Question 10
The Joint Statement did not include a reference to affordable housing. Will examiners consider bank activities that help to maintain affordable housing for low- or moderate-income individuals, including homeowners or renters, as responsive to community needs during the COVID-19 emergency?
Response 10
Yes. Community development under CRA includes activities that promote affordable housing, including single-family and multifamily rental housing, for low- or moderate-income individuals or families. Activities that promote housing stability for low- or moderate-income renters who are experiencing financial hardship due to COVID-19 are considered particularly responsive to the unique challenges presented by the COVID- 19 emergency. These activities include loan forbearance, reduced payments, loan modifications, or restructuring debt for residential rental property owners who in turn agree to offer rent relief to and suspend evictions for low- or moderate-income renters.(5) In addition, investments in or grants to intermediary organizations that provide housing support for low- or moderate-income individuals are considered responsive to community needs.
Additionally, as the Joint Statement indicates, activities that promote stability for low- or moderate-income homeowners who are experiencing financial hardship due to COVID-19 are also considered particularly responsive to the unique challenges presented by the COVID-19 emergency. These activities include loan forbearance or loan modifications for low- or moderate-income homeowners. These activities will receive favorable consideration when retail lending is evaluated.(6)
All activities must be undertaken in a manner consistent with safe and sound banking practices and applicable consumer protection laws.
(5) Suspension of evictions for tenants would cover instances involving non-payment of rent related to financial hardship caused by the COVID-19 emergency and instances involving evictions already in process prior to the emergency.
(6) An intermediate small bank that is not a Home Mortgage Disclosure Act reporter would have the option to submit for consideration home mortgage loans with a primary purpose of providing affordable housing for low- or moderate-income individuals as a community development activity.
Originally published in the “Community Reinvestment Act (CRA) Consideration for Activities in Response to the Coronavirus Pandemic Frequently Asked Questions (FAQs)” on May 27, 2020 and updated on March 8, 2021 by the Board of Govenors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency.