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Policy Update: CLTs in housing finance bill

A Policy Win in Housing Finance Reform

Due to the Network’s advocacy efforts, community land trusts (CLTs) and other permanently affordable homeownership (PAH) programs are included in the bipartisan housing finance proposal sponsored by the leaders of the Senate Banking Committee, Senator Johnson and Senator Crapo. In the bill CLTs and PAH programs are defined and acknowledged as “single-family eligible mortgage loans” for mortgage insurance under the new Federal Mortgage Insurance Corporation (FMIC), which would replace the GSEs.

If the bill passes, the FMIC will be required to create systems for insuring mortgages to buyers in CLTs and PAH programs (This will prevent facing post facto obstacles like those we’re currently addressing with FHA). Notably, lenders are not required to provide mortgage financing to borrowers in CLTs or PAH programs; however, this version of the bill also creates additional incentives for lenders to work with underserved households and communities. Ultimately, CLTs and PAH programs will not be locked out of access to mortgage financing if this new federal infrastructure is adopted for the housing finance system.

 This discussion bill is planned for mark-up by the Senate Banking Committee at the end of this month. The Network has sent letters to all members of the Senate Banking Committee this week to ensure that they understand what CLTs and PAH programs are and why they need mention in the bill, as well as requesting that they retain these definitions during the mark-up. View sample letter>  

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