discuss the implications of the first positive capital ratio for the HECM program in six years.
The Gate House team, who worked together at the Federal Housing Administration managing the HECM program, provided their unique perspective and explained that important policy changes, and most certainly strong home price appreciation, have contributed to the substantial improvement in the HECM capital ratio.
Nevertheless, they argued, the results do not “provide a reason for complacency or assurance of future (positive) results” and therefore continued vigilance to ensure the program “is not continuously subsidized by the premiums … in the forward book, will be vital for the HECM program to continue to serve its mission.”
Montgomery is the only person to have served as FHA Commissioner twice under three presidents. Becker served as the Deputy Assistant Secretary and Chief Risk Officer for FHA. Oppenheimer served as a Senior Advisor to the Commissioner of FHA.
Few issues are more salient to the challenges our country faces today than the shortage of decent, safe, affordable housing.
As became abundantly clear during the COVID-19 pandemic, our homes are the foundation of much of our lives, they have a profound effect on our health and well-being, and impact our education and productivity, as well as our ability to take advantage of opportunities in a free country.
As the coronavirus forced Americans to use their homes as safe havens, offices, and classrooms, it also put increased pressure on public and private housing markets that were already undersupplied and putting greater numbers of vulnerable citizens at risk.
And as the nation focuses on fairness and equity throughout our society and economy, it is evident that housing is integral to that fabric of American life, and, ultimately, the belief that everyone has a stake in its success.
Both in response to COVID-19 and in the Administration’s focus on infrastructure, we are seeing an unprecedented increase in funding for affordable housing.
The latest round of COVID-19 funding included over $46 billion for rental assistance, funds that will help individuals and families either get back on their feet or simply maintain life without the stress of whether there will be a roof overhead.
There is another staggering $200 billion being proposed in Washington through increase in the budget and infrastructure.
All of this is presenting tremendous possibilities, providing potential new funding sources for communities, developers, and public housing authorities. The increase in the Capital Fund for public housing authorities, for example, presents both private public sector partners with enormous opportunities over the next few years to improve the current affordable housing stock and to expand it as well.
These opportunities are coupled with enormous challenges to get it right in order to make a lasting impact on the lives of millions of people. We are already hearing the frustrations with trying to deploy this kind of money in a short period of time. The Consumer Financial Protection Bureau and the Federal Trade Commission gave notice to the largest landlords this week that the rules and tenant rights will need to be followed.
We have new and more administrative hurdles to spending this funding quickly and wisely. Stakeholders are going to need assistance to ensure they are following the rules and deploying the funds in an effective and efficient manner, a manner that not only helps the people intended to be helped but also ensure funds are spent in a timely fashion.
The timing of deploying funds will determine the ability of individuals, families, and communities to more fully recover and achieve goals that will impact their lives for many years.
-Hunter Kurtz, Vice Chairman and Founding Partner, Gate House Strategies