JANUARY REPORT – From the TAR Government Affairs Department

JANUARY REPORT – From the TAR Government Affairs Department

January Article, 2019 | January 25, 2019

Telluride Buys More Land for Affordable Housing

Telluride Town Council sealed the deal on an acquisition of land for the purpose of creating more employee and affordable housing in early December. Beginning in 2019, the town will begin making payments on the land over a five-year period in an agreement hammered out with the seller, Robert F. Burkhart. The selling price is $2.27 million for three lots on West Colorado and Tomboy avenues — the current location of a duplex known as the Tower House.

Spreading the payment out over time will avoid having to drain the town’s affordable housing resources. According to the staff memo to council, “(The acquisition) could be viewed as a short-term land banking opportunity. If the acquisition occurs, the recommendation would be to continue to utilize the duplex as a long-term rental and deposit associated revenue in the Affordable Housing Fund, until future redevelopment occurs. In the fiscal analysis considered by council, “Borrower cannot develop/redevelop, or pay off the outstanding balance, within the first three years (i.e. prior to Dec. 31, 2021). After three years, the Borrower upon seeking a construction loan can either pay off the remaining balance, the Seller can (at its option) agree to subordinate to a construction loan, or the Borrower can continue to make the scheduled payments until year five.”

The motion to approve the purchase passed 5-0. Council members Tom Watkinson and Todd Brown were recused from the negotiations leading up to and including the meeting in which the vote took place, as they live in proximity to the property.

And Away We Go! Colorado Legislative Session Off and Running

The First Regular Session of the 72nd Colorado General Assembly convened on Friday, January 4th and the session will continue through May. All the information you need about the General Assembly, and how it functions, can be found at their website, http://leg.colorado.gov/

This year, almost one third of the legislators will be brand new. There are 100 members of Colorado’s General Assembly – thirty-five Senators and sixty-five Representatives.

The Colorado Association of REALTORS® is already hard at work in this session protecting the interests of the real estate industry and participating in all discussions/debates that have real estate implications. This year, legislation regarding the state’s First Time Homebuyer Savings Plan, remote notaries, transfer taxes, affordable housing, taxation, tax credits and a myriad of other topics will be diligently reviewed by CAR and its Legislative Policy Committee (LPC).

The LPC is a committee made up of REALTORS® like you from around the state of Colorado who read the bills and suggest policy positions. Bills get filed at the legislature and referred to one of five subcommittees, where REALTORS® read every word of the bill and then discuss its merits. On Fridays, the LPC convenes as a whole committee, receives the subcommittee reports and takes positions on the bill. These positions give our lobbying team at the Capitol the direction they need to advocate on our behalf. The bottom line of this whole process is – positions are taken by REALTORS® for REALTORS® with REALTORS® having analyzed all of the legislation. If you wish to watch/listen to any of these LPC meetings or are interested in serving on the committee in the future, please contact Nick Bokone at nickbok22@gmail.com for more information.

What a Government Shutdown Means for REALTORS®

NAR published the following article on its website to categorize ways a government shutdown could affect/is affecting the real estate industry:

As of midnight on December 21, 2018, the President and Congress were unable to agree on the provisions of a Continuing Resolution (CR) to fund the federal government. As a result, a partial shutdown of some government operations has occurred. This partial shutdown includes some federal housing, mortgage, and other programs of interest to the real estate industry. A summary of the impact on selected agencies is provided below.

While this is a very politically dynamic event, NAR staff continue to monitor federal agencies and work with Congress, the Administration, and other groups to assess ongoing impacts to NAR members and their businesses.

Environmental Protection Agency

Under EPA’s shutdown plan (link is external), most employees are now furloughed. This will affect various regulatory programs and compliance activities, such as wetlands determinations under the 404 program and enforcement of the lead-based paint disclosure and renovation, repair and painting programs.

Topic: Environmental Issues

Topic: Lead-Based Paint

NAR Staff Contact: Russell Riggs, rriggs@realtors.org

Federal Housing Administration

HUD’s Contingency Plan states that FHA will endorse new loans in the Single-Family Mortgage Loan Program except for HECM loans. It will not make new commitments in the Multi-family Program during the shutdown. FHA will maintain operational activities including paying claims and collecting premiums. FHA Contractors managing the REO/HUD Homes portfolio can continue to operate. Some delays with FHA processing may occur due to short staffing. Read more about these delays (link is external).

Topic: FHA Programs

Topic: Multifamily Housing Development & Insurance

NAR Staff Contact: Sehar Siddiqi, ssiddiqi@realtors.org

Government Sponsored Enterprises (GSEs)

During previous shutdowns, Fannie Mae and Freddie Mac have continued normal operations since they are not reliant on appropriated funds. On December 26th both GSEs updated or clarified their loan purchase requirements in case of a shutdown. Freddie Mac requires all borrowers to sign a 4506T request form prior to close, but the request does not have to be processed prior to close. Fannie Mae requires the same unless the borrower’s income can be verified though Fannie Mae’s proprietary Desktop Underwriter verification system in which case no 4506T is required.

Topic: Government Sponsored Enterprises

NAR Staff Contact: Ken Fears, kfears@realtors.org

Internal Revenue Service

The IRS will close and suspend the processing of all forms, including requests for tax return transcripts (Form 4506T). While FHA and VA do not require these transcripts, they are required by many lenders for many kinds of loans, including FHA and VA. Delays can be expected if the shutdown continues. Some loan originators may adopt revised policies during the shutdown, such as allowing for processing and closings with income verification to follow, as long as the borrower has signed a Form 4506T requesting IRS tax transcripts. On loans requiring a Form 4506T, see the GSE section above for additional details.

Topic: Taxes

Topic: FHA Programs

Topic: Veterans Affairs

NAR Staff Contact: Evan Liddiard, eliddiard@realtors.org

National Flood Insurance Program (NFIP)

After NFIP operations were initially suspended over questions raised by government attorneys, NAR worked with the White House and Congress to clarify that the government shutdown does not affect the sale or renewal of flood insurance policies or the payment of claims on existing policies. Disaster relief, airport screenings and other essential homeland security functions are unaffected. View the FEMA release (link is external) resuming the full and normal operations of the NFIP.

Topic: National Flood Insurance Program

NAR Staff Contact: Austin Perez, aperez@realtors.org

Rural Housing Programs

The U.S. Department of Agriculture will not issue new rural housing Direct Loans or Guaranteed Loans. Scheduled closings of Direct Loans will not occur. Scheduled closings of Guaranteed Loans without the guarantee previously issued will be closed at the lender’s own risk.

Topic: Rural Housing Programs

NAR Staff Contact: Sehar Siddiqi, ssiddiqi@realtors.org

Visa Programs – EB-5 and H-2B

Until the shutdown ends and the Regional Center EB-5 program extension is signed into law, the EB-5 Immigrant Investor Regional Center Program is suspended and no new I-526 petitions can be filed. Investors must continue to file timely responses to USCIS Requests for Evidence (RFE) and Notices of Intent to Deny (NOID). In addition, investors may continue to prepare and file I-829 petitions.

While the Department of Labor was funded for 2019, the Department of Homeland Security was not. Therefore, while the H-2B Temporary Worker Visa program is still operational for workers currently in the U.S., the DHS is unable to approve any new or returning workers under an H-2B visa.

Topic: Immigration Reform

NAR Staff Contact: Russell Riggs, rriggs@realtors.org

 *This monthly government affairs/public policy report is prepared for informational purposes for the members of the Telluride Association of REALTORS® (TAR). It is a snap shot of issues important to the real estate industry at the local, state, and national levels. Any position taken on local issues is done at the direction of the TAR Board of Directors and is done with considerable debate and discussion by TAR leadership. Positions taken by CAR or NAR on issues at the state and national level will be reflected in the article when applicable.

 

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