NTU Urges Appropriators to Include Data Collection Transparency in T-HUD Bill

Dear Chairman Shelby and Vice Chairman Leahy:

 

Over the coming days, you and your colleagues will be finalizing a version of the Transportation, and Housing and Urban Development (T-HUD) appropriations bill for Fiscal Year 2020. On behalf of National Taxpayers Union, the nation’s oldest taxpayer advocacy organization, I write to urge the inclusion of language that will promote data collection and transparency at the Department of Housing and Urban Development (HUD). Enabling HUD to utilize additional data in future rulemaking proceedings will result in more carefully-crafted policies that improve America’s housing finance system while mitigating taxpayer risk.

 

Given the Federal Housing Administration’s (FHA) sizeable loan portfolio - all of which is directly backed by the federal government - it is crucial FHA and HUD use the most accurate data to reach financially sound conclusions. Possessing precise and predictive data is key to conducting the analysis that support such conclusions, yet, strangely, HUD elects to forgo up-to-date data in some of their rulemaking processes.

 

For instance, in a recent Mortgagee Letter, HUD announced adjustments to down payment assistance (DPA) program requirements to reduce “programmatic risk” and thereby lock out certain governmental entities from the market. Despite the well-intended purpose of protecting the Mutual Mortgage Insurance Fund from undue risk, Secretary Carson has acknowledged HUD did not have data to support its conclusions on the matter. Making rushed decisions, especially regarding potential impacts on the housing market, runs counter to FHA’s role being “executed responsibly for borrowers and taxpayers.”

 

Before creating any new rules or policies that restrict how secondary financing is presently being provided, we believe Congress should obligate HUD to collect more data. Currently, HUD collects performance data for “Governmental Entities” as a group, but is unable to examine the granular performance metrics on an individual basis. As a result, HUD is not able to scrutinize the performance of FHA-insured mortgages with down payment assistance from any specific individual governmental entity.

 

Thankfully, this committee has the opportunity to bring much needed transparency to HUD’s data collection to ensure a sustainable future in DPA. Currently, HUD requires mortgagees to obtain tax identification numbers for non-profit down payment assistance providers but does not require the same information to be collected if the provider is a Governmental Entity. To ensure uniformity in available data, HUD should require that mortgagees obtain and provide to HUD the tax identification number of a Governmental Entity when it provides down payment assistance in the form of a gift or a second mortgage.

 

NTU is a strong believer in the premise that policymakers make better decisions when they consider all data and facts. Incorporating legislative text that allows HUD to include more predictive data will enable HUD to track existing loan performance and make more informed rules in the future. Using that data, they should move forward using a targeted, evidence-based approach to sound housing regulations that will better serve taxpayers over the long run.

 

We have dedicated decades of our work in Washington to fighting for a housing system that is sustainable and protects taxpayers. We hope you will include language that modernizes HUD’s data collection and creates a fairer, more level playing field. 

 

Sincerely, 

 

Thomas Aiello

Policy and Government Affairs Associate

 

Cc: Members of Senate Committee on Appropriations