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Media Coverage Package April 2012 5 Towns Jewish Times April 5, 2012 Met Council Towers VI Provides 78 New Units Of Affordable Housing For Seniors AHF magazine March/April 2012 Enter prise and Bellwether Merge Mortgage Businesses In Memoriam: Patricia Rouse Top 50 Affordable Housing Developers Apartment Finance Today March/April 2012 Credit Cloudy Baltimore Business Journal April 10, 2012 Banks in Small Business Lending Fund making more loans BusinessWeek April 10, 2012 DeMarco Says Principal Writedowns May Save FHFA $1.7 Billion Commercial Property Executive April 10, 2012 Enter prise, Bellwether Merge Operations Economy Watch (an MSNBC blog) April 10, 2012 FHFA chief DeMarco loosens up a bit on principal reduction Market News International April 9, 2012 FHFA's DeMarco Finds Some Support In Principal Reduc Oppostn MHN Online April 5, 2012 Affordable Housing Goes Green with $12 Million Energy Efficiency Program MortgageOrb April 20, 2012 Nominations Sought For MetLife Affordable Housing Awards

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April clips

Transcript of April clips

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Media Coverage Package

April 2012

5 Towns Jewish Times April 5, 2012 Met Council Towers VI Provides 78 New Units Of Affordable Housing For Seniors AHF magazine March/April 2012 Enter prise and Bellwether Merge Mortgage BusinessesIn Memoriam: Patricia Rouse Top 50 Affordable Housing Developers Apartment Finance Today March/April 2012 Credit Cloudy Baltimore Business Journal April 10, 2012 Banks in Small Business Lending Fund making more loans BusinessWeek April 10, 2012 DeMarco Says Principal Writedowns May Save FHFA $1.7 Billion Commercial Property Executive April 10, 2012 Enter prise, Bellwether Merge Operations Economy Watch (an MSNBC blog) April 10, 2012 FHFA chief DeMarco loosens up a bit on principal reduction Market News International April 9, 2012 FHFA's DeMarco Finds Some Support In Principal Reduc Oppostn MHN Online April 5, 2012 Affordable Housing Goes Green with $12 Million Energy Efficiency Program MortgageOrb April 20, 2012 Nominations Sought For MetLife Affordable Housing Awards

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Nation's Cities Weekly April 16, 2012 Atlanta Conducts Housing Inventory New York Nonprofit Press April 26, 2012 Enter prise & Habitat NYC Close $2.9 Mil Loan Deal New York Real Estate Journal April 24, 2012 Citi and Enter prise Community Loan Fund team up with Next Street New York Times April 5, 2012 Healthier Eating Starts on the Roof NHC Open House Blog (The National Housing Conference) April 12, 2012 What to really worry about for the Housing Credit and the Volcker Rule April 27, 2012 Hearing highlights foreclosure crisis and response Novogradac Journal of Tax Credits April 2012 Low-Income Housing Tax Credits News Briefs CDFI Bond Guarantee: Below-the-Radar Opportunity to Increase Community Development Lending Affordable Neighborhood an Uplifting Addition to High-Income Area NPR April 11, 2012 Fannie, Freddie Weigh Mortgage Write-Downs April 16, 2012 Hoping For Payout, Investors Become Landlords OnCentral April 27, 2012 Plenty good news' at Epworth's grand opening PBS NewsHour April 24, 2012 After the Fall: Have Government Programs Helped Ailing Housing Market? San Francisco Examiner April 2, 2012 New homes for needy are first of many in San Francisco San Francisco Structures (San Francisco Business Times blog) April 2, 2012 Bridge, Community Housing break ground on Transbay affordable project Switchboard (Natural Resources Defense Council blog) April 6, 2012 "Culturally appropriate, healthy and affordable housing" for Native American communities

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Sustainable Business Oregon April 10, 2012 Nonprofit building project steps forward Tax Credit Advisor April 2012 NH&RA News The Latest Word (a Denver Westword blog) April 10, 2012 Mile High Connects finds access and equity gaps in city's public transit The Real Deal April 6, 2012 City’s affordable developers provide urban gardens TIME.com April 11, 2012 Is Fannie and Freddie Honcho Ed DeMarco “America’s Most Dangerous Man?” April 17, 2012 Building a Better Bailout: Can Fannie and Freddie Help American Homeowners? USATODAY.com April 15, 2012 Opposing view: Allow principal reduction Woodworking Network April 18, 2012 CBS EcoMedia and FSC Join Hands Bronx Times April 13, 2012 Nearly 1,150 Bronx apartments retrofitted Brooklyn Daily Eagle April 2, 2012 Greening of Brooklyn Apartments Achieved By Nonprofits Enter prise, LISC City Limits April 23, 2012 For Some Landlords, It's Not Easy Going Green Planetizen April 16, 2012 For Affordable Housing in NYC, a Bountiful Harvest

5 Towns Jewish Times April 5, 2012 Met Council Towers VI Provides 78 New Units Of Affordable Housing For Seniors Written by 5TJT Staff The shortage of affordable housing for seniors in New York City is more evident than ever before. Many needy seniors are living on low annual incomes and are finding it increasingly difficult to cover their monthly

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rent. Affordable housing options for seniors have fallen by the wayside due to recent federal, state, and city budget cuts, and this population is slipping through the cracks. Met Council, a leader in poverty alleviation, receives thousands of eligible applications for each of its senior housing projects. In response to this urgent need, New York City Housing Authority (NYCHA) Chairman John Rhea, New York City Department of Housing Preservation and Development (HPD) Commissioner Mathew M. Wambua, New York City Housing Development Corporation (HDC) President Marc Jahr, U.S. Department of Housing and Urban Development (HUD) Deputy Regional Administrator Mirza Orriols, and Enterprise Deputy Director Victoria Shire joined Met Council to celebrate the opening of Council Towers VI in Queens on February 21. This building is the sixth in a series of completed senior housing buildings created to serve as supportive affordable housing for New York City residents 62 years of age and older. Council Towers VI is located at 155-25 71st Avenue, between Kissena and Parsons Boulevards in Flushing. “NYCHA is proud to partner with Met Council, HUD, HPD, and HDC. This is an excellent example of how all of us—government agencies and nonprofit organizations—can combine our unique strengths and resources to better serve New Yorkers,” said NYCHA Chairman John B. Rhea. “This development for our senior population shows how working together, even in tough economic times, we can find innovative solutions to meet the demand for affordable supportive housing.” Council Towers VI was developed under Mayor Michael R. Bloomberg’s New Housing Marketplace Plan (NHMP), a multibillion-dollar initiative to finance 165,000 units of affordable housing for 500,000 New Yorkers by the close of the 2014 fiscal year. To date, the plan has funded the creation or preservation of over 129,200 units of affordable housing across the five boroughs—12,500 of which are in Queens, with 2,598 units located in Community District 8 (which contains Council Towers VI). Council Towers VI is an eight-story building with 77 one-bedroom rental units and 1 unit reserved for an on-site superintendent. A full 25 percent of the units have a preference for existing NYCHA tenants. All units have a senior preference for tenants age 62 and older. The units will be available to tenants earning no more than 50 percent area median income (AMI) or $28,650 for an individual. This building was developed under the U.S. Department of Housing and Urban Development’s (HUD) Section 202 program. The tenant’s rent will be set at 30 percent household income. “New Yorkers, indeed all Americans, are living longer, and as a society we have to better prepare for their needs as they grow more vulnerable and frail,” explained William E. Rapfogel, Met Council CEO and executive director. “By helping our clients find a secure, safe, and stable place to live, we empower them to have a better quality of life. We are so grateful to HUD, the Housing Authority, HPD, HDC, and other government agencies and elected leaders that support our mission of bringing affordable housing to communities in need.” Residents of Council Towers VI have access to a variety of onsite services. Management staff will provide case management, benefits, and entitlements advice and advocacy as well as onsite education and recreational activities. An experienced social worker will serve as a support service coordinator. Staff will be equipped to refer tenants to offsite licensed health care agencies to provide home care, adult day care, hospital services, medical education, and nursing home options. Additional onsite services include Meals-On-Wheels, housekeeping assistance, counseling, and recreational trips. Through the New York State Department of Transportation, Met Council provides transportation for the elderly to essential appointments and recreational outings. The site of Council Towers VI was provided by NYCHA. HDC provided construction financing in a HDC First Mortgage amount of $10.2 million. The HDC First Mortgage will be paid down at conversion and is not counted in the total development cost. The total development cost of the project is nearly $20 million. HUD provided funding under Section 202 in the amount of $11.16 million as well as a HUD Predevelopment Grant of $397,000. HPD provided approximately $1.8 million through the federal HOME Loan program, and the Federal Home Loan Bank Board of New York contributed $770,000 in permanent financing. Federal Low-Income Housing Tax Credits (LITHC) in the amount of approximately $5.8 million will be provided through Enterprise Community Partners.

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^Back to top AHF magazine March/April 2012 Enterprise and Bellwether Merge Mortgage Businesses In a move that will expand its product offerings beyond the affordable housing business, Enterprise Community Investment, Inc., is merging its Multifamily Mortgage Finance division with Bellwether Real Estate Capital, LLC. The new company, Bellwether Enterprise Real Estate Capital, LLC, is expected to top $1.5 billion in combined mortgage production volume this year, with roughly 30 percent of the volume estimated for affordable housing. The transaction is expected to close in the second quarter. Lamar Seats, currently senior vice president of the Columbia, Md.-based firm’s Multifamily Mortgage Finance business, will serve as CEO of Bellwether Enterprise. Ned Huffman of Bellwether will serve as president, and Debbie Rogan of Bellwether will be executive vice president. Headquartered in Cleveland, the combined team will have 90 employees and will offer financing expertise in multifamily housing, office, retail, industrial, hotel, and health-care lending markets. Originators will be located in 13 cities. ^Back to top AHF magazine March/April 2012 In Memoriam: Patricia Rouse Patricia Rouse, the co-founder of The Enterprise Foundation, now Enterprise Community Partners, Inc., died Monday in Columbia, Md., of Non-Hodgkin’s lymphoma. She was 85. Rouse established the nonprofit in 1982 with her late husband, James Rouse, with the soaring goal of making sure every American has a decent, affordable home. “Enterprise is forever indebted to Patty, our visionary co-founder, for her unwavering commitment and the groundbreaking legacy she has left the affordable housing and community development industry,” said Terri Ludwig, president and CEO of Enterprise Community Partners, in a statement. Rouse was a lifetime member of the Enterprise board of trustees and previously held board positions as vice president and secretary. She also served as secretary and a member of the board of directors of its for-profit subsidiary, Enterprise Community Investment, Inc. “She has always embodied the heart and soul of Enterprise and will continue to be the foundation of our organization,” said Charlie Werhane, president and CEO of Enterprise Community Investment. Enterprise was inspired by an encounter the Rouses had with three women from the Church of the Saviour in Washington, D.C. With no development or financial experience, the church members put down a nonrefundable deposit in 1972 to purchase the Ritz and Mozart apartment buildings in the Adams Morgan neighborhood. Their commitment won over James Rouse, a noted builder, and he helped them secure $625,000 to complete the transaction and $125,000 toward the rehabilitation. Jubilee Housing was then formed in 1973, serving as the launch pad for the Rouses to start Enterprise, which has since raised and invested more than $11 billion in equity, grants, and loans to build or preserve nearly 300,000 affordable homes. Patty Rouse’s work went far beyond Enterprise. In addition to being the first female commissioner of the

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Norfolk Redevelopment and Housing Authority, she was active with numerous industry organizations, including serving on the boards of the National Low Income Housing Coalition, Jubilee Housing, and the National Committee Against Discrimination in Housing. She was the National Housing Conference’s Housing Person of the Year in 1998. Rouse and her husband were inducted to Affordable Housing Finance’s Hall of Fame in 2010. In honor of Patty, her family has asked that contributions be made to The Patty Rouse Fund to support Enterprise’s work with the poor. Donations can be directed to: The Patty Rouse Fund, Enterprise Community Partners, Inc., 10227 Wincopin Circle, American City Building, Suite 500, Columbia, MD 21044-3400. ^Back to top

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AHF magazine March/April 2012 Top 50 Affordable Housing Developers

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Apartment Finance Today March/April 2012 Credit Cloudy High tax-credit prices are back for affordable housing developers—but will they last? By Bendix Anderson This past winter, three national companies—affordable housing nonprofit Enterprise Community Partners, developer/property manager Richman Group, and investment bank RBC Capital Markets—bid against each other to invest in 50 planned apartments for low-income seniors in Leakesville, Miss., a rural town with a population of about 1,000. At press time, RBC was planning to close the deal to pay 95 cents per dollar for the low-income housing tax credits (LIHTCs) from the project, called McIntosh Homes. “I’m blown away by the pricing we’re getting,” says Milton Pratt, senior vice president of development for The Michaels Organization, based in Marlton, N.J., which plans to start construction on McIntosh Homes this year. Pricing Recovers Just a few years ago, it was almost impossible to get investors like RBC interested in places like Leakesville. So what attracted the company and its fellow large firms?

For one thing, it’s not just Mississippi that’s suddenly become a magnet for affordable housing money; the market for LIHTCs has recovered across the country, although analysts predict that average prices for the credits may drop back a few cents on the dollar this year, driven down by competition from other investments and the looming expiration date for a federal law governing the credits (see sidebar). Even if prices do slip, it’s hard to overstate the scale of the recovery. In 2009, many solid affordable projects were unable to find investors. Most such projects were finding investors a year later, but the average pricing for LIHTCs in rural areas was in the range of 60 cents per dollar of tax credit. But now, “pricing is

similar to [what it was] before the downturn,” says Raoul Moore, senior vice president of tax credit syndication for Columbia, Md.–based Enterprise Community Partners. LIHTC prices currently range from $0.85 to $1.10 for a dollar of tax credit, largely depending on project location and builder. Projects in prime markets where growing banks have their branches earn the highest prices. These banks are obligated to invest in underserved communities under the federal Community Reinvestment Act (CRA). In the hottest CRA markets, such as New York City and the California coast, banks often pay more than a dollar for a dollar of tax credit, plus associated tax benefits, experts say. In the Northern Virginia suburbs, CRA investors pay an average of about 98 cents for tax credits from new construction projects and more than a dollar for tax credits from rehab projects, in which tax credits flow more quickly to investors.

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In quieter parts of the country, where fewer banks jostle to open new branches and merge with each other, “economic” investors buy LIHTCs based on the yield on their investment, often paying in the 80-cent range. Companies ranging from insurance companies to Google have filled in the gap left by large investors, such as Fannie Mae and Freddie Mac, that left the tax-credit market during the crash. LIHTC investors often pay as much as 10 cents on the dollar extra for projects from developers with strong balance sheets. “We haven’t priced a deal below 90 cents in 18 months,” says Michael Moses, VP of structured finance for Cleveland-based NRP Group, which is not active in the major CRA markets. Investors May Stray This year, the economic investors have begun to grumble about high tax-credit prices. “They’re asking for a higher yield, and that’s driving prices down,” says Adam Stockmaster, assistant vice president for property manager T.M. Associates, based in Rockville, Md. Also, as the economy eventually strengthens, the yield on other investments will rise, giving economic investors more choices. “They’re finding other things on the financial markets that offer the same or higher yield,” says Stockmaster. Pressure from such investors may drive LIHTC prices down by 2 cents to 5 cents over the next year, experts predict.

Bendix Anderson is a freelance writer based in Brooklyn, N.Y. ^Back to top Baltimore Business Journal April 10, 2012 Banks in Small Business Lending Fund making more loans By Kent Hoover, Washington Bureau Chief The federal government’s Small Business Lending Fund appears to be a modest success. The program provided $4 billion in capital to 281 community banks and 51 community development loan funds last year, with incentives to use the money for making small-business loans. And that’s what most of the institutions are doing, according to a report issued Monday by the Treasury Department. SBLF participants increased their small-business lending by $1.3 billion in the fourth quarter of 2011, compared with the third-quarter levels. Several Maryland institutions are part of the program: Howard Bank in Ellicott City; Community Bank of Tri-County in Waldorf; Monument Bank in Bethesda; Enterprise Community Loan Fund in Columbia. Maryland banks have increased their small business lending by $234 million since receiving the funds, the Treasury Department said.

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Two-thirds of the banks and community development loan funds have increased their small-business lending by 10 percent or more, according to the report. That’s good news, but it also demonstrates how limited the SBLF was. Congress authorized the Treasury Department to provide up to $30 billion in inexpensive capital to banks to boost lending to small businesses. Banks ended up only taking $4 billion. Most of the banks that applied for the capital were rejected. Many other banks said they didn’t need more capital to increase small-business lending — they just needed relief from overzealous banking regulators. Critics also pointed out that banks used $2.2 billion of the SBLF’s $4 billion in capital to pay back the government for Troubled Asset Relief Program funds they received during the financial crisis. Did that boost small-business lending? The Treasury Department says it did. The banks that used SBLF funds to pay off their TARP debts have increased their business lending by 12.5 percent since mid-2010. That compares with an increase in business lending of 5.5 percent for banks that didn’t participate in the SBLF. ^Back to top BusinessWeek April 10, 2012 DeMarco Says Principal Writedowns May Save FHFA $1.7 Billion By Clea Benson and Cheyenne Hopkins Fannie Mae and Freddie Mac could save $1.7 billion if they forgave principal on some troubled mortgages, the companies’ regulator said today in Washington. The Federal Housing Finance Agency may make a decision “in the next few weeks” about whether to change its policy barring the two taxpayer-owned companies from performing such loan modifications, Edward J. DeMarco, the agency’s acting director, said in a speech at the Brookings Institution. DeMarco said he remains concerned that debt writedowns could be an incentive to default for some so-called underwater homeowners, who owe more than their properties are worth, offsetting any cost savings. “Will some percentage of borrowers who are current on their loans be encouraged to either claim a hardship or actually go delinquent to capture the benefits of principal reduction?” DeMarco said. The FHFA, which began overseeing Fannie Mae and Freddie Mac when they were taken into U.S. conservatorship in 2008, has come under pressure from the Obama administration and consumer advocates to cut principal for underwater borrowers. DeMarco has barred the companies from reducing principal on the seriously delinquent loans they own or guarantee on the grounds that it would hurt their bottom line. Treasury Incentive The new FHFA analysis cited by DeMarco takes into account incentives from the U.S. Treasury that would pay Fannie Mae and Freddie Mac as much as 63 cents for every dollar of principal they forgive. The Treasury would provide the money to the companies under its expanded Home Affordable Modification Program, using leftover funds from the Troubled Asset Relief Program. Even though Fannie Mae and Freddie Mac will save $1.7 billion because of the payments of as much as $3.8 billion from the Treasury, the net cost to taxpayers of the writedown will be about $2.1 billion, DeMarco said. Fewer than 1 million households would be eligible, out of 11 million underwater borrowers nationwide, and the savings from principal writedowns could also be offset by increased cost of implementing such a program, DeMarco said.

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“All these cost factors would have to be carefully considered in coming to a decision on whether to employ principal forgiveness or not,” he said. Additional Measures Coming The FHFA will announce additional measures to help troubled homeowners in the next few weeks, and is considering ways to structure a program that would include some money offered by Treasury, said a person familiar with the discussions. Other measures may include a program that would allow delinquent Fannie Mae and Freddie Mac borrowers to continue to live in their houses as renters after turning over the deeds, according to two people with knowledge of the matter. Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, has urged DeMarco to change the policy. “The issue here is about the numbers and the analysis and whether this is not only good for homeowners but also good for the taxpayer,” Donovan said during an April 8 television interview. DeMarco has been publicly lowering expectations that the Treasury incentives will lead to a large-scale principal- reduction proposal. He has been touting the companies’ existing mortgage-modification programs, which often involve reducing monthly payments by charging zero interest on a portion of a loan and deferring its repayment. More Effective Efforts The use of existing programs instead of principal forgiveness was endorsed today by the head of the American Bankers Association. “The taxpayers’ cost for principal reductions generally exceeds the benefit created,” ABA President Frank Keating said in statement issued by the industry group. “Modifying loans in ways other than reducing principal has proven to be more effective for troubled borrowers.” Fannie Mae and Freddie Mac have completed 1.1 million loan modifications since the end of 2008, and have engaged in more than 1 million other transactions to avert foreclosures, including short sales or repayment plans. FHFA at the end of last year expanded the Home Affordable Refinance Program to make more underwater borrowers eligible to refinance into loans at lower interest rates. Even with the additional Treasury payments, FHFA analysts are considering whether loan forgiveness would create new costs by encouraging defaults among underwater borrowers who kept making payments on their mortgages, DeMarco said last month. About 3 million borrowers are underwater on loans backed by Fannie Mae and Freddie Mac. Of those, three in four are current on their payments, DeMarco said. Encouraging Payment “This should be recognized and encouraged, not dampened with incentives for people not to continue paying,” he said during a Boston speech last week. In a January analysis sent to Congress, FHFA said it would cost Fannie Mae and Freddie Mac an additional $100 billion to write down all 3 million underwater loans to the value of the homes securing them. Far fewer loans would actually be candidates for principal forgiveness, even if FHFA changes its policy. Economist Dean Baker of the Center for Economic and Policy Research, who supports debt reduction, estimates that at best the tactic would help an additional 200,000 to 300,000 families keep their homes.

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“You just want it to to be a tool in your toolbox,” Baker said. “To say you’re not going to have it as a tool just seems crazy. On the other side, to say that it’s a huge game-changer, that the housing market is going to go booming is crazy.” Not All Helped Finance professor Anthony Sanders, who spoke on a panel today after DeMarco’s speech at the Brookings Institution, said reducing debt would not help many borrowers who have seen a long-term decline in their economic circumstances. “The only fraction of the population it might help are households that have a temporary decline in income due to either job loss of one of the members or they’ve had to cut back in hours,” said Sanders, who teaches at George Mason University in Fairfax, Virginia. While FHFA tries to decide what to do, private investors are increasingly finding that principal writedowns work, said Andrew Jakabovics, senior director of policy development at Enterprise Community Partners, who was also on the panel. “If the GSEs aren’t willing to do it, there are plenty of investors who are buying these notes,” he said. One solution might be a pilot program that would reduce principal by as little as 5 percent to 10 percent on some loans, while giving the government-sponsored lenders a share of the upside if the value of the home increases, said John Griffith, a policy analyst at the Center for American Progress, a Democratic-linked Washington organization. So-called “shared appreciation” agreements are being used by servicers such as Ocwen Financial Corp. (OCN) (OCN) Protecting Taxpayers The U.S. government has spent $190 billion to shore up Fannie Mae and Freddie Mac since they were taken into federal conservatorship in 2008 after their investments in risky loans soured. “From the perspective of FHFA, the main goal is to protect taxpayers,” Griffith said. “We need to make sure this principal reduction strategy is appropriate. We believe it is, for certain types of loans.” A loan writedown program that would include some form of shared appreciation “is being talked about,” DeMarco said. To contact the reporters on this story: Clea Benson in Washington at [email protected]; Cheyenne Hopkins in Washington at [email protected] To contact the editor responsible for this story: Maura Reynolds at [email protected] ^Back to top

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Commercial Property Executive April 10, 2012 Enterprise, Bellwether Merge Operations

^Back to top Economy Watch (an MSNBC blog) April 10, 2012 FHFA chief DeMarco loosens up a bit on principal reduction By John W. Schoen, Senior Producer The top regulator for 60 percent of America's home mortgages opened the door a bit on helping underwater homeowners through principal reduction, but he's not totally on the bus yet. Under pressure from Democrats in Congress, Edward DeMarco, the head of the Federal Housing Finance Agency, said Tuesday the idea might make sense, although more study was needed. He also repeated the reasons he has been opposed to the idea, including the risk that homeowners who aren’t in trouble will also ask to have their mortgage balances cut. “Most Americans that are underwater on their mortgage realize they've signed a contract, they’ve got an obligation to make that payment and in fact they are," DeMarco said in speech at the Brookings Institution in Washington D.C. They should be encouraged to do so, he added. Since the collapse of the housing market in 2006, the value of American homes has fallen by some $7 trillion, leaving roughly 11 million homeowners owing lenders more than their homes are worth. Those homeowners, unable to sell their house before they buy a new one, are effectively locked out of the housing market. Five years into the housing recession, they’re also more likely to consider walking away from their mortgage, adding to the backlog of foreclosures. To help stabilize the housing market, proponents of principal reduction argue that both homeowners and lenders are better off avoiding those defaults. The recent mortgage settlement between 49 states, several federal agencies and five large banks is hoping to promote the practice by providing those lenders with incentives to cut loan balances. "There is increasing data available, we believe, that shows that... principal reduction can be good not only for

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homeowners and communities, but for investors as well," Shaun Donovan, Secretary of Housing and Urban Development, told a Senate panel earlier this year. "It can allow people to pay [their bills], stay in their homes and increase the value of those mortgages." But those arguments haven't yet persuaded Edward DeMarco, head of the agency that regulates Fannie and Freddie, to begin cutting balances on the 29 million mortgages owned and overseen by Fannie and Freddie. On Tuesday, Demarco reviewed the track record of the other tools the agency is using to keep people in their homes or minimize losses to taxpayers when they can no longer afford to make their payments. Those include cutting the interest rate, extend the term of the loan or offering principal “forbearance” – which postpones the repayment of a portion of a loan balance, but doesn’t permanently reduce it. In his analysis, DeMarco repeated his contention that instituting a policy of cutting loan balances would cost taxpayers more than would relying on the existing tools to prevent defaults. He also cited data on Fannie Mae’s own loan modifications showing that lowering monthly payments is a more effective way of preventing defaults than cutting principal. But he left open the possibility that "Fannie Mae and Freddie Mac might apply principal forgiveness.” DeMarco said he expected to wrap up the agency’s latest review of the issue in a few weeks. So far, DeMarco has steadfastly refused to consider cutting mortgage loan balances in the face of months of sharp criticism, including a recent letter from more than 100 House Democrats, especially those in districts hit hardest by the housing collapse. In February, Democratic Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and committee member John Tierney (D-Mass.) said in a letter to DeMarco that his refusal to apply principal reduction was “ based more on ideology and the fear of political backlash than on a straightforward analysis of the interests of American taxpayers.” The debate took a bizarre twist last month when FHFA's inspector general, who is charged with detecting "fraud, waste and abuse" in the government-controlled mortgage giants, reported that Freddie Mac alone could save taxpayers “significant” sums of money if it pressed the companies servicing its mortgages to modify more loans. But the amounts to be saved were redacted at the request of FHFA "and/or" Freddie Mac, according to the report. Despite DeMarco’s latest review of mortgage writedowns, “the jury is still out on whether he will act to serve both homeowner and taxpayer best interests,” Cummings said in a statement Tuesday. Proponents of the idea argue that, if it's applied to defaulted mortgages that could be made to perform again, principal reduction would save money over the long term. “Private lenders are doing it for an increasing share of their (mortgage portfolios) when it makes sense,” said Andrew Jakabovics, a research director at Enterprise Community Partners, Inc. “If (Fannie and Freddie) aren’t willing to do it there are plenty of investors who are buying these notes because economically it makes a lot of sense.” The White House earlier this year said it would offer financial incentives, drawn from Troubled Asset Relief Program funds used to support other government mortgage programs, if Fannie and Freddie would adopt principal reduction as part of its mortgage relief efforts. So far, the government has spent more than $150 billion in taxpayer funds to prop up the money-losing mortgage agencies. Proponents of cutting some mortgage balances argue that the longer underwater homeowners consider their options, the more likely they are to walk away from their mortgage. Those “strategic” defaults would prolong the housing recession and force even more homeowners underwater. But DeMarco repeated his concern Tuesday that offering principal reduction could prompt other homeowners who are current on their loans to ask to have their loan balances cut.

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“The far larger group of underwater borrowers who today have remained faithful to paying their mortgage obligations are the much greater contingent risk to housing markets and to taxpayers,” DeMarco said in his Brookings speech Tuesday. Some private analysts say that risk may be unknowable. "We’re in uncharted territory in terms of how people behave,” said Mark Fleming, chief economist of CoreLogic, a real estate research firm. “But we do have an understanding that someone who is underwater is less willing (to keep up with their mortgage payments).” Do you think the FHFA should approve principal reductions? Let us know on Facebook. ^Back to top Market News International April 9, 2012 FHFA's DeMarco Finds Some Support In Principal Reduc Oppostn By Yali N'Diaye WASHINGTON (MNI) - With growing pressure from lawmakers and housing organizations to write down the principal on loans held by Fannie Mae and Freddie Mac, the Federal Housing Finance Agency, the regulator of the two mortgage giants, will likely appreciate some support in its opposition to such an initiative. Principal reduction on Fannie and Freddie's loans might not be worth the elevated cost to taxpayers when looking at the overall benefit for the U.S. housing market, according to some participants in a discussion panel to be hosted Tuesday by the Brookings Institution. A cost that moral hazard could potentially make significantly higher. "It has been well-publicized that there is one form of loan modification that FHFA has not embraced, that being principal forgiveness," FHFA Acting Director Ed DeMarco said in a recent speech. DeMarco will be the keynote speaker at the Brookings event Tuesday. "We are currently evaluating the recent Treasury Department proposal to HAMP regarding principal forgiveness and expect a decision this month," he added in an April 4 speech before the Boston Security Analysts Society. Noting that payment reduction, not loan-to-value, is the key indicator of success in loan modifications, he added that "the principal forbearance model being used by Fannie Mae and Freddie Mac produces the same, lower monthly payment as a modification based on principal forgiveness." Unlike, principal reduction, forbearance does not reduce the size of the loan but only defers payments. However, DeMarco view has not meet with a favorable reception among a number of lawmakers -- mostly Democrat -- and within the Obama administration, especially after the housing regulator released a previously-private analysis showing principal write downs of Fannie Mae and Freddie Mac loans would cost taxpayers more money compared to principal forbearance. So the Brookings Institution is asking its panel Tuesday if principal reduction is the answer to address the weakness in the housing market. The panel moderator and Brookings Co-Director of Economic Studies Ted Gayer told MNI Monday that "Even if you were to do principal reduction on those agency loans, you are only getting a small portion of the overall market."

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While it would be meaningful to the borrowers benefitting from the principal reduction, he said "it would be quite expensive," and in fact "more expensive than principal forbearance" or other loan modifications. So the question is whether principal reduction on those loans is worth it, he said, answering that it is not given the high cost -- especially if such a program encourages borrowers that are current on their loans to change their behavior in order to qualify for principal reduction. Besides, Gayer told MNI, "a lot of these loans are going to still foreclose even with the principal reduction." George Mason University School of Management Professor of Finance Anthony Sanders, another participant in the panel, also agrees with DeMarco. "If FHFA Director DeMarco believed that principal reductions were the silver bullet to cure the housing market's woes, he would authorize them," Sanders told MNI. But "forbearance is a better tool to help borrowers and protect taxpayers," he argued. "Throw in Bank of America's latest 'Mortgage to Rent' trial program, and we have better solutions than principal reductions," he concluded. And in a December testimony, CoreLogic Chief Economist Mark Fleming, another panelist, said "While principal reductions can quickly reduce negative equity, doing so increases moral hazard risk." Instead, "other efforts can play significant roles." Even those on the panel in favor of principal reduction on Fannie Mae and Freddie Mac's loans admit it is no silver bullet by itself and warn against moral hazard. Still, Andrew Jakabovics, Enterprise Community Partners Senior Director of Policy Development and Research told MNI that "taken in the context of existing efforts to prevent foreclosures and stabilize local housing prices, it is a much-needed tool in the arsenal." He pointed out that "Today, many banks and servicers have already begun to offer principal reduction, recognizing the high reperformance rates they are likely to get -- and thus greater value -- on those loans as compared to other modifications." Principal reduction could be helpful, agreed National Association of Realtors Chief Economist Lawrence Yun, who will not be on Tuesday's panel discussion. "Both private banks and FHFA should examine the cost effectiveness of the principal reduction," he told MNI, stressing the significant losses that foreclosures can cause. "So preventing foreclosures on some properties could be a better end-result for banks and FHFA, and naturally principal reduction could help lessen the strategic default incentives facing some homeowners," he said. "This in turn will help the housing market to recover more speedily." He cautioned, however, that "principal reduction carries difficult fairness questions about helping those who made lower down payments and those who overstretched their budget." "Therefore, the focus should first be with helping deeply underwater homeowners," he continued, "and who have been paying mortgages on time." "The focus should be less about helping people who are already defaulting and more about those who have been responsible but unfortunately got taken down because of the market conditions," Yun concluded. The Brookings event -- Addressing the Weak Housing Market: Is Principal Reduction the Answer? -- begins at 9:30 a.m. ET Tuesday. Panelists will also include Nomura Securities International Head of Mortgage Credit Research Paul Nikodem.

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** MNI Washington Bureau: 202-371-2121 ** ^Back to top MHN Online April 5, 2012 Affordable Housing Goes Green with $12 Million Energy Efficiency Program By Jessica Fiur, News Editor Columbia, Md.—By now, people are aware of how important going green is for the multifamily industry—it’s better for the environment, and it also often provides money-saving benefits. Because of this, Enterprise Community Partners Inc. has formed the National Multifamily Energy Services Collaborative (The Collaborative) with the Center for Neighborhood Technology Energy (CNT), LINC Housing and the Hispanic Housing Development Corporation. The Collaborative will design and implement green services for affordable multifamily properties. The Collaborative is a $12 million program. It received funding, leveraged and matched by Enterprise with public, private and philanthropic funding, from a recent grant of $2.8 million from the U.S. Department of Housing and Urban Development’s Energy Innovation funding. “There are a lot of entities all trying to figure [retrofitting] out, and that’s a real barrier to creating a scalable retrofit marketplace, because at the end of the day, there are no real standards or no real operating procedures to take advantage of the economies of scale that come when we’re all heading in the same direction,” Dana Bourland, vice president, Enterprise Green Communities, tells MHN. “It was our idea through The Collaborative that we would create a national platform to standardize the operating procedure to retrofitting existing multifamily affordable buildings.” Enterprise and CNT will standardize business plans, protocols, technical assistance and a shared data platform. LINC and HHDC will apply this standardized approach to delivering services to properties they own and operate. “We will work to standardize the approach to working with owners of portfolios and figuring out how best to assess the retrofitting opportunities in that portfolio, to engage the maintenance staff, to train residents and engage them in how to use the building, as well as standardizing how we’re collecting data and benchmarking the performance of buildings, how we’re measuring that there are indeed improvements, and also working on standardizing some of the financial vehicles to make these retrofits possible,” Bourland says. This program will explore the possibility of providing a new service delivery model that can be replicated and taken to scale. These services will include improvements made through operations and property maintenance practices to complete retrofits of multifamily properties, with the goal of reducing energy consumption an average of 20 percent. “What we’ll see is a reduction in energy usage,” Bourland says. “Other environmental benefits will be how we do the retrofit, and looking for ways to reuse materials we’re taking out and recycle the products that are coming out of the building as we’re replacing them. But the biggest environmental benefits are going to be the reduction in water usage and reduction in energy consumption.” According to Bourland, The Collaborative is a two-year effort from HUD, but she believes they’ll see results even sooner than that. “We’re thrilled to be working with such high-caliber partners in the collaborative,” Bourland says. “We’re really looking forward to sharing our learnings along the way and figuring out how to scale this sooner rather than later, and really improve as much of the existing multifamily affordable housing stock as we can.” ^Back to top

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MortgageOrb April 20, 2012 Nominations Sought For MetLife Affordable Housing Awards By MortgageOrb.com Nominations are now being accepted for the 2012 MetLife Foundation Awards for Excellence in Affordable Housing. Started in 1996, the awards showcase excellence in design, supportive services, operations and property management in affordable housing. This year, the four winning organizations will receive $50,000 each in unrestricted funds, a local recognition event and a commemorative plaque. Entries must be from recognized 501(c)(3) nonprofit organizations and indigenous tribes or tribally designated housing entities. Each entry will also need to include information on innovation in supportive services and green building technology. "The MetLife Foundation Awards are building momentum for the creation of innovative housing solutions to fulfill the unique housing needs of seniors," says Melinda Pollack, vice president of Enterprise Community Partners Inc., which co-sponsors the event with the MetLife Foundation. "The program recognizes communities that provide residents access to medical services, public transportation and wellness activities, allowing seniors to age in place in a green, healthy environment." Submissions for the 2012 MetLife Foundation Awards for Excellence in Affordable Housing must be received via online application by May 23. Application forms are available online. ^Back to top Nation's Cities Weekly April 16, 2012 Newsbriefs April 16 By Laura Turner Atlanta Conducts Housing Inventory Atlanta’s Department of Planning and Community Development (DPCD) is conducting a comprehensive housing inventory study and analysis to provide critical information on the economic challenges and opportunities regarding housing stock in neighborhoods throughout the city. The study is scheduled to be completed by fall. The analysis will be conducted in two phases. In the first, officials will assess Atlanta’s current residential stock. The second phase concludes with strategic recommendations for city leaders and key stakeholders to seek and attract investment opportunities in various neighborhoods. DPCD’s Office of Housing is leading the project with the support of Enterprise Community Partners Inc. and the Fulton County/City of Atlanta Land Bank Authority. The primary purpose of the study is to review the current dynamics impacting neighborhoods. Other objectives of the study include: identifying unmet housing needs, providing a market analysis for housing development, determining future housing trends and ways to implement them in areas of greatest need and creating housing recommendations that will allow for strategic investment based on empirical data. “With this comprehensive review of each neighborhood we will be better able to work with all stakeholders and identify plans that have the highest and most valuable impact,” said DPCD Commissioner James E. Shelby.

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A contractor is collecting, presenting and making recommendations to the city based on demographic data. The contractor is gathering and cataloging housing types, foreclosure data and inventories of commercial developments and other key information for the purpose of creating a data set that identifies specific and unique neighborhood characteristics. Details: Sonji Jacobs, director, mayor’s office of communications, at (404) 330-6558 or [email protected]. ^Back to top New York Nonprofit Press April 26, 2012 Enterprise & Habitat NYC Close $2.9 Mil Loan Deal Enterprise and Habitat for Humanity New York City have announced the closing of a $2.9 million loan, which will enable Habitat-NYC to acquire and rehabilitate three distressed multi-family buildings in the Bedford-Stuyvesant neighborhood of Brooklyn. The loan is the first toward a $5 million facility that will help finance the acquisition and rehabilitation of vacant properties in neighborhoods that have been significantly impacted by the economic downturn. It also supports Habitat-NYC’s ongoing effort, known as “100 Homes in Brooklyn,” to develop affordable homes in the Bedford Stuyvesant and Oceanhill-Brownsville sections of Brooklyn. In February 2010, Habitat-NYC was awarded a $20.6 million grant from the United States Department of Housing and Urban Development’s (HUD) Neighborhood Stabilization Program 2 (NSP2), which aims to create and preserve affordable housing in areas with high levels of foreclosure. Enterprise Community Loan Fund issued a $5 million revolving credit facility from its Stabilization Trust REO Capital Fund in 2011 to help Habitat-NYC leverage their NSP2 commitment. So far, over $500,000 of the $2.9 million loan has been distributed, with the remaining balance to be distributed in the next 6 months. “With the closing of this loan, we’ll be closer to reaching our goal of developing 100 affordable homes for the communities of Bedford-Stuyvesant and Ocean Hill-Brownsville, Brooklyn,” said Rachel Hyman, Acting Executive Director, Habitat for Humanity New York City. “We are excited to partner with Enterprise for this important neighborhood stabilization effort, and look forward to building additional homes for families in need.” “Closing this innovative debt facility and loan represents another important step in our ongoing effort to develop and rehabilitate New York City neighborhoods that have been hard hit by the housing crisis and affected by foreclosure,” said Abby Jo Sigal, Vice President and New York Market Leader, Enterprise. “We recognize the ongoing need for more capital and creative partnerships that will drive housing solutions to scale, and we’re thrilled to partner with Habitat for Humanity New York City, which shares our commitment to making affordable housing happen for all New Yorkers.” These buildings are located at 782, 784, and 786 Madison Street, Brooklyn, New York 11211. Substantial rehabilitation of these buildings has been complete prior to purchase by Habitat for Humanity New York City, Inc. The building at 782 Madison Street is anticipated to be purchased in July 2012 for $2 million. The other two buildings at 784 Madison Street and 786 Madison Street were both purchased in January 2012 for $2 million each. There are a total of 18 units in which six units will be 2BR and 12 units will be 3BR. These units will be sold to first-time homeowner New York City Resident families earning between 50-80% of Area Median Income, as published by HUD. These buildings are funded by approximately $4 million in HUD NSP Round 2 funds, and by approximately $3 million in funding from the Enterprise Community Loan fund. Interested homebuyers will obtain financing for these homes through the SONYMA Habitat-NYC Habitat for Humanity Mortgage Program. The program provides qualifying Habitat-NYC families 2% fixed rate 30- or 40- year mortgages with a 1% down payment. Additionally, SONYMA offers families up to $15,000 in down payment and closing cost assistance. Homes will be affordable to households earning between 50% -80% AMI.

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^Back to top New York Real Estate Journal April 24, 2012 Citi and Enterprise Community Loan Fund team up with Next Street New York, NY According to Citi Community Capital and Enterprise Community Loan Fund, they are investing a combined $30 million in the new Next Street Opportunity Fund aimed at igniting small business growth and hiring in the city and in Boston. The investing partners view the new fund as a prototype for potential expansion and roll-out to other cities. The initiative combines growth financing with the sophisticated expertise business owners need to expand in a tough environment. Next Street delivers financing and strategic advice to companies with annual revenues of $5 million to $60 million that are already significant employers in urban markets. The Opportunity Fund will support business owners in low- and moderate-income communities with strategic planning, organizational development and marketing services. Using the firm's advisory services is a requirement for access to the fund. In September of 2011, Citi unveiled a commitment of $24 billion in lending over three years: $7 billion in 2011, $8 billion in 2012 and $9 billion in 2013. In January of 2012, Citi revealed it had surpassed its 2011 commitment by over $900 million, for a total of $7.9 billion. Citi selected Next Street for the firm's unique track record in helping small companies grow. Data from the Boston-based research organization Initiative for a Competitive Inner City show that the most successful urban CEOs have powerful ties to their communities. Preserving local ownership and expanding job growth are objectives for the fund. The local nature of the fund was one of many reasons Enterprise found the fund attractive. "Management expertise is as critical as capital in getting a company to the next level," said Next Street president Ronald Walker, II. "We're bringing a Fortune 500 skill-set to urban small business." "We are proud to invest in the Next Street Opportunity Fund and show our deep commitment to supporting small businesses," said Vikram Pandit, Chief Executive Officer of Citigroup. "Helping small companies grow and create jobs strengthens our communities and is critical to the economic recovery. Partnering with Enterprise, we hope the initiative can become a model and expand to cities across the country." "Enterprise helps to create healthy, thriving communities," says Lori Chatman Enterprise Community Loan Fund President. "With the Next Street Opportunity Fund, we're looking forward to working with Citi and Next Street to provide greater access to employment opportunities and to increase investment in urban markets, both necessary components for successful neighborhoods." Next Street serves as a strategic advisor to the business owner, much like a private equity firm would for their investees, but growth financing is in the form of a loan, rather than a majority stake of the company. This makes the Next Street model more attractive than private equity to family-owned firms. Next Street founder Tim Ferguson describes the firm as a merchant bank for the urban enterprise. "We can make credit decisions based on a company's potential, not just its history, because we're inside the business working with the owner and her team helping them realize that potential." Citi, Enterprise, and Next Street expect that growth capital will begin flowing to high-potential small companies this year. ^Back to top

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New York Times April 5, 2012 Healthier Eating Starts on the Roof

FUTURE SALAD A rooftop community garden at the new Via Verde affordable housing complex now being marketed in the South Bronx. Ángel Franco/The New York Times By Alison Gregor

