The House Financial Services Subcommittee on Housing and Insurance held a hearing on May 16, “Sustainable Housing Finance: The Government’s Role in Multifamily and Health Care Facilities Mortgage Insurance and Reverse Mortgages.” A large portion of the hearing focused HUD’s plan to consolidate its Multifamily Housing field offices (see Memo, 4/26). Representative Keith Ellison (D-MN) said the HUD Multifamily office in Minneapolis is a model office and a great example of proactive portfolio management. Other Members, including Representative Brad Sherman (D-CA), also expressed concerns about how regional needs would be met once the consolidation is implemented.The rising demand for rental housing and the Federal Housing Administration’s (FHA’s) role in the financing of affordable rental housing during the recession were discussed. Witness Marie Head, Deputy Assistant Secretary for Multi-Family Housing at the FHA, said in her testimony “Demand for new FHA insurance for new construction and refinancing of multifamily properties increased more than six-fold from 2008 to 2012.” Ms. Head later added, “A significant share of the demand for FHA insurance reflects the larger demand for rental housing, particularly in many metropolitan areas which face an inadequate supply of multifamily housing.”Mr. Ellison said that he is very concerned about affordable housing in general and noted that only a quarter of households that need federal housing assistance actually receive it. Mr. Ellison asked Ms. Head whether she viewed the shortage of affordable housing for low income Americans as a crisis. She responded that there is a huge demand for affordable housing, and that HUD is taking steps to try to address the need.Mr. Sherman asked Ms. Head about the role HUD and FHA played in ensuring the financing and development of multifamily housing during the recession. Ms. Head responded that HUD Multifamily Housing contributed a substantial amount to the building of housing that would otherwise have not been completed due to a lack of private financing options. The Senate Committee on Banking, Housing, and Urban Affairs held a hearing on May 14, “Returning Private Capital to Mortgage Markets: A Fundamental for Housing Finance Reform.” The hearing was part of ongoing efforts by the Committee to explore options for housing finance reform. While the Committee has held many hearings on this issue in 112th and 113th Congresses, with the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac now making record profits without congressional intervention, some observers think the view that the likelihood of GSE reform is quickly diminishing.Senator Jack Reed (D-RI) asked witness Phillip Swagel of the University of Maryland School of Public Policy whether Mr. Swagel recommends a privatized housing finance system. Mr. Swagel responded that reform of the GSEs must happen, and expressed concern that if Congress waits for a perfect reform proposal to emerge, reform will never happen. Mr. Swagel said that the uncertainty of the GSEs being in a continued state of conservatorship could exacerbate the existing and ongoing “brain drain” of staff from the GSEs. Senator Reed later said the affordable housing goals of the GSEs could be achieved through another mechanism such as “an affordable housing trust fund.” A third housing finance reform hearing was scheduled to be held by the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises on May 15. The hearing was postponed and has not been rescheduled to date.View all witness testimony from and an archived webcast of the May 16 hearing at: http://1.usa.gov/110dusb View all witness testimony from and an archived webcast of the May 14 hearing at: http://1.usa.gov/14ifWOY