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AFFH Suspended by HUD to Give Cities…and HUD Extra Time to Learn Program.

Blog Title:

AFFH Suspended by HUD to Give Cities…and HUD Extra Time to Learn Program.

Author: Sam Knight

Suspension of the AFFH (Affirmatively Furthering Fair Housing) rule sounds wicked on the surface of it, from some perspectives, but nothing is simple. This month, HUD announced that it was suspending the AFFH (Affirmatively Furthering Fair Housing) rule until 2020. The AFFH rule was implemented in 2015 with the express purpose of measuring and addressing compliance with the Fair Housing Act (FHA), closing a loophole open since 1968.

The FHA law, the source of the popular FHA home loans for disadvantaged borrowers, is still in place. FHA loan programs are relaxed enough that many see it as the bad credit mortgage option, and FHA purchase loans continue to make homeownership possible for many Americans who would otherwise have to wait. That said, many are disappointed over the suspension of AFFH rule, with its guidelines and reporting requirements. The suspension has been described by HUD as an attempt to help communities who are struggling to comply with the AFFH rule and its AFH (Assessment of Fair Housing) requirements.

In the notice recently released by HUD, the decision to suspend until October 31, 2020 was made after review of the initial 49 AFH reviews. Out of those first 49 reviews, 35 AFH submissions were initially “non-accepted”; in 2017. With a 71% non-acceptance rate, HUD determined program participants need more time and technical assistance to adapt to the new AFFH process and required AFH submissions. The participating communities are not the only ones struggling with the new program requirements; HUD’s review process was incredibly heavy in man hours and needed to be streamlined. The extra time will allow HUD to work with plan participants to teach the process and will allow HUD to fix its own handling of the submissions required by the plan.

The carrot dangled in front of communities for AFFH compliance adds up to billions of dollars in federal aid. Until all the parties are up to speed, it is unclear how the Grants will be handled. Not only are the communities unable to realize the funds the program promised to deliver in 2018, but homebuyers who would have benefitted from those programs will face a delay of two years.

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See a copy of the HUD AFFH suspension notice here.

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