WHEN Yarittzi Estevez and her 8-year-old daughter, Aaliyah Rivers, planted collard greens, zucchini, lettuce and strawberries in their Brooklyn garden last year, they did not quite know what to expect. But one thing they never anticipated was competition from the native fauna. “Whatever was outside chewed up those zucchinis,” said Ms. Estevez, who lives in East New York and speculated that the culprit might be a squirrel. “When I went to pull them up, they were all bitten up.” Hearing a tale of wildlife destroying crops is certainly unusual in New York City. But opportunities for urban gardening are growing as developers, particularly those building subsidized housing, provide land or roof space for herb and vegetable gardens. One development is Liberty Apartments at 119 Fountain Avenue in East New York, where Ms. Estevez lives. The low-rise complex, developed by the Dunn Development Corporation of Brooklyn, has 43 affordable apartments and, at ground level, seven raised cedar planters, each shared by two tenants. Ms. Estevez, who moved into an apartment at Liberty when it opened just over a year ago, said the gardening opportunity was not what drew her to the complex. But she said she was quick to take advantage of it. “My daughter always wanted to do this, so that’s why I signed her up,” Ms. Estevez said. Last year, Liberty worked with the community group East New York Farms to assist residents with vegetable gardens. At Serviam Gardens, an affordable development for seniors at 323 East 198th Street in the Bronx, developers planted a garden for viewing, including one with herbs, on the rooftop. On the ground floor, they provided planters where tenants could garden. Serviam Gardens has 243 apartments, and about 40 residents have applied this year to share the 36 agricultural plots. Abby Jo Sigal, a vice president of Enter , a nonprofit group that served as a partner in developing Serviam Gardens, said affordable housing complexes, which are always trying to squeeze as many units as possible on a plot of land, may be where community gardens are most important. “One of the reasons that low-income communities are focused on green roofs is, often, low-income communities don’t have as much accessibility to open space as other neighborhoods,” she said.

prise Community Partners

At Via Verde, a new affordable housing complex being marketed in the South Bronx, what started as an idea to provide environmentally friendly green roofs back in 2005 turned into an opportunity to provide gardening

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plots for residents, said Paul Freitag, a managing director of development at the Jonathan Rose Companies, one of the development partners on Via Verde. At the time that Jonathan Rose and its partners were selected from among dozens of other contestants in January 2007 on the strength of its affordable housing proposal, thoughts about green roofs were morphing into ideas about urban agriculture, he said. “There was this real focus on community health and, in particular, eating healthy,” Mr. Freitag said. That focus corresponded to the release of a study showing that many children in low-income city neighborhoods had no conception of what a farm was, Mr. Freitag said. “Those concerns made us think, if we’ve got these gardens on the roof, why don’t we really make them community gardens,” he said, “and make them opportunities where people can grow food, and even more importantly, where children and community members can see food being grown.” Developers decided that Via Verde, which has 151 rental and 71 co-op apartments, would convert a fifth-floor green roof into a community garden for residents. The garden has already been planted this spring with everything from kohlrabi to kale by GrowNYC, a hands-on nonprofit organization that encourages environmental programs that was hired by the developers for two years. The goal of GrowNYC is to phase itself out by teaching residents how to garden themselves, Mr. Freitag said. To that end, GrowNYC will tutor residents on gardening and offer healthy-eating seminars and cooking demonstrations using fresh produce grown onsite, said Marcel Van Ooyen, the group’s executive director. Mr. Freitag said preliminary monitoring of the costs of converting Via Verde’s fifth-floor green roof to a gardening roof with built-in planters shows that urban agriculture can even be cheaper than providing an aesthetically pleasing but inaccessible green roof. Even so, market-rate developers are not yet offering rooftop gardens. But some residents are taking matters into their own hands. Tara K. Reddi, who lives in the Plymouth Tower co-op at 340 East 93rd Street, decided last year to start a vegetable garden on the roof for youngsters in the building. Ms. Reddi acquired enough planters for more than 1,500 square feet of garden, and parents and children worked together to prepare the plots. One of the crops children planted were strawberries that were supposed to reappear this year. “Those strawberries actually came back,” Ms. Reddi said. “We left them out on the roof deck, and I was told they should survive the winter. The project was wonderful,” she added. “The parents were positive, and the kids were having such a good time.”

A version of this article appeared in print on April 8, 2012, on page RE7 of the New York edition with the headline: Healthier Eating Starts on the Roof . ^Back to top NHC Open House Blog (The National Housing Conference) April 12, 2012 What to really worry about for the Housing Credit and the Volcker Rule By Peter Lawrence, Enterprise Community Partners NHC invites guest blog posters to write on important housing topics. The views expressed by guest posters do not necessarily reflect those of NHC or its members.

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As the Administration is approaching the July 2012 deadline to finish drafting regulations implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act, some in the affordable housing community are concerned that the regulations covering the law’s so-called “Volcker Rule,” named for former Federal Reserve Board of Governors Chairman Paul Volcker, would harm a bank’s ability to invest in the Low Income Housing Tax Credit (Housing Credit). A recent Marcus & Millichap alert (not available on the web) addressed this point. Concerns about the Volcker Rule and the Housing Credit, however, are really quite narrow and specific to bank sponsored funds, not bank investments in Housing Credits generally. Volcker originally conceived of the rule to ban proprietary trading by commercial banks whereby deposits are used to trade on the bank's personal accounts. However, banks’ ability to invest in Housing Credit funds is permitted under the rule, as the Act specifically includes an exemption for investments permitted under the Part 24 Public Welfare Investments authority derived from National Bank Act and related Office of the Comptroller of the Currency (OCC) regulations. However, there is some question as to whether the Volcker Rule permits banks to sponsor Housing Credit funds, as some banks who have invested in Housing Credit funds do. Dodd-Frank specifically allows banks to sponsor funds involving the Historic Rehabilitation Tax Credit, but it is uncertain whether the general ban on sponsoring funds in the rule also applies to the Housing Credit. The Housing Credit is the single largest federal program for development and preservation of affordable housing. Investment by banks in Housing Credit properties helps the program function—the Housing Credit is a proven and reliable (though not required) way to meet Community Reinvestment Act (CRA) obligations. Fortunately, banks ability to invest in Housing Credits is permitted, with clarification needed only around sponsorship. Peter Lawrence is the Senior Director for Public Policy & Government Affairs at Enterprise Community Partners, a member of the National Housing Conference's Leadership Circle. For 30 years, Enterprise has introduced solutions through public-private partnerships with financial institutions, governments, community organizations and other partners to create opportunity for low- and moderate income people through affordable housing in diverse, thriving communities. ^Back to top NHC Open House Blog (The National Housing Conference) April 27, 2012 Hearing highlights foreclosure crisis and response By Ethan Handelman, National Housing Conference On April 26th, the Congressional Progressive Caucus invited testimony from experts on the foreclosure crisis and ways to ameliorate it. Testifying at the were:

• New York State Attorney General Eric Schneiderman, who testified on the recent settlement between state attorneys-general and mortgage servicers and his Task Force’s ongoing investigations.

• John Griffith of the Center for American Progress, who spoke to the need for shared appreciation mortgages to restructure deeply underwater loans into sustainable loans, thereby preventing foreclosures and improving returns to lenders and investors.

• Ali Solis of Enterprise Community Partners, who testified to the many tools being used to prevent foreclosures and stabilize neighborhoods, including the Mortgage Resolution Fund, the Neighborhood Stabilization Program, note purchases, and other mortgage restructuring options.

A recurring theme in the hearing was a call for the Federal Housing Finance Agency to lift its blanket prohibition on mortgage modifications that reduce principal or share appreciation between borrower and lender. As both Mr. Griffith and Ms. Solis pointed out, if 1 in 4 modifications of privately-held mortgages include principal reduction, why shouldn’t the Fannie Mae and Freddie Mac loans have access to the same options?

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Questions from all attending members of the Caucus showed strong support for foreclosure prevention and a desire to do more to avert the damaging cycle of disinvestment that foreclosures can trigger. Representatives Ellison (MN) and Grijalva (AZ) co-chaired the hearing, attended by Representatives Jackson-Lee (TX), Nadler (NY), Woolsey (CA), Waters (CA), Schakowsky (IL), Hinchey (NY), and Clarke (NY). Links to the hearing testimony and video will be available on the Caucus web site. ^Back to top Novogradac Journal of Tax Credits April 2012 Low-Income Housing Tax Credits News Briefs Jamboree Housing Corporation announced the grand opening of Bonterra Apartment Homes, a workforce housing development that is part of a master-planned community in Brea, Calif. The property provides 94 garden-style units for families that earn between 30 and 60 percent of AMI. Bonterra encompasses seven three-story buildings linked by landscaped sidewalks and arranged around central courtyards. Along with surface parking areas for residents and guests, each apartment comes with a private garage. Amenities include community meeting rooms, a computer lab, a swimming pool with patio area, a tot lot, picnic areas and a central laundry facility. Financing for the property included tax-exempt bonds, 4 percent LIHTCs syndicated by Merritt Community Capital Corporation, $18 million in construction and permanent loans from Bank of America, $1.2 million in construction and permanent financing from the city of Brea, and $4 million in loans and HOME funds from Orange County. Additional funding came from the state Department of Housing & Community Development's Multifamily Housing Program, the American Recovery and Reinvestment Act, and Enterprise Community Loan Fund. ^Back to top

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Novogradac Journal of Tax Credits April 2012 CDFI Bond Guarantee: Below-the-Radar Opportunity to Increase Community Development Lending

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Novogradac Journal of Tax Credits April 2012 Affordable Neighborhood an Uplifting Addition to High-Income Area

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NPR April 11, 2012 Fannie, Freddie Weigh Mortgage Write-Downs By Chris Arnold Hundreds of thousands of homeowners facing foreclosure might get help by having the amount they owe reduced by Fannie Mae and Freddie Mac. This is a hot topic in Washington, D.C., with many Democrats pushing for these so-called "principal reductions" to try to help the housing market. On Tuesday, a top federal regulator came a step closer to allowing the move. NPR and ProPublica reported three weeks ago that Fannie and Freddie had each just completed a new analysis and found that principal reductions would save the government-owned enterprises money. Edward DeMarco, acting director of the Federal Housing Finance Agency, which controls Fannie and Freddie, has released the official figures from the agency's report. "In this analysis, principal reduction is better for the enterprises. ... It reduces ... [their] losses by $1.7 billion," DeMarco said. This is a big change. Fannie and Freddie are now owned by the government and control most of the home loans in the country. DeMarco has steadfastly resisted cutting the amount that borrowers owe, but now the Treasury Department has tripled an incentive through the Troubled Asset Relief Program, the bank bailout fund. Speaking at the Brookings Institution in Washington on Tuesday, DeMarco said if Fannie and Freddie do these write-downs, billions of dollars from the Treasury Department would be steered toward them. "The expected incentive payments ... would be $3.8 billion," he said. A Tax-Dollar Shell Game? Critics say this incentive amounts to a "shell game." By giving Fannie and Freddie taxpayer money from another source, the Treasury Department has made the write-downs look good on Fannie and Freddie's books, but the write-downs would still result in taxpayer expense. Proponents counter that it would help the housing market and taxpayers eventually. "Two-thirds of taxpayers are homeowners, and protecting housing markets and stabilizing communities all accrues to their benefit, too, so it's just where you draw the line on your analysis," says housing economist Andrew Jakabovics of the nonprofit Enterprise Community Partners. For years, Jakabovics has been an advocate of principal write-downs. DeMarco is not announcing any final decision yet, but reading the tea leaves in the speech, Jakobavics says he came away thinking "this $1.7 billion net positive to do it seems to mean that they're leaning into it." Whether or not they are "leaning into it kicking and screaming" is irrelevant, he says. The kicking and screaming refers to the fact that there has been pressure from the White House and Democrats in Congress for Fannie and Freddie to get more aggressive with foreclosure prevention. Many in that camp think principal write-downs should play a role. Jakabovics says this approach wouldn't be a silver bullet to fix housing. Some economists say it might reach several hundred thousand borrowers, and overall, Jakabovics says it would help.

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"I think this is a meaningful tool to be able to have in the arsenal," he says. Strategic Defaults Still, DeMarco did raise concerns about just writing off $20,000 or $50,000 of what a borrower owes. Even if that would save money compared to a foreclosure, DeMarco asked if forgiving debt for some delinquent homeowners might encourage others to stop paying their mortgages to try and get the same deal. "The far larger group of underwater borrowers, who today have remained faithful to paying their mortgage obligations, are the much greater contingent risk to housing markets and to taxpayers," he said. In other words, you don't want to encourage those homeowners to start defaulting on purpose. Jakabovics counters that if the FHFA were worried about that, it could get around the issue completely. For example, by only offering write-downs to people who have already defaulted, there would be no incentive created for anyone else to default. Jakabovics says the program could be designed in several other ways to reduce or eliminate the risk of strategic default. Out On The 'Hairy Edge' Some experts just don't like the unfair, free-lunch aspect of principal write-downs. For them, forgiving principal outright seems to cross a bright line and raise all manner of fairness and moral hazard concerns. Anthony Sanders, a professor of real estate finance at George Mason University, says this would be a "major shift in economic policy" and that there would be unintended consequences. "Do we really want to go out on the hairy edge, based on a few anecdotal assumptions that this might work?" Sanders asks. "I would argue no." For Sanders, the risks outweigh the benefits. For its part, the private sector has already embraced principal write-downs. Banks have started reducing principal to avoid foreclosure in nearly 1 out of 5 of the problem bank-owned loans they modify. DeMarco says he expects to decide whether Fannie and Freddie will do principal write-downs in the next few weeks.

The Principal Write-Down Debate Read a statement to NPR from Federal Housing Finance Agency Acting Director Edward DeMarco about proposals to reduce mortgage principal: "As I have stated previously, FHFA is considering HAMP incentives for principal reduction and we have been having discussions with the Enterprises [Fannie Mae and Freddie Mac] and Treasury regarding our analysis. FHFA's previously released analysis concluded that principal forgiveness did not provide benefits that were greater than principal forbearance as a loss mitigation tool. FHFA's assessment of the investor incentives now being offered will follow the previous evaluation, including consideration of the eligible universe, operational costs to implement such changes, and potential borrower incentive effects. As we complete the review, the public should understand that Fannie Mae and Freddie Mac continue to offer a broad array of assistance to troubled borrowers and have continued to implement HARP 2.0 to enhance refinancing opportunities for underwater borrowers. FHFA remains committed to its legal responsibilities as conservator to ensure assistance is offered to troubled borrowers while minimizing losses to taxpayers."

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Watch a video of the FHFA's DeMarco testifying before the Senate Banking Committee on Feb. 28. Read a blog post by Mark Calabria, director of financial regulation studies at the libertarian Cato Institute, in support of the FHFA's DeMarco. Read an online column by David Abromowitz, senior fellow at the liberal Center for American Progress, saying principal reduction is overdue. ^Back to top NPR April 16, 2012 Hoping For Payout, Investors Become Landlords By Chris Arnold The housing market has a new frontier — turning foreclosed homes into rental properties. Some big-time investors are starting to buy up thousands of homes to turn into rentals. That might help shore up home prices. But some housing advocates are nervous. For decades, most single-family homes available for rent have been owned by mom-and-pop landlords. Sometimes it's the nice old guy up the street who owns a couple of rental homes, and some even offer advice on the Internet. But, it's not just mom-and-pops anymore. With the collapse of the housing market, some professional investors with a lot of money smell an opportunity. Right now, there are fewer people able to own a house and more looking to rent. That's driving up rental costs. Meanwhile, there's a glut of foreclosed properties being sold on the cheap. Jack Macdowell, the chief investment officer of Carrington Capital Management, is looking to spend nearly half a billion dollars buying up foreclosed homes and turning them into rental houses. And he's not alone. Doug Brien, a managing director of Waypoint Homes in Oakland, Calif., is buying in California and around Phoenix. "We've purchased almost 1,300 homes; we actually bought 137 homes last month," he says. Brien, it turns out, is a retired NFL field goal kicker who played for the New Orleans Saints. "The entire time I was playing, I was investing in apartment buildings, learning that business, and when I retired in 2005 I went to work for a real estate investment firm for a couple of years," he says. One thing led to another and Brien co-founded this company buying up foreclosed homes. Now he's lined up $200 million from an investment firm. Brien says companies like his are looking to consolidate and professionalize the single-family home rental market. 'A New Industry' "This is a new industry that's unfolding, there are no brands," he says. "This is really an unprecedented opportunity for us to come into a new space and be the one to set the bar in terms of how this industry is going to be run." Still, there will definitely be challenges. Scott Simon is a managing director at PIMCO — a firm that's one of the biggest mortgage bond investors in the world. He says there's a reason the landlords are mostly mom-and-pops. "It works really well if you do them in your own neighborhood and you buy five homes and you manage them yourself. It gets a little dicier as you get to 100," Simon says. Managing more than a thousand homes in three or four cities — with broken furnaces, leaky roofs and people not paying rent — can present more of a challenge.

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"That scale gets somewhat dubious, the numbers aren't quite as good. But there's a tremendous amount of money in the private equity space, for example, that's chasing these kind of investments," Simon says. And, if it continues to grow, Simon says it's conceivable that these investors could convert a million or more foreclosed homes into rentals. That means they wouldn't be sitting for sale, weighing down the housing market. "And it would take off the excess supply, so it would actually be a very good thing for single-family housing," Simon says. But housing advocates have some concerns. Andrew Jakabovics is a policy director with Enterprise Community Partners, an affordable housing nonprofit. He says in the past, when speculators have started buying up a lot of houses, that's sometimes led to problems. "They would slap a coat of paint on the property, stick an unsuspecting household in there either as renters or as owners, and there would be no maintenance of the property, and so you'd have further deterioration of areas that were already hard hit by foreclosures," Jakabovics says. He wants to work with the government and investors to develop some safeguards and guidelines. Meanwhile, the government-owned mortgage giant Fannie Mae is starting to gear up to sell thousands of foreclosed properties through bulk sales to investors. ^Back to top OnCentral April 27, 2012 Plenty good news' at Epworth's grand opening By José Martinez │ April 20, 2012, 1:48 p.m. U.S. Congresswoman Maxine Waters laid out some startling statistics at Friday's grand opening of Epworth Apartments on Normandie Avenue. "According to the National Alliance to End Homelessness," she said, "there are now 636,000 people experiencing homelessness." Los Angeles' homeless situation is "especially dire," the representative of the 35th District added, mentioning that L.A. trails only New York in homeless population, with 57,000 homeless people on the streets on any given night. Of those, she said, 12-15,000 are children. That's the population targeted by the Epworth project. The brand-new apartment complex is comprised of 20 units, 19 of which will be affordable housing reserved for youth ages 18-25 who are homeless, aging out of the foster care system or recommended by the L.A. County Probation Department. The program also said that the housing is for youth who "have a severe emotional disorder or mental illness." "South L.A. has a high percentage of young people aging out of the foster care system," said Mark Wilson, the executive director of the Coalition for Responsible Community Development (CRCD), a nonprofit that collaborates with community members to improve quality of life in the area. "That makes this project even more important." Wilson went on to say residents wouldn't have to worry about getting kicked out. "These are permanent supportive housing units," he said. "There will be nobody knocking on the door saying to leave. There will be a knock on the door, but it will be for services."

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On-site support services, to be precise. The complex also includes a community room, a garden and counseling rooms. CRCD was a general partner and co-developer of the project, along with United Methodist Ministries, Los Angeles District. The lead developer was LTSC Community Development Corporation. A slew of funders, including the L.A. County Department of Mental Health and the Enterprise Foundation, financed the $8-million project. "This is what we have dreamed about: permanent, supportive housing for the homeless," said Waters. "That's what we're all working toward. This is how you get things done – with people working together." The upcoming 20-year anniversary of the South Central riots was also on a couple of the speaker's minds, including County Supervisor Mark Ridley Thomas'. "But today," he said, "We look with a sense of good news. Plenty good news here at Epworth Apartments." "It's just so telling that this project is opening just a few days before the 20-year anniversary of the Los Angeles uprising," said Wilson. "And it just shows you how far we've come, and how far we have to go." Ridley-Thomas said the county provided $3.5 million of the project's nearly $8-million price tag. "This is our role, our interpretation of stewardship," he said. "There is no more worthy group than these emancipated people who are trying to make their way through life." Waters, who has pushed congressional legislation to combat the country's homelessness problem, also pointed out that young people who age out of the foster care system are "at an especially high risk of homelessness," saying one in 11 young people leaving foster care will experience homelessness. Ruth Teague, the Los Angeles director for the Corporation for Supportive Housing (CSH) said that now that these youth will have housing of their own, they can begin to build their lives. CSH provided the initial acquisition funding for the project. "I would like to say welcome home," said Teague. "And thank you for giving our lives purpose, meaning and hope." ^Back to top PBS NewsHour April 24, 2012 After the Fall: Have Government Programs Helped Ailing Housing Market? SUMMARY Underscoring ongoing struggles years after the mortgage meltdown, the National Association of Realtors reported March home sales fell more than 7 percent. Part of a new series called "After the Fall" on what's happened since the financial crisis, Judy Woodruff and guests discuss what's clouded an already unstable housing market. Transcript JUDY WOODRUFF: The signs of strain were evident again today in the U.S. housing market. The latest numbers highlighted how tough it's been to fix a vital economic sector. Tonight, we look at the housing news as we begin a series, "After the Fall," on how Wall Street, the economy, and financial regulation have changed since the crisis of 2008. Builders have been cutting back on housing construction, but, in March, there were still more new homes for

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sale than people wanted to buy. The National Association of Realtors reports sales last month fell over 7 percent, the most in more than a year. Overall, some 328,000 homes sold, less than half the rate in a healthy market. And a closely watched index found home prices fell 1 percent as well. They have been falling for six months in a row. Overall, the data underscored just how much the housing market continues to struggle four years after the mortgage meltdown. The Bush and Obama administrations both created programs to stem foreclosures, but they have come up short. One program designed to help four million homeowners refinance has led to just about 900,000 permanent loan modifications so far. President Obama acknowledged the shortcomings in February. PRESIDENT BARACK OBAMA: I will be honest. The programs that we put forward haven't worked at the scale that we hoped. Too many families haven't been able to take advantage of the low rates, because falling prices lock them out of the market. They were underwater, made it more difficult for them to refinance. JUDY WOODRUFF: The Republican presidential nominee-apparent, Mitt Romney, has dismissed the idea of a separate plan to fix housing. MITT ROMNEY (R): There's an effort on the part of people in Washington to think somehow they know better than markets how to rebalance America's economy. The right course is to let markets work. And in order to get markets to work and to help people, the best we can do is to get the economy going. JUDY WOODRUFF: Meanwhile, a new wave of foreclosures is building. In February, about half of the 50 states reported sharp increases in foreclosure activity. With more than four million homes foreclosed on since 2007, and the housing market struggling, we assess efforts by the government and lenders to deal with the problem. Andrew Jakabovics is head of research at Enterprise Community Partners, an affordable housing nonprofit. He was, until recently, an adviser at the Department of Housing and Urban Development. And Mark Calabria is a director of financial regulation studies at the Cato Institute and a former Republican staff member for the Senate Committee on Banking, Housing, and Urban Affairs. And, gentlemen, it's good to have you both with us. MARK CALABRIA, Cato Institute: Great to be here. ANDREW JAKABOVICS, Head of Research at Enterprise Community Partners*: Thank you. JUDY WOODRUFF: Thank you. Mark Calabria, let me start with you. Did the programs that were instituted by the government under both President Bush and President Obama, did they address the problem, how much, how little? MARK CALABRIA: Well, I think both -- and I think would say this is nonpartisan, because I do think that the Obama administration largely continued the same thing of the Bush administration, which to my extent was to put off the problem, to kick the can down the road in a lot of ways. I look at the fundamental issue of our housing market as a combination of weak demand and excess supply. And so some of these things were of course aimed at keeping foreclosures off the market, which would lower supply, but ultimately they drove out the problem.

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You know, I'm of the opinion that if we had taken the 30 percent decline in six months, rather than four years, we'd be in a much healthier spot today. So I think ultimately market fundamentals asserted themselves, whether you wanted them to or not. It was really a matter of the speed of adjustment. JUDY WOODRUFF: And you're saying the measures that were taken by the government made the problem worse? MARK CALABRIA: In many cases, I do think that they did. For instance, I do think you encouraged people to stay in place. I like to use my stylized example of if you're a carpenter in Tampa, you're not going to find a job in Tampa as a carpenter any time soon. That market is way overbuilt. But if you have a situation where you can be in that house for potentially two years or more without paying rent and you're getting unemployment insurance, you really have very little incentive to maybe move to Austin or Atlanta or Dallas or somewhere that is creating jobs. So I think to some extent, these programs have put our labor market in limbo and I think that that's been detrimental. I also think to some extent you've kicked the can down the road. Almost half of foreclosures today are people who were previously in foreclosure at some point in the past. So again I think you need to separate out the homebuyers we can help from those who we can't help and try to speed that process along. JUDY WOODRUFF: Andrew Jakabovics, how do you see government measures that have been taken? ANDREW JAKABOVICS: So, I actually think that Mark's analysis of sort of what the problem is in terms of oversupply and weak demand is right. But I think that the efforts that have been made to date certainly have fallen short of what I think have been needed to really restore the market to its normal health. But, by and large, we're better off today with those programs available than had we let the market fall. I think the risk of overcorrection and the spillover effects -- a foreclosure doesn't just impact an individual. It impacts their neighbors; it impacts their communities. And understanding what that does to the prices more globally of a single foreclosure and then obviously concentrated foreclosures, those impacts are significant. JUDY WOODRUFF: So what are just a couple of examples of where you think it's worked? ANDREW JAKABOVICS: I think fact -- we haven't really talked about it as a policy much. We talk a lot about the modification programs. We talk about the refinancing opportunities. JUDY WOODRUFF: Making it easier for people to. . . ANDREW JAKABOVICS: To make their mortgage payments. JUDY WOODRUFF: Right. ANDREW JAKABOVICS: Reducing -- HAMP, which is the Home Affordable Modification Program, borrowers who apply for assistance, they have to demonstrate hardship, but they also have to demonstrate an ability to make payments at least at 31 percent of their income. So it's not sort of a freebie by any stretch of the imagination. And unfortunately the way it's been executed I think leaves a lot to be desired in terms of it's very hard for a lot of folks to actually get the assistance they might qualify for. JUDY WOODRUFF: But, on balance, you think it's better having had these programs than not? ANDREW JAKABOVICS: Without a doubt. MARK CALABRIA: Judy, if I could make two points really quick.

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JUDY WOODRUFF: Sure. MARK CALABRIA: One, there is a simple empirical question of, did we stop more foreclosures than we would have had otherwise? And this is not a difference between whether, do we have this foreclosure two years ago or today? I would say we simply don't know the answer to that. My suspicious is that the vast majority of these were foreclosures that were going to happen otherwise. But what really concerns me, to go back to my supply question is, what builders look at -- and in the typical market, when a home is 30 percent, 40 percent -- and so I remember these stories where -- is like, I'm going to build underneath the foreclosure point. And so my point is, if you put efforts to keep prices up, you encourage more construction by builders, which actually in the long run adds to the glut, so you end up with more supply than you would have otherwise if prices had fallen faster. You really want prices to get below construction costs, so you can encourage builders. And I say that in recognition that constructions have been at historic lows, but they have still been quite positive. JUDY WOODRUFF: What more do you think -- do you want to respond to that? ANDREW JAKABOVICS: Well, I just think that -- right, I think we are at historic lows. And it's a question of where that construction is taking place. Not all markets have been hit equally. And certainly the places that have fallen the furthest, there's basically no new construction because the excess supply both of unsold newly constructed homes, as well as just the available properties that have been through foreclosure, or individuals who want to just simply put their home up for sale to take advantage of low interest rates or move someplace else I think are really important as well. JUDY WOODRUFF: What have you seen, Andrew Jakabovics, in the behavior of banks and of lenders? What's changed in the last few years? ANDREW JAKABOVICS: Well, I certainly think that when the crisis hit, the way they approached borrowers who were delinquent was one of just debt collection. Our borrowers are deadbeats. I think the language has significantly changed. It used to be about loss mitigation. How do we kind of squeeze every last drop out of a borrower? And I think the mind-set is now about loan modification. How do we work with a borrower to be able to keep them in their home? And I think that the consistent theme, at least the way the administration has rolled out its programs, has always been with a sensitivity to what the value of the property is at the end of the day, the value to the investor. So it's less -- I would love to have seen greater assistance to homeowners, but it's within recognition of the fact that at the end of the day there are existing contracts and we need to respect the investors who these. . . JUDY WOODRUFF: For example, writing down the principle. That wasn't something that wasn't done -- wasn't talked about until much more recently. ANDREW JAKABOVICS: Right. I would have liked to actually have seen that far earlier on in the policy conversation. I think it's a very powerful tool that can right-size the mortgage market, sort of squeeze out the excess pricing, and really to the extent that it encourages people to stay in their homes and make their payments I think can be a powerful tool.

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MARK CALABRIA: And I want to emphasize something that I fully agree here with Andrew, that our system prior to crisis was really set up to be a foreclosure system. It wasn't a loss mitigation system. It was, originate a loan, sell it into a mortgage-backed security. The trustee demands you foreclose it. So it really was not set up in that way. If you go back to, say, pre-the S&L crisis, when we had a deposit-based system, you went to your local lender and you got a loan, you went to him when you got in trouble. You talked to them. They weighed your situation, and sometimes you got a modification. So I think one of the things we need to keep in mind going forward when we look at what our mortgage finance system should be is that the advantages of a deposit system give you more flexibility to do modifications than the securitization system we have embraced. So I do think we need to question whether we want to have a mortgage system so reliant on securitization in the future. JUDY WOODRUFF: Well, let -- and let me ask you both, just to conclude, by looking ahead. Where do you see the housing market headed right now? Mark Calabria, do you see people want who want to buy a home having the option of buying a home? MARK CALABRIA: To caveat that, if you have good credit and you can put a down payment -- otherwise, FHA is really the only other option for low down payment. And even they have increased their standards. So certainly at this point in time, I think that there's a lack of creditability for marginal borrowers. And certainly some of the credit that. . . JUDY WOODRUFF: But do you see that changing? MARK CALABRIA: Not a lot, honestly. I think credit availability is going to be a problem. I think it's going to moderate a little bit. I also think we're getting close to hitting bottom in prices. We have another like maybe 2 or 3 percentage points over the year, but I actually think we're getting near bottom. And I would not have said that six months ago. JUDY WOODRUFF: Andrew Jakabovics, how do you see the future near term? ANDREW JAKABOVICS: Near term, I agreement with Mark. I think we're probably sort of bouncing along the bottom. But I think certainly think that the issue of credit availability, particularly for places that have been hard-hit by foreclosures, there's not a whole lot of ability for someone who wants to buy in these places to come in simply because of the tight credit. Folks who can get the credit will certainly choose places where the prices have fallen significantly and can now get into some really fancy houses at much lower costs than they could have a couple years ago. So the places that have been really hard-hit are the ones that are continuing to struggle. JUDY WOODRUFF: Well, I have a feeling that people are going to be hanging on every good syllable, positive syllable out of your mouths. MARK CALABRIA: They should keep in mind that despite some of the comments of the Federal Reserve, interest rates -- mortgage rates are as low as they're going to get. And they're not going to stay this low forever.

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JUDY WOODRUFF: And that's something to keep in mind as well. MARK CALABRIA: Exactly. JUDY WOODRUFF: Mark Calabria, Andrew Jakabovics, we thank you both. MARK CALABRIA: Thank you. ANDREW JAKABOVICS: Thank you. ^Back to top San Francisco Examiner April 2, 2012 New homes for needy are first of many in San Francisco By Ari Burack, SF Examiner Staff Writer Mayor Ed Lee and other city officials joined developers and homeless advocates Monday at a ceremony marking what Lee promised would be the first of many affordable-housing developments for the homeless and poor in The City. The eight-story, 120-unit apartment building at Folsom and Essex streets, one of the first affordable-housing developments in the South of Market redevelopment area where the new Transbay Transit Center will be built, is expected to be completed in September 2013. Once opened, it will provide studios and one-bedroom apartments for the homeless, as well as counseling and supportive services. “Ensuring affordable housing in this neighborhood is a top priority,” district Supervisor Jane Kim said. Rich Gross of project investors Enterprise Community Partners noted the impediments to getting such a development done. “Affordable housing is very difficult to do in California, and getting more difficult,” Gross said, citing tax and property management issues, among others. The complex is named for Rene Cazenave, a longtime San Francisco affordable-housing advocate who died in 2010. Cazenave’s friend Calvin Welch credited Lee for trying to bring together the public and private sector to fill the gap left by California’s elimination of redevelopment agencies statewide. “Confronted by a nihilist, antisocial philosophy that says we cannot afford health care, public education and affordable housing for the broad majority of our fellows, both national and state governments have withdrawn their support for affordable housing,” Welch said. Lee called the project “transformative,” noting that The City has a plan to build at least 3,000 units of affordable housing in the next 10 years. “This project … gets us to about 1,977 of that commitment,” Lee said. “And we still have to move forward.” ^Back to top San Francisco Structures (San Francisco Business Times blog) April 2, 2012 Bridge, Community Housing break ground on Transbay affordable project San Francisco Business Times by J.K. Dineen, Reporter

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Community Housing Partnership and Bridge Housing are breaking ground today on the Rene Cazenave Apartments today at 25 Essex St., a $42.7 million affordable housing project in San Francisco's Transbay Redevelopment Area. The eight-story building will provide 120 supportive housing apartments: 12 one-bedrooms and 108 studios. All residents will be extremely low income, formerly homeless individuals referred by the San Francisco Department of Public Health's Direct Access to Housing program. The building, on the corner of Folsom Street, is named in memory of Rene Cazenave, a founding board member of Community Housing Partnership who was at the center of the affordable housing movement in San Francisco for over 40 years. The property will include three retail spaces totaling 3,395 square feet. UCSF's Citywide Case Management Services will deliver counseling and supportive services on site. Other features include a resident lounge, a green roof, a small community garden and 24-hour front desk service. On-site property management offices will be staffed by Community Housing Partnership. The project is the first new residential development on a stretch of Folsom Street that is slated to become a pedestrian-oriented, retail-heavy "main drag" of the Transbay neighborhood. Financing for the $42.7 million project is being provided by San Francisco Redevelopment Agency, Enterprise Community Investment, Wells Fargo Bank, California Department of Housing & Community Development , Silicon Valley Bank, Federal Home Loan Bank of San Francisco, California Housing Finance Agency, California Tax Credit Allocation Committee and the San Francisco Department of Public Health. This project was made possible thanks in part to financing provided to the San Francisco Redevelopment Agency by the Transbay Joint Powers Authority , which helped fund the development of the affordable housing parcel. The architects are Leddy Maytum Stacy Architects and Saida + Sullivan D ^Back to top Switchboard (Natural Resources Defense Council blog) April 6, 2012 "Culturally appropriate, healthy and affordable housing" for Native American communities

This looks like a great project from Enterprise Community Partners: "The Sustainable Native Communities Collaborative, an initiative of Enterprise Community Partners, supports culturally and environmentally sustainable affordable housing appropriate to American Indian communities nationwide. We help to build capacity through building relationships, focusing on core values specific to each place and rooted in the spirit, the community and the land. Through technical assistance and research of best practices, we can help a community to reduce their impact on the natural world, gain self-sufficiency and provide solutions for culturally appropriate, healthy and affordable housing":

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Sustainable Native Communities Collaborative from Adventure Pictures on Vimeo. The collaborative is supported by the National Endowment for the Arts. For more information on its activities, start here. Related posts: • A new Native American village based on tradition helps a Tribe reclaim its sustainable roots (February

8, 2012) • Let's link the working rural landscape to the sustainability agenda (with Lee Epstein) (March 1, 2012) • Does the sustainable communities agenda have something to offer rural America? (December 7,

2011) Kaid Benfield writes (almost) daily about community, development, and the environment. For more posts, see his blog's home page. ^Back to top Sustainable Business Oregon April 10, 2012 Nonprofit building project steps forward By Christina Williams The Barn building, sketched here by independent building designer Matt Sykes, would be located in the Eastside Industrial District in a bid to provide cheap rents and a central location. The nonprofit Barn project, which aims to build an office building explicitly to host nonprofit organizations, held a series of events last week including design workshops with an eye toward opening for business by 2015. A project of MotiveSpace, the Barn is looking to locate a building in Portland's Eastside Industrial Area that would provide a stable, inexpensive office space for up to 30 nonprofit groups. "What we're proposing is very obvious to us: A building full of nonprofits should be run like a nonprofit," said Sara Garrett, MotiveSpace's executive director. Rather than looking to make a profit off the building's development, Barn will reinvest any surplus into the building and building services. The project got a boost with a grant to get the up-front work done from Meyer Memorial Trust. The building's budget is $27 million for 120,000 square feet. Garrett said the size may shrink as the financing piece of the puzzle is penciled out between additional grants and investment along with a loan from the Enterprise Community Loan Fund, a popular nonprofit lender.

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"We're hoping to be open no later than 2015," Garrett said. MotiveSpace has about 40 groups interested in moving into Barn, which will offer rents that are 15 percent below the market. Gerding Edlen is the development partner on the project and SERA Architects of Portland was also involved in helping with the design process. Early versions of the design (see sketches in the gallery above) show a building topped by an ecoroof and solar panels. ^Back to top Tax Credit Advisor April 2012 NH&RA News NH&RA Members Receive HUD Energy Innovation Awards Four companies and organizations that belong to NH&RA are among the dozen entities receiving $23 million in grants from HUD's Energy Innovation Fund. The grants will help the recipients test new approaches for implementing and funding energy-saving upgrades to older affordable multifamily rental housing projects that could become models for financing such energy retrofits on a wider scale in the future. The NH&RA members are: Enterprise Community Partners, Inc., New York, N.Y. - $2,795,071, to develop a model called the National Multifamily Energy Services Collaborative (NMESC) to assist community development corporations in incorporating energy efficiency practices into affordable housing development, preservation, and management. Focusing on Southern California and the New York City and Chicago areas, NMESC will offer owners a comprehensive and standardized package of services to improve energy efficiency in multifamily projects, ranging from improvements to operations to complete retrofits. Columbus Property Management & Development, Inc., Philadelphia, Pa. - $3,000,000, to retrofit 100 of its scattered-site multifamily housing units in the Philadelphia area, making various energy efficiency upgrades and installing in some of these units display devices that show tenants their electricity consumption. The demonstration is designed to test the impact of multifamily property energy efficiency upgrades on consumption and whether in-unit display devices enhance tenant awareness of energy usage and foster energy-saving behaviors. Maryland Department of Housing and Community Development, Crownsville, Md. - $1,250,000, to assist selected multifamily properties with grants to cover certain soft costs (e.g., energy assessments) and loans to finance energy conservation measures. MDHCD will subordinate its current junior debt on those properties to the new, energy efficiency loan. The demonstration is designed to illustrate the ability of housing finance agencies to implement large-scale energy efficiency loan programs accessing private capital to finance energy efficiency improvements to properties in their portfolios. NRG Solutions LLC (an affiliate of WinnCompanies), Boston, Mass. - $5,250,000, to establish a loan fund utilizing private capital to finance utility efficiency projects in low-income multifamily housing properties. NRG will develop a collaborative service delivery mechanism designed to increase transparency, competition, quality, and capacity in the multifamily building energy services industry. There will be innovative credit enhancement provided to the fund, including an energy savings guarantee that will insure against loss if the projected energy savings are not realized and will help to standardize the methodology used to model future energy savings through energy-specific underwriting. The multifamily efficiency fund will be integrated with an energy services company (ESCO) to deliver turnkey energy services to selected properties. ^Back to top

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The Latest Word (a Denver Westword blog) April 10, 2012 Mile High Connects finds access and equity gaps in city's public transit By Kelsey Whipple Since its 2010 launch, Mile High Connects has taken a long, hard, scientific look at Denver's transit system. Formed as a collaboration between nonprofit leaders and philanthropies, the group analyzed the equity and access of area transportation. The findings, which focus heavily on the distance between public transit and low-income housing, take into consideration ten years of data uncovered between 2000 and 2010 to create the Denver Regional Equity Atlas, released today. On view below, the atlas analyzes the Current Denver Region Transit System in preparation for decades of work on FasTracks, the large-scale transportation program scheduled for completion in 2042. At a release party for the data held at the Denver Art Museum this morning, none of the event's keynote speakers spoke favorably of the three-decade wait period, instead urging the creation of a voter-approved tax increase to move up the unveiling to 2024. But before moving forward, organizers pointed out a few kinks for the city to straighten out. Some of the findings are obvious, such as the indication that Denver's ethnic communities are highly concentrated by race. But other figures outline flaws in the transit system that will need to be addressed down the line. For instance, new service options leave out the southwest area, and even when all the new stations and lines are installed, a heavy handful of low-income neighborhoods will still be too far away to reach them. In addition, the city's elderly population, those 55 and older, is increasing in areas where it's tough to access transit, and the majority of the city's affordable housing is not near transit. The data presented by MileHigh Connects is intended as a wake-up call, and Mayor Michael Hancock is not the only person to have called the city's transit situation a "once-in-a-lifetime opportunity" this morning. When Hancock began his time with the Denver City Council in 2003, he says, the Stapleton area housed only 3,000 people, as opposed to the 13,000 who live there today. And by 2030, Denver's population is slated to increase by 1.3 million. Such growth demands an increase in sustainable transportation, the mayor says, and a focus on making it equally accessible to all sections of the population. "Transit is more than just moving people place to place," Hancock says. Like his fellow speakers, he stressed the importance of acting for the next generation, despite being unable to reap the benefits. "A robust transit system also helps with the economic vitality of the region. Our city is experiencing tremendous growth, and we have to keep pace. We won't have this (opportunity) again, and it would be not very responsible to leave it to the next generation." As the transit system exists, those who live in lower income areas are less able to take advantage of its access to their jobs, schools and needs, says Melinda Pollack, vice president of Enterprise Community Partners. And the system is in need of additional connections through bike and pedestrian paths in order to make it accessible in the first place. "We know that the demand for affordable housing will continue to be extremely high," Pollack says. "We know that we've only made a drop in the bucket. Here in the region, we significantly lack legislation to reinforce affordable housing where it's needed the most." When the morning's keynote speakers finished their addresses and the floor opened to attendees, the discussion quickly changed to the near future. The data, presented in detail through artful maps, is a rallying point, attendees said, but 2042 is still far in the future. What can be done in the meantime? The answer is part sales, to package the need for equity improvements as an economic development issue to make it more immediate. The second half of the equation depends on resources and the potential for a tax increase to speed the process up. But Gene Myers, owner and CEO of New Town Builders, sees the cycle of research and calls to action -- a system he participated in on a panel this morning -- as counterproductive. "We start the studies, but we

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already know what the answers are," Myers says. "There aren't enough resources. We need to stop studying and start doing. Until we get there, we're going to have another conference and another study about it, and my vote is to stop the death march." Read the Regional Equity Atlas in full here. ^Back to top The Real Deal April 6, 2012 City’s affordable developers provide urban gardens Warehouses in Brooklyn and western Queens aren’t the only New York City properties getting rooftop gardens. According to the New York Times, more affordable housing developers in the outer boroughs are including them in buildings. For example, Via Verde, the 222-unit rental and co-op building in the South Bronx, converted a fifth-floor green roof into a community garden for residents. The city chose Jonathan Rose Companies to develop the complex because of its green proposal and the conversion was made as a response to growing health concerns in impoverished neighborhoods. “One of the reasons that low-income communities are focused on green roofs is, often, low-income communities don’t have as much accessibility to open space as other neighborhoods,” said Abby Jo Sigal, a vice president of Enterprise Community Partners, which developed Serviam Gardens. Serviam Gardens is an affordable senior development on East 198th Street in the Bronx that, along with Liberty Apartments on Fountain Avenue in East New York, offers more examples of affordable complexes that have followed the initiative. [NYT] ^Back to top TIME.com April 11, 2012 Is Fannie and Freddie Honcho Ed DeMarco “America’s Most Dangerous Man?” By Christopher Matthews Ed DeMarco, acting head of the Federal Housing Finance Agency (FHFA), doesn’t have the look of a comic-book super-villain, but if you listen to some of the barbs his critics hurl at him, DeMarco is more dastardly than The Joker or Magneto. Peter Goodman, Business Editor at the Huffington Post has called DeMarco “America’s most dangerous man.” The liberal activist group MoveOn has been petitioning for DeMarco’s ouster writing, “What would it take to save millions of homes and billions of dollars in taxpayer money? Replacing one man—Ed DeMarco.” That’s pretty harsh stuff. So what is getting DeMarco’s (mostly left-leaning) critics all bent out of shape? DeMarco has repeatedly fought back against calls for Fannie Mae and Freddie Mac, the Government Sponsored Enterprises (GSE’s) overseen by the FHFA, to forgive underwater homeowners some of the principal they owe. For these critics, principal forgiveness is a win-win. Homeowners would see the amount they owe on their home drastically reduced, but the taxpayers who now own Fannie and Freddie would benefit too because principal forgiveness is the best way to avoid a costly foreclosure process. Proponents of principal reduction also believe that it would be a great way to stimulate the economy. As TIME’s Bill Saporito has argued, ridding American homeowners of some of its $700 billion in negative home equity would be a huge boon to the economy by making homeowners more confident to invest or take on new debt, and by enabling people to move to find new and better work opportunities. So why has DeMarco been so steadfast in his opposition to this approach? First of all, he doesn’t agree with the principal reduction crowd’s math. He has repeatedly argued that reducing principal won’t prevent more foreclosures, and will cost taxpayers more than methods the FHFA is already using to keep people in their homes. As for the stimulus argument, he is sticking to the mandate Congress gave him – which dictates he

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must protect taxpayer assets and promote stability and liquidity in the housing market. Notice this doesn’t say anything about using Fannie and Freddie to implement stimulus strategies. DeMarco seems to be taking the criticism in stride. Unlike many of the left’s other financial crisis arch-villains, you can’t really accuse DeMarco of acting out of greed or self-interest. A career civil servant, Mr. DeMarco could probably take his Ph.D in economics and go make a great deal more money working in private-sector housing finance. He is enduring withering criticism from the left while putting up with a frustrating lack of action from Congress. By all appearances, DeMarco is an economist who has studied the problem at hand, and believes he is not only obeying his Congressional mandate, but also pursuing the best path forward for the housing market. Yesterday, DeMarco took to the Brookings Institute to defend his beliefs. In his speech, he provided an overview of the many programs FHFA has offered, in conjunction with the Treasury Department, to try to keep people in their homes while offering them some form of relief. He presented the results of previous FHFA analyses, which showed that using principal forgiveness, as opposed to other methods like principal forbearance, is more costly to the taxpayer and doesn’t necessarily do more to keep homeowners in their homes. In December of last year, the Treasury Department, using leftover funds from the TARP bailout, tripled the incentives for home-loan modifications. Given these new incentives, DeMarco has changed his tune a bit. In his speech yesterday, he revealed a new analysis showing that principal reduction may actually save the GSEs more money than other methods of foreclosure prevention. The net benefit to taxpayers, however, might be negligible, since these Treasury incentives are ultimately coming from the taxpayer as well. Even given these new developments, DeMarco was hesitant to endorse principal reduction as a strategy for healing the housing market. One reservation is the up-front cost to the GSEs for implementing new systems for principal reductions. If the programs the FHFA currently has are already working, DeMarco argues, there is no need to spend time and money developing new systems for preventing foreclosure. Second, DeMarco is concerned that if the FHFA begins a widespread principal reduction program, borrowers will be incentivized to become “strategic modifiers.” That is, borrowers may try to manipulate the system by missing payments they can afford to make, or otherwise try to appear to be in financial hardship, in order to qualify for principal reduction. In a panel following DeMarco’s speech, there was some pushback to DeMarco’s arguments. Andrew Jakabovics, senior director at Enterprise Community Partners, argued that DeMarco was overstating the risk that borrowers would strategically default. Given the complexity of the factors that determine which borrowers would qualify for principal forgiveness and the other considerable incentives homeowners have to stay current on their loans, Jakabovics thinks that strategic defaults would be rare. Furthermore, he maintained that principal forgiveness is necessary for the housing market as a whole, and by allowing what’s owed on mortgages generally to reflect what the houses are actually worth, the FHFA would promote a much more healthy economy. While there may be arguments that widespread principal reduction would be good for the economy as a whole, DeMarco clearly does not want to go down that road without further Congressional action. The FHFA will come out with a final analysis of this approach given the new Treasury Department incentives in the coming weeks, but if DeMarco’s speech is any indication, principal reduction will not be a large part of the agency’s strategy going forward. So if you’re in the camp that believes in this kind of action, DeMarco may indeed be your public enemy #1. Of course, we do have a Congress that could fix this at any time, if they were motivated to force DeMarco to act. ^Back to top

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TIME.com April 17, 2012 Building a Better Bailout: Can Fannie and Freddie Help American Homeowners? By Christopher Matthews Since the financial crisis, American taxpayers have collectively made all sorts of investments that would have been unthinkable ten years ago. We bought stakes in the auto and insurance industries and, perhaps most significantly, the residential housing market. Fannie Mae and Freddie Mac, the Government Sponsored Entities (GSEs) that the American government has taken under conservatorship, own or guarantee 60% of the outstanding mortgages in America. That’s right, we are financially exposed to over 48 million mortgages. If a given home owner pays back his loan, plus interest, we’ll make a nice return on the investment. But if that homeowner defaults, we’re all on the hook for the loss. Ed DeMarco, the man in charge of these two GSEs, therefore has a lot riding on his shoulders. When Congress passed the law allowing the federal government to take over Fannie and Freddie at the height of the financial crisis, it gave DeMarco’s Federal Housing Finance Agency (FHFA) two mandates: to prevent further loses on mortgages that the taxpayers now owned, and to continue to promote the stability of and liquidity in the U.S. housing market. DeMarco’s problem is just how to go about achieving these goals. The housing market has entered uncharted territory. Between 2005 and 2011, according to the Federal Reserve, the total decline in housing wealth has been over $7 trillion. The total amount of “negative equity” (that is, the amount owed on American homes that are “underwater” minus their combined market value) is over $700 billion. Simply put, the taxpaying public owns a whole bunch of questionable loans that will probably continue to cost us money. DeMarco spoke last week at the Brookings Institute about this problem, and made clear that he believes the best strategy going forward is something called “principal forbearance,” under which Fannie and Freddie will temporarily reduce the amount owed on a mortgage until the mortgage matures or the homeowner sells his house. To illustrate how this program might work, let’s look at the fictional case of Joe from Nevada. In 2004, Joe bought a $250,000 home for his family, putting 20% down and taking out a 30-year mortgage to cover the remaining $200,000. Then the financial crisis struck. Home prices across the nation, and especially in Nevada, collapsed. Joe’s wife was laid off from her job, cutting the family’s income in half. Today, Joe’s house is worth only $125,000. To this you might say, “Tough luck Joe; you shouldn’t have bought an overvalued house.” But the collapse in the value of Joe’s house isn’t only Joe’s problem; it’s also the problem of whomever loaned him that $200,000. Because Joe might decide to walk away from his house, which can only be resold for $125,000, and walk away from the commitment to pay the remaining $75,000 on the mortgage. And, via Fannie and Freddie, taxpayers are on the hook for that $75,000. Principal forbearance is meant to prevent that outcome. In Joe’s case, Fannie and Freddie would temporarily set aside the $75,000, interest free, and allow Joe to pay back his mortgage as if he owed only what his house is currently worth. He will eventually have to pay back the entire amount loan, but in the meantime he lowers his monthly housing costs, in some cases for decades. That will theoretically give his wife time to find another job, and in the best-case scenario, time for the market price of his home to appreciate to its previous value. This strategy obviously helps homeowners. But it also can benefit taxpayers because of a feature called “shared appreciation”: In exchange for the forbearance, the lender gets part of the upside if the home appreciates. If Fannie and Freddie were instead to write down the value of the loan altogether — this is the “principle reduction” strategy that many critics of DeMarco are advocating — taxpayers would take a loss even if the home regains its value over the next several years. So forbearance sounds like a win-win, right? In theory, yes — but some experts think there’s a big flaw in the theory. Namely, they believe that loan forbearance will not be as effective as loan forgiveness at convincing homeowners to continue paying off their loans. Andrew Jakabovics, for example, a senior director

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at Enterprise Community Partners, says that there are powerful psychological incentives associated with principal forgiveness: “Borrowers feel reinvested in their homes.” Indeed, the evidence shows that when lenders write down the value of a loan, mortgagors are much less likely to default again down the road. That explains why, Jakabovics argues, private sector lenders are moving towards principal forgiveness as opposed to forbearance. “It’s the private guys that are doing next-generation modifications, whereas the GSEs had been leading earlier in the process.” In fact, he says that private banks are allowing principal reductions for roughly 18% of the loans on their books, while Fannie and Freddie are sticking solely with principal forbearance. So why isn’t DeMarco as open to forgiveness as private lenders ? Ted Gayer, a housing economist with the Brookings Institute who moderated last week’s discussion, thinks it’s partially a product of considerations other than profit and loss. A truly effective principal forgiveness program entails giving a handout worth tens of thousands of dollars to those some would consider the least responsible homeowners — i.e. those who are willing to walk away from their mortgage obligations — and that’s not politically palatable. In practice, principal forgiveness would probably have to be made available to so many homeowners that it wouldn’t save taxpayer money. “I think DeMarco would say, ‘Yeah, in certain cases principal reduction would make sense, but I can’t pick and choose.’ Fannie and Freddie have 3 million underwater homes and it’s hard to design a policy that is that selective.” Ultimately, Gayer says, “If it’s going to be an all or nothing, then maybe forbearance is the way to go.” ^Back to top USATODAY.com April 15, 2012 Opposing view: Allow principal reduction This is an opposing view to a USA TODAY editorial entitled “Forgiving mortgage principal invites more risks”. By Andrew Jakabovics Solutions to the foreclosure crisis will require many tools. Principal reduction should be one of them. Under the Home Affordable Modification Program (HAMP), modifications are offered only to families facing mortgage hardships when the net present value to investors of a modification is greater than allowing the property to go into foreclosure. Since October 2010, HAMP servicers have been required to evaluate borrowers for principal reductions on loans not owned by Fannie Mae or Freddie Mac or insured by the FHA or VA. As a result, nearly 16% of HAMP modifications at the end of last year included some write-down of the loan balance. Banks reduce principal more than a quarter of the time for the mortgages they own. For them, the economics of principal reduction clearly make sense. The current policy discussion is limited to whether this approach should be extended to Fannie Mae and Freddie Mac — whether they should offer principal reductions when it is more advantageous to them, and therefore taxpayers, than alternative modifications or letting a home go into foreclosure. Setting aside the question of basic fairness — two otherwise identically situated families can have wildly divergent outcomes solely based on where their mortgage ended up, which is entirely out of their hands — it runs counter to the goals of the agency that oversees Fannie and Freddie to preclude principal reduction. By its own preliminary analysis, allowing principal reduction would save Fannie and Freddie $1.7 billion compared with current practices. Unlike forbearance, which leaves a lead balloon payment hanging over homeowners' heads — due on sale or when the last mortgage payment is made — principal reduction doesn't trap owners in their otherwise underwater properties. Over the long term, that looming balloon payment increases the likelihood of the

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borrower suffering another hardship, and another default. Principal reduction can be a powerful way to reach sustainable modifications. Given the complexity of the housing crisis, we should approach it with a full toolbox. Andrew Jakabovics is senior director of policy development and research at Enterprise Community Partners. ^Back to top Woodworking Network April 18, 2012 CBS EcoMedia and FSC Join Hands By Rich Christianson MINNEAPOLIS, MN - The EcoMedia Division of CBS has launched a partnership with the Forest Stewardship Council U.S. to help fund environmental conservation projects nationwide. Through the partnership, FSC will identify environmental programs. EcoMedia will provide funding to support these projects through its EcoAd program. Potential projects include family forest initiatives, watershed protection and climate change mitigation, according to FSC. In addition to FSC, CBS's EcoMedia announced it had signed agreements with four other national nonprofit organizations, including the National Fish and Wildlife Foundation (NFWF), Waterkeeper Alliance, Enterprise Community Partners and Volunteers of America. EcoMedia already had an alliance in place with the Trust for Public Land and National Association of Counties. CBS launched EcoMedia in 2002. Portions of monies collected from television, radio and billboard advertisers that purchase EcoAds are donated to fund EcoMedia projects. Corey Brinkema, president of FSC U.S., said, “We welcome this opportunity to partner with EcoMedia and the advertisers of CBS to drive improvements on the ground in forests all across America." Paul Polizzotto, president and founder of CBS EcoMedia Inc., said, “This alliance gives our EcoAd program national reach, and we are proud to be able to fund environmental initiatives on such a large scale.” Recently EcoMedia announced the expansion of its program to target aiding education and wellness initiatives. ^Back to top Bronx Times April 13, 2012 Nearly 1,150 Bronx apartments retrofitted By Kirsten Sanchez Some 1,150 Bronxites will be warmer this year thanks to Enterprise Community Partners and Local Initiatives Support Corporation. The two corporations recently retrofitted nearly 1,150 apartments in the Bronx as part of the state’s Weatherization Assistance Program. They were selected by the state to weatherize 41 buildings throughout the Bronx, and created 200 temporary construction jobs, trained workers in green building maintenance, and expect 24% energy and 23% carbon emission reduction.

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The funds came through the state’s Weatherization Assistance Program, working in partnership with New York State Homes and Community Renewal and the New York City Department of Housing Preservation and Development. “By weatherizing more buildings within our budget, we proved that not only is it possible to make existing affordable housing more energy efficient, but that it’s possible to do it in a cost-effective and sustainable way,” said Abby Jo Sigal, vice president and New York market leader of Enterprise. “We hope our lessons learned will help to enable other community development organizations to green their properties, extend the lives of their buildings, lower their operating costs and create healthier, affordable homes for low-income families.” Mayor Bloomberg’s New Housing Marketplace Plan is a multibillion dollar initiative to finance 165,000 units of affordable housing for half a million New Yorkers by the close of the 2014 fiscal year. To date, the plan has funded the creation or preservation of more than 129,200 units of affordable housing across the five boroughs. Neldo Angeles, property manager for Dougert Management, said that the training was especially helpful for their four supers in the Bronx because of the focus on fundamentals. “With all of their responsibilities to the buildings’ residents, they tend to ‘forget the little things’ that are important to the efficient, safe, and comfortable operation of their systems,” Angeles said. “The opportunity for a dedicated training that schools new supers on the fundamentals and gives experienced supers the brush-up they need is an important component of a comprehensive weatherization program.” Denise Scott, managing director of New York City LISC and vice president of New York Equity Fund said the weatherization program was effective by not only cutting energy costs but by providing education the building owners as well. “We blew insulation into the walls and replaced leaky windows and replaced rusted boilers with high-efficiency ones,” said Denise Scott, managing director of New York City LISC and vice president of New York Equity Fund. “We also taught property managers and building maintenance staff how to operate those computerized boilers. So now, not only will low-income renters save on their utility bills—$20 more a month can mean a lot to a family—the people who run their buildings have new skills.” ^Back to top

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Brooklyn Daily Eagle April 2, 2012 Greening of Brooklyn Apartments Achieved By Nonprofits Enterprise, LISC Close to 350 Affordable Units Weatherized

One of the 28 Brooklyn buildings that were retrofitted. Image courtesy of Enterprise Compiled by Linda Collins, Brooklyn Daily Eagle BROOKLYN — Close to 350 apartments in Brooklyn were recently retrofitted as part of the state’s Weatherization Assistance Program, essentially “greening” 28 affordable housing buildings in the borough. It was part of an $18 million citywide effort involving more than 2,200 low income housing units (95 buildings citywide) through a partnership of nonprofit affordable housing leaders Enterprise Community Partners and Local Initiatives Support Corporation (LISC) and city and state agencies. Although Enterprise wishes to omit publishing specific addresses, the buildings in Brooklyn that have been retrofitted include 13 in Greenpoint (142 apartments), 10 in Bedford-Stuyvesant/Crown Heights (122 apartments), four in Bushwick/Williamsburg (68 apartments) and one in the Downtown Brooklyn area (7 apartments). In addition to funds from the Weatherization Assistance Program, funds came from NYS Homes and Community Renewal (HCR) and the NYC Department of Housing Preservation and Development (HPD). Selected by the state for the project, the two nonprofit entities also created some 200 temporary construction jobs and trained workers in green building maintenance. They expect a 24 percent energy savings and a 23 percent carbon emission reduction. Critical to the program’s success, according to an Enterprise spokesperson, was active resident engagement, a focus on portfolios instead of individual buildings and post-construction monitoring to make sure that the intended savings will be realized. Enterprise and LISC were also able to weatherize 4 percent more buildings and units than originally planned.

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Pictured is one of the workers trained in green building maintenance as part of the recent weatherization of 28 affordable apartment buildings in Brooklyn. “By weatherizing more buildings within our budget, we proved that not only is it possible to make existing affordable housing more energy efficient, it’s possible to do it in a cost-effective and sustainable way,” said Enterprise’s Abby Jo Sigal. “We hope our lessons learned will help to enable other community development organizations to green their properties, extend the lives of their buildings, lower their operating costs and create healthier, affordable homes for low-income families.” Officials also believe the project demonstrated that community-based housing organizations can manage buildings in more energy-efficient ways using available technology and will help inform the dialogue with policymakers and the financial industry on the importance of green retrofits for affordable housing. ^Back to top City Limits April 23, 2012 For Some Landlords, It's Not Easy Going Green If New York is to meet PlanNYC's goals, apartment buildings must get greener. While property owners and tenants both benefit from more efficient systems, getting them up and running takes a different kind of green. By Patrick Arden Morrisania - At the bottom of a hill on 168th Street is the old Morrisania Hospital, an elegant yellow-brick structure surrounded by apartment blocks in the South Bronx. The city abandoned the building during the fiscal crisis of the mid-1970s, and for 20 years the once-grand hospital sat empty and windowless, its interior a ruin open to the elements. Nancy Biberman, president of the Women's Housing and Economic Development Corporation, recognized the building’s potential, and a gut rehab produced 132 apartments for low-income and formerly homeless families, with health- and child-care centers, plus a commercial kitchen for small start-up businesses. The 1997 project won accolades, but soon WHEDco faced an unanticipated crisis. “This building was going to tank the organization,” recalls Biberman, who says tenants routinely opened their windows in the winter to cool down overheated rooms. “We literally saw money blowing out the windows, and it was bleeding us.” Raising rents was out of the question. “But it would be irresponsible to continue to let things go. We would have gone bankrupt.” The solution was an energy-efficient retrofit of the building, now known as Urban Horizons. But once WHEDco began to realize savings on such measures as low-flow water fixtures, energy-efficient appliances, and

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compact-fluorescent lightbulbs—and tenants saw their electricity bills decline—the search for green solutions turned into a permanent, evolving process. The organization even hired a sustainability manager. WHEDco’s experience with Urban Horizons may ultimately be a valuable example in a city with an old housing stock and little available land. It provides one roadmap for existing structures to comply with stricter laws, as the Bloomberg administration implements regulations to make multifamily buildings more energy efficient and to stop the use of the most polluting grades of heating oil. The new rules will reduce energy consumption and bring down costs over the long term, but they also could put a more immediate strain on affordable housing. New rules for a greener city The city aims to slash carbon emissions 30 percent by the year 2030, blaming air pollution for 3,000 annual deaths and twice that number of emergency-room visits for asthma. The only way to achieve this goal is by increasing the energy efficiency of buildings, because buildings account for three-quarters of carbon emissions. About 85 percent of buildings were constructed before the availability of energy-efficient technology, according to the mayor’s Office of Long-term Planning and Sustainability, so the new laws address the process of retrofitting, or the installation of new equipment in older buildings. Last year, large apartment buildings had to start reporting their annual use of energy and water, forming benchmarks for improvement. Next year they’ll have to pay for energy audits, which will survey buildings and recommend measures to bring down consumption. In July, buildings will begin to eliminate the use of the dirtiest heating oil. Though the city claims only 1 percent of buildings burn the dirtiest oil—about 9,000 properties citywide—their boilers are blamed for 86 percent of all soot from buildings. Last summer a report by Manhattan Borough President Scott Stringer’s office found 63 percent of the boilers burning dirty oil are in buildings with rent-regulated units. The city has set a timetable for all apartment buildings to stop burning dirty oil. But the conversion to cleaner fuels is expensive. And soon, tenants may start feeling those costs. The Rent Stabilization Association, which represents 25,000 landlords, has vowed to make the added costs of boiler conversions and compliance with the new laws a major part of its argument for higher rent hikes during this spring’s deliberations of the Rent Guidelines Board. A roadmap for retrofits From the day WHEDco opened Urban Horizons, the 70-year-old building was running an operating deficit. “The rents never supported the true costs of building,” says Biberman. “It was an energy guzzler. At the time, we did the best we could, but we were clueless: Green wasn’t in the vocabulary in 1996, other than the color.” While energy-efficient technology could be found in single-family homes, it remained a rarity in apartment buildings, especially affordable ones, explains Valerie Neng, WHEDco’s sustainability manager. By the time she joined WHEDco in 2007, however, the nonprofit was completing Intervale Green—a brand-new green building in Crotona East. Neneg was drawn by Biderman’s green approach, which not only lowered long-term costs but included nontoxic building materials as well as education and training, all informed by an overriding concern with our relationship to the environment. At Intervale Green, this approach even led to the creation of a rooftop farm, where tenants could grow vegetables. Money for green technology was readily available for new buildings like Intervale, adding only 2 to 3 percent to the cost of construction, but it was harder to finance the retrofitting of Urban Horizons, says Neng. “We had to cobble together sources.” Funds came from the New York State Energy Research and Development Authority (NYSERDA), the Bronx Borough President, and private foundations, as well as from tapping into the building’s equity. The state’s Weatherization Assistance Program helped with lighting, energy-efficient refrigerators, and low-flow showerheads. Power for Jobs, a program by the New York Power Authority (now

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called ReCharge New York), provided discounted electricity. Con Edison also gave incentives for equipment upgrades. “We first picked the low-hanging fruit: Weather stripping, air sealing, lighting, appliances, faucet aerators—the things you can knock out quickly at the lowest cost,” Neng says. Each tenant pays for electricity, and within the first three months, bills declined on average by 6 percent, compared to an 8.3 percent average increase citywide. Low-hanging fruit also has the shortest payback period, but that doesn’t mean these fixes are all cheap. “Under four years is a good payback period for any building owner,” says Neng. Now WHEDco is looking at longer-term paybacks from more extensive ventilation work, the replacement of 15 old boilers with 4 high-efficiency ones, and the installation of cogeneration equipment for the on-site production of electricity from natural gas. “Natural gas costs a lot less than electricity,” Neng says. The cogeneration equipment will reduce transmission losses from the power plant and reliance on the grid. “And the electricity’s waste heat is captured and used to heat hot water. We’re going to see huge savings—we’re talking about $100,000 to $150,000 a year. But the investment is close to half a million dollars.” Finding the green for affordability Efforts are underway to help more nonprofit housing developers foot that kind of bill. The Local Initiatives Support Corporation, or LISC, has long financed the rehabilitation of low-income housing and provided grants and technical assistance to community organizations. Now it’s helping affordable-housing groups to make green investments. It recently provided money for the first solar-thermal system at a HUD-subsidized building. That system, on the roof of a six-story apartment building in Bedford-Stuyvestant, will heat the water for 52 units. Earlier this year, LISC, with Enterprise Community Partners, invested $18 million in the energy-efficient retrofitting of 2,226 affordable apartments in Brooklyn, the Bronx, Manhattan, and Queens. Most of the money came through the state's Weatherization Assistance Program, which had received federal economic stimulus funds. After work was complete, LISC educated tenants and building superintendents on equipment operation and more basic energy-saving measures, such as unplugging appliances so they stop drawing electricity when not in use. LISC is now tracking these buildings’ energy and water consumption. It is using an online grading system called EnergyScoreCard, developed by Bright Power, and will provide quarterly updates to the housing groups, encouraging them to use the same system to track energy and water utilization in their other buildings as well. “We’d like to figure out which retrofit measures have the biggest impact,” says Colleen Flynn, who oversees LISC’s green efforts in New York City. “If in general we see reductions in operation costs over time, we could actually build in retrofits when we’re underwriting affordable housing deals. That way we wouldn’t have to rely on federal grants to do [retrofits].” Sarah Hovde, the director of policy and research at LISC NYC, notes that Deutsche Bank just released its own study on the benefits of financing energy-efficient retrofits in multifamily buildings. “They’re trying to get at the same thing: Creating more certainty for lenders about what different retrofit measures will produce in the way of savings, and then you can bank that into your financing numbers.” Landlords complain of costs While nonprofit housing providers are finding ways to fund green technology, many private building owners express confusion about how best to comply with the new rules. Jim Buckley, executive director of the nonprofit University Neighborhood Housing Program in the Bronx, says

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the buildings in his portfolio switched to natural gas long ago. But he’s heard from area coops concerned about how they’ll pay for boiler conversions. “People have known that this is coming for a little bit, but as the deadline is getting closer there are a number of issues that have kept them from finalizing what they want to do.” One of those biggest issues is that natural gas is unavailable in parts of New York City. “If you’re fortunate enough to be close to a good heating gas supply, the cost could be fairly minimal,” Buckley says. “If you’re farther away, the cost could be substantial.” These owners would have to pick up the cost of installing their own gas line, whereas buildings close to gas supplies get hooked up for free. Installing a line could cost unlucky building owners hundreds of thousands of dollars, says Frank Ricci, the director of government affairs for the Rent Stabilization Association. “The city should have given buildings more time to plan for this,” he says, noting that the mayor announced the new boiler rule in April 2011. “It would have also allowed Con Ed and National Grid to expand their network. But the city, they’re zealots on this. Even in a building where the hookup to Con Ed is zero, there are a lot of other costs.” If buildings can convert to natural gas, they might still need to add a lining to their chimneys and install a flue pipe system from the basement to the roof, which could cost of as much as $10,000 per floor. The city has vowed to help owners find financing and to develop investors through Energy Services Agreements. At least one gas provider, Hess Energy Solutions, will take care of the conversion from oil burners if building owners make the company their sole supplier. Hess would then take advantage of government incentives for owners to make the switch as well as a possible rebate from National Grid. The city hired a private company to guide building owners through the conversion process and to work with utilities on their behalf, but Ricci says, “The feedback we’ve gotten so far is that it’s not been very helpful.” He’d like the city to assist landlords without gas service to form “clusters” with other, neighboring building owners, thereby providing an incentive for natural-gas providers to service the area. In the current circumstances, he believes many of the affected building owners will opt to switch from dirty #6 heating oil to #4 oil, instead of choosing the much-cleaner #2 oil or natural gas, but this is just a stopgap measure. All buildings must convert to the cleanest fuels—#2 oil, biodiesel, natural gas, or steam—by 2030 or when replacing a boiler. At one time, #6 oil was much cheaper than #4 oil, but recently the difference has lessened. Owners converting to #4 oil may require only $3,000 to $7,000 for updated equipment. Yet new operating permits will require new inspections of old buildings, and Ricci’s afraid these owners will ultimately be looking at tens of thousands of dollars in additional expenses to come up to code. “That’s no excuse, but the reality is this is a big hit for a lot of buildings to come up with this money, especially if they’re in a neighborhood with low rents,” he says. Those taking the road of least resistance to #4 oil will have missed an opportunity to save money over years, cautions Jonathan Braman of Bright Power, the developer of the EnergyScoreCard. Last year Bright Power was the city’s leading energy auditor. “The energy hogs really use a lot of energy.” Small is beautiful For the last three years, Benny Quezada has lived in Intervale Green with his wife and three daughters. When they came to New York from the Dominican Republican in 2006, they lived in a single room in his mother’s house. Then they moved to a one-bedroom apartment in the Wakefield neighborhood. Now they’re in a new three-bedroom, two-bath apartment for $1,100 a month, and Quezada finally feels at home. It still required an adjustment, he says. As part of WHEDco’s green programming, tenants can attend classes where they learn how to reduce electricity consumption, operate such equipment as dual-flush toilets, and prepare nontoxic cleaning solutions. “Right away my electric bill went from $200 to $150,” he says. “My last bill was about $80.” Most of the savings, he believes, was due to his putting appliances on power cords and shutting them off when not in use. “I’m also saving money on cleaning stuff, using vinegar in the kitchen, baking soda in the laundry. My wife uses less bleach and more baking soda. It’s better for the fabric, and better for the planet,” he says.

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Quezada missed nature in the big city, but now he and his youngest daughter plant vegetables on the building’s roof. “We grow herbs, beans, lettuce, tomatoes--it’s all really good,” he says. “Each of these things was a small step, but they add up to a beautiful place.” ^Back to top Planetizen April 16, 2012 For Affordable Housing in NYC, a Bountiful Harvest Posted by: Ryan Lue Alison Gregor highlights efforts by affordable housing developers to implement edible community gardens, bringing fresh food and neighborhood ties to inner-city tenants. Residents of some affordable housing projects in New York City are getting their hands dirty, thanks to new community gardening programs spearheaded by developers. At Liberty Apartments in East New York, for example, Dunn Development Corporation offers seven raised garden beds to residents of its 43 apartments. Gregor explains, "[Yarittzi] Estevez, who moved into an apartment at Liberty when it opened just over a year ago, said the gardening opportunity was not what drew her to the complex. But she said she was quick to take advantage of it" at the behest of her 8-year-old daughter, Aaliyah. Serviam Gardens in the Bronx likewise installed 36 plots to, which about 40 of its 243 households have applied to use. "One of the reasons that low-income communities are focused on green roofs is, often, low-income communities don't have as much accessibility to open space as other neighborhoods," said Abby Jo Sigal, a vice president at nonprofit Enterprise Community Partners. At Via Verde, another affordable housing project in South Bronx, residents can work on a fifth-floor roof garden. "Preliminary monitoring of the costs of converting Via Verde’s fifth-floor green roof to a gardening roof with built-in planters shows that urban agriculture can even be cheaper than providing an aesthetically pleasing but inaccessible green roof," writes Gregor. "Even so, market-rate developers are not yet offering rooftop gardens." Full Story: Healthier Eating Starts on the Roof Source: The New York Times, April 5, 2012 ^Back to top