Both the House and Senate are in recess for the next two weeks but wanted to send a quick update on a busy last week in Washington.
Passage of FY 2018 Spending Bill Critical Step for Affordable Housing Funding and Flood Reauthorization
U.S. House and Senate voted Thursday to fund the federal government through September 30, 2018. The 2,232-page bill contains important provisions related to housing that REALTORS® have been fighting for, including alleviating the weakening of the Low-Income Housing Tax Credit (LIHTC) from the new tax law, extending the EB5 program, extending the National Flood Insurance Program (NFIP) until July 31st, doubling flood map funding to $263 million, up from $177 million in the previous year, and maintains funding for the flood mitigation, proofing and elevation of properties ($175 million), as well as the Office of the Flood Insurance Consumer Advocate ($5 million) to assist homeowners with concerns over flood mapping and/or insurance ratings.
NAR Testifies on Association Health Plans
On Tuesday, March 20th, NAR testified before the U.S. House Education and the Workforce Subcommittee on Health, Employment, Labor and Pensions in support of current regulatory efforts to expand association health plans (AHPs). At the hearing, which focused on U.S. Department of Labor’s recently proposed AHP rule, Mike McGrew, a REALTOR® for more than 30 years in Lawrence, Kansas, and former NAR treasurer, expressed NAR’s strong support for the rule’s provisions to allow self-employed individuals with no employees to participate in association health plans. You can watch the hearing here.
Infrastructure Facebook Event:
On Tuesday, March 27 at 2 PM – 2:45 PM EST NAR is hosting a Facebook event titled $1.5 Trillion Infrastructure Plan: Opportunities for You? The Trump administration has released details on its plan to leverage $200 billion in federal funds to generate $1.3 trillion in local, state, and private investment to improve infrastructure projects around the country. What needs to happen next for this plan to be enacted? Should it be enacted, in its entirety or in part, what will be the impact on your local economy, real estate values, and land use planning? And what opportunities will there be for you? NAR analysts will share their insight into how the plan could unfold in the years ahead.
2018 Flood Insurance Rates
On April 1, 2018, National Flood Insurance Program (NFIP) premium rates are set to rise an average of 8%. This increase is slightly more than last year but consistent with the annual 5-10% increases prior to the 2012 Biggert-Waters Act, which made significant reforms to the NFIP. Under 2014 Flood Insurance Affordability amendments, individual property owners could see a rate increase up to 18% for newer properties and 25% for older ones. With these April 1 changes, FEMA is also continuing to implement the next round of increases and other technical changes for the newly mapped and preferred risk properties.
Fed Raises Rates: What This Means for Mortgages
The Federal Reserve voted Wednesday to raise its short-term interest rates, and that likely will mean more mortgage rate increases are on the horizon. The Fed’s rates are not directly tied to mortgage rates but tend to follow 10-year Treasury bonds. However, mortgage rates are often influenced by the Fed’s rates. Following the Fed’s move, buyers will need to brace for further hikes, cautions Danielle Hale, realtor.com®’s chief economist. “While they may find some days or weeks and maybe even a month or two where mortgage rates trend lower, the general direction in the months ahead is up,”
Proposed USDA Ineligible Area Maps
The U.S. Department of Agriculture (USDA) made available the proposed newly ineligible area maps for Rural Development Single Family Housing and Multi-Family Housing programs, including Section 502 rural housing loans. The “Proposed Ineligible Areas” maps show all ineligible non-rural areas, and not only the new non-rural areas. In some cases, previously ineligible areas will now become eligible rural areas. The new ineligible areas will become effective on June 4, 2018
Anti-Money Laundering Event
Last week, NAR participated in an all-day conference hosted by George Mason University’s Terrorism, Transnational Crime and Corruption Center on “Money Laundering in Real Estate.” NAR staff presented the industry perspective on a panel along with Nick D’ Ambrosia, a REALTOR® broker and SVP of Education and Licensing for Long & Foster Real Estate Companies. Also on the panel were representatives from the American Land Title Association and the American Escrow Association. The conference provided valuable insight in the vulnerabilities of the real estate industry as a target for money laundering schemes. As a result, many in attendance were in favor of increased regulations on the industry as a means to gain more intelligence on buyers and sellers in an attempt to crack down on illicit financing schemes. However, such regulations would prove burdensome and unnecessary given the existing anti-money laundering regulations that already apply to U.S. financial institutions
Geographic Targeting Orders (GTOs) Extended
The U.S. Department of Treasury’s lead agency in the fight against money laundering, the Financial Crimes Enforcement Network (FinCEN), has renewed the Geographic Targeting Orders (GTOs) imposing data collection and reporting requirements on title companies involved in certain high-end real estate transactions. FinCEN previously discovered that about 30 percent of the reported covered transactions in the GTOs were linked to possible criminal activity by the individuals revealed to be the beneficial owners of the shell company purchasers. As a result, FinCEN has extended the GTOs until September 2018 covering the following geographic areas and transactions:
$500k and above – Bexar County, Texas
$1m and above – Miami-Dade, Broward, and Palm Beach Counties, Florida
$1.5m and above – New York City Boroughs of Brooklyn, Queens, Bronx, and Staten Island
$2m and above – San Diego, Los Angeles, San Francisco, San Mateo, and Santa Clara Counties, California
$3m and above – New York City Borough of Manhattan $3m and above – City and County of Honolulu, Hawaii
The GTOs do not impose any new obligations on real estate professionals, except to the extent that a transaction is covered by a GTO and the title company needs to consult with the real estate professional to obtain information necessary to maintain compliance with the order. However, such communications should not affect the real estate sales transaction or timeline for closing as title companies are required to report GTO covered transactions to FinCEN within 30 days of the closing.
Please let me know if I can be of assistance. Hope everyone has a great week.
April Brown Gavin
National Association of REALTORS®
Senior Political Representative