Fannie Mae Improves and Extends its "Expanded Housing Choice" Voucher Initiative Nationwide

 

Fannie Mae (FNMA/OTCQB) has announced improvements to its Expanded Housing Choice (EHC) initiative that: (1) make it available nationwide - including states with no source of income protections - for new loans to multifamily property owners who accept U.S. Department of Housing and Urban Development (HUD) Housing Choice Vouchers (HCVs); (2) increase eligibility thresholds to stimulate a more sustainable program; (3) streamline its data collection process; and (4) make its more transparent regarding inclusive renter screening requirements.  It was previously limited to eligible properties in North Carolina and Texas. These changes will support a more equitable housing market.

The Housing Choice Voucher federal program helps very-low-income families, senior citizens, and people with disabilities afford stable, quality housing in the private market. Fannie Mae’s Expanded Housing Choice initiative, begun in 2022 and extended through April 2026, is a pilot initiative to expand housing opportunities for HCV holders by incentivizing multifamily borrowers to accept vouchers as a valid source of income. Approximately 30% of voucher holders are unable to find housing that accepts their vouchers.

Multifamily property owners are now eligible if their property is not already legally required to accept HCVs and that at least 40% of units are affordable at or below HUD Fair Market Rents or Small Area Fair Market Rents. Borrowers and property managers who leverage EHC and accept HCVs can benefit from lower pricing, flexible loan terms, certain completion, lower turnover and vacancy rates, and a steady stream of competitive rent payments backed by HUD.  Fannie Mae's Delegated Underwriting and Servicing (DUS®) lenders partnered with it in the initiative.

For more information on Fannie Mae’s Expanded Housing Choice initiative, including background on the Housing Choice Voucher program, lender and borrower best practices, frequently asked questions, and more resources, go to FannieMae.com.

Read the October 15, 2024 Fannie Mae press release.

Health Equity Research Finds Housing Vouchers Improve Physical Health

An academic study published in Health Affairs (vol. 43, no. 2) has found that federal housing vouchers for low-income families alleviate family stress and nurture child development, thus confirming this intuitive connection with statistical support. The study - entitled "Experimental Evidence Shows That Housing Vouchers Provided Measurable Benefits, Including Parent Stress Reduction" - found that individuals in families who received a voucher "were 50% less likely to have high blood pressure, 90% less likely to report home heating issues, 80% less likely to miss a rent payment, and 40% less likely to lack sufficient living space. They were also five times less likely to feel unsafe in their neighborhood." The study utilized the Housing and Children’s Healthy Development study, the only randomized controlled trial of housing vouchers (conducted in the Cleveland, Ohio, and Dallas, Texas, metropolitan areas).

The U.S. Department of Housing and Urban Development (HUD) allocates around 60% of its annual budget ($30 billion) to the Housing Choice Voucher program (HCV). This program serves around 1.3 million families, including over 2.2 million children each year. Only one-quarter of eligible households actually receive assistance, with around 3.9 million eligible families, including more than 6.6 million children, not receiving the vouchers they qualify for. Thus. four times as many Americans, including many children, are entitled to this support but do not get it because it is difficult to get a housing voucher because of high demand and long waiting lists stemming from program underfunding. Multiple eligibility criteria, bureaucratic procedures, and unequal distribution further complicate access to the HCV program. 

The shortage of housing vouchers deeply impacts low-income and marginalized communities by exacerbating “weathering,” a recent concept in public health research that compares the human body to a structure exposed to harsh environmental conditions over time. The absence of stable housing means that individuals have relentless stress, worsened socio-economic hardships, and the development of serious health problems such as hypertension and diabetes. This chronic stress response - known as “allostatic load" - hastens an individual's health decline. To combat these disparities, the study advocates incorporating housing solutions into community development in order to foster resilience and equitable outcomes. Tackling housing instability is key to lessening the damaging health effects.

All relevant research in this area has emphasized the importance of stable housing for mental health, social engagement, community involvement, and overall well-being. It has been found that unstable housing leads to higher risks of eviction and financial instability while stable housing results in better health and educational outcomes, especially for children. Those households spending a large portion of their income on rent report worse health and often delay medical care, which negatively affecting caregiver health and maternal mental well-being, while increasing child hospitalization rates. Children in rent-burdened households also have lower health ratings and are less likely to stay in school.

Read the June 24, 2024 NCRC article.

Read the February 2024 Health Affairs research article.