December 16, 2003 - From the December, 2003 issue

Zeeda Daniele Outlines Fannie Mae's Programs And Initiatives For Metro Los Angeles

Nationally, there are few organizations more proactively promoting home ownership than Fannie Mae. Fannie Mae has been particularly active in Los Angeles, sponsoring programs for consumers and promoting increased production. TPR is pleased to present this interview with Zeeda Daniele, Senior Deputy Director for Fannie Mae's Los Angeles Partnership Office, in which she discusses Fannie Mae's local initiatives, inclusionary zoning, and Los Angeles' Housing Trust Fund.

Zeeda, as we all know, Fannie Mae plays a vital role in facilitating homeownership nationwide. What are the significant programs and initiatives that the Los Angeles office is advancing?

There are a number of initiatives we are advancing right now. Foremost among them is a pilot program, the Los Angeles Senior Housing Preservation Program, that will provide counseling and refinancing options to seniors who have been the victim of predatory lending. This is a countywide joint project with ACORN and Century Housing.

We recognize is that it's just not good enough to give seniors a place where they can go and get help if they've been victimized. We also want to help them change the patterns of behavior that lead them down the path to predatory lending. The initