Campaign Promises

Departments -> Housing & Urban Dev -> Affordable Housing

ItemHousing & Urban Dev
Affordable HousingGrade
HU-1 The Promise: "Will support efforts to create an Affordable Housing Trust Fund to develop affordable housing in mixed-income neighborhoods."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity", dated 09/11/08.
Status:The key words in this promise,"create an Affordable Housing Trust Fund" may have sounded great to low income earners and garnered votes for then-Candidate Obama. In reality, a National Housing Trust Fund (NHTF) was enacted in Public Law 110-289 on 07/30/08, a few months prior to the publication of the Obama-Biden plan sourced above.

The President's Budget proposal for FY2010, and almost every year thereafter, included $1B "to capitalize and launch an Affordable Housing Trust Fund that will develop, rehabilitate, and preserve affordable housing targeted to very low income households." This was, in essence, the already-enacted NHTF.

However, the FY2010 budget Final Conference Report (111-366) did not view funding the NHTF favorably. It was the only budget item in the Housing and Urban Development (HUD) budget requested by President Obama that received absolutely no funding. The reason for this was because
the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) were both considered by Congress at the time to be failed Government-Sponsored Enterprises (GSEs) models.

To remedy this situation and in response to the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Obama on 07/21/10, HUD issued its report entitled "Reforming America's Housing Finance Market, A Report to Congress," on 02/11/11. In that report, HUD recommended better Government support for affordable housing by asking Congress to capitalize targeted access and affordability initiatives such as those mandated by Public Law 110-289.

On 03/03/11, Senator Jack Reed (D-RI) introduced the "Preserving Homes and Communities Act" (S. 489). This was followed by the introduction by Congressman Elijah Cummings (D-MD) on 04/12/11 of a companion bill (H.R. 1477). These bills were designed to provide the $1B capitalization needed by the NHTF from profits accrued from the sale of warrants that the federal government received from banks that were bailed out under the Troubled Assets Recovery Program (TARP). Neither bill got past the introduction phase and both expired with the 112th Congress.

Finally in FY2016, far from the annual request for $1B, the Housing Trust Fund was appropriated $182M and President Obama requested $136M for FY2017. These funds come from assessments from Fannie Mae and Freddie Mac. They will finance the development, rehabilitation and preservation of affordable housing for extremely low-income (ELI) residents, and will result in over 1,000 housing units produced over time.

The "Affordable Housing Trust Fund" did not require creation and the NHTF was not funded for most of President Obama's two terms in office.

This promise was not fulfilled.
HU-2 The Promise: "As President, Obama will work with the state to establish a goal for approving all Road Home applications within two months."
When/Where: Obama-Biden Plan: "Rebuilding the Gulf Coast and Preventing Future Catastrophes", dated 09/11/08.
Status:The "Road Home" Program was funded at $10.4B to allow grants up to $150K per homeowner victim of Hurricanes Katrina and Rita. As of the end of CY2010, approximately 130,000 families (out of 230,000 applicants) had received affordable housing assistance valued at $8.9B from the state's housing recovery program administered by the Louisiana's Office of Community Development (OCD) via a contract with ICF International.

However, according to the Louisiana Recovery Authority (LRA), by the end of 2009 approximately 3,500 homeowners were still working their applications through the system and more than 200 still had open appeals cases. The LRA ceased to exist on 06/30/10 and its functions were assumed by the Disaster Recovery Unit of Louisiana's OCD. The OCD reported that as of end-CY2010, only 66 applications were in the appeal process. More than $700M in Road Home funds remained unspent and about 3,000 files remained open as of early CY2011 -- some of these being more than a year old.

This promise was not fulfilled.
HU-3 The Promise: "Will also work to increase the supply of rental property, which is particularly important in New Orleans where 57 percent of pre-Katrina residents were renters."
When/Where: Obama-Biden Plan: "Rebuilding the Gulf Coast and Preventing Future Catastrophes", dated 09/11/08.
Status:Hurricane Katrina, according to the New Orleans Office of Community Development (OCD), destroyed 70% of housing stock including 51,000 rental units.

According to the Greater New Orleans Community Data Center (GNOCDC), the CY2010 number of new federally subsidized rental units needed was 20,896. Against this requirement, only about one third (7,754) were subsidized, leaving 13,429 not subsidized.

Projected subsidized rental unit requirements were provided by the GNOCDC as 23,034 in CY2012 and 26,837 by CY2015, escalating to 36,151 by CY2020.

As of end-CY2012, the OCD reported that New Orleans still had 43,755 blighted homes and that an estimated $9.9B was needed to complete the city's reconstruction needs, including rental properties. Against this need, federal grants in FY2012 amounted to about $17M broken out as follows:
- $10.830M from Community Development Block Grant (CDBG)
- $1.590M from HOME Investment Partnerships Program (HOME)
- $1.291 from Emergency Solutions Grant (ESG) Program
- $3.584 from Housing Opportunities for Persons with AIDS (HOPWA)

By end-CY2015, 35% of renters in the New Orleans-Metairie-Kenner statistical area devoted 50% or more of their income to rent and utilities. Only Miami was higher where 37.5% of renters shelled out 50% or more of their income to rent and utilities.

As of end-CY2016, New Orleans remained far behind in rebuilding its supply of apartment rentals following the total loss of at least 12,000 units after Hurricane Katrina. The metro area had added only about 3,100 units since CY2012.

This promise was not fulfilled.
HU-4 The Promise: "...will create a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. The HOME score will allow Americans to easily compare various mortgage products and understand the full cost of the loan."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity", dated 09/11/08.
Status:The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Obama on 07/21/10 created a Consumer Financial Protection Bureau (CFPB). One of the CFPB's missions was to "prescribe rules to ensure that the features of any consumer financial product or service, both initially and over the term of the product or service, are fully, accurately, and effectively disclosed to consumers."

In CY2015, the CFPB introduced the "CFPB Mortgage Tool" to help potential borrowers see the lowest interest rate available to them. Borrowers can use this tool to input their credit score, down payment, loan amount and zip code. The CFPB, using real data, will show the average and best interest rates available in the market in real time.

In 09/15, the CFPB introduced its second tool to assist potential borrowers, a clear, three-page loan disclosure form written in simple language that any borrower can understand. The disclosure form simplifies the following:
- The first part of the document reflects the loan amount, interest rate, monthly payment and any prepayment penalties or balloon payments as well as the total closing costs and cash required to close.
- The second part breaks the costs into two sections. The first section details closing costs that "you cannot shop for" and closing costs that "you can shop for." For example, a borrower cannot shop for a better mortgage insurance deal, but can shop around for better deals on title insurance and property inspections.
- The last section of the disclosure form is entitled "Comparisons," which simplifies the borrower's understanding of how much he/she will pay over a five-year period, including all expenses. When the borrower is shopping for mortgages, he/she can compare those five-year costs to see which lender is giving him/her the best deal when all costs are included.

Although these CFPB initiatives do not ultimately provide the potential borrower with a "score," the intent of this promise has been fulfilled.
HU-5 The Promise: "...will also restore cuts to public housing operating subsidies, and ensure that all Department of Housing and Urban Development (HUD) programs are restored to their original purpose."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity", dated 09/11/08.
Status:President Obama's FY2010 budget request included $4.600B for the Public Housing Operating Fund (PHOF), which represented 100% of funding requirements for operating subsidies (since CY2002) as calculated by a formula devised through negotiated rule making. The amount appropriated by Congress for PHOF in FY2010 was actually $4.775B to mitigate prior year shortages. For subsequent years, funds requested for PHOF compared to the amount authorized by Congress were as follows:
FY2011....Requested $4.829B / Received $4.626B
FY2012....Requested $3.962B / Received $3.962B
FY2013....Requested $4.524B / Received $4.262B
FY2014....Requested $4.600B / Received $4.400B
FY2015....Requested $4.600B / Received $4.400B
FY2016....Requested $4.600B / Received $4.500B
FY2017....Requested $4.569B / Received $4.400B

Serious attempts were made by the Obama Administration, within budget constraints (i.e. sequestration), to reach the annual goal of $4.600B for the PHOF.

This promise was fulfilled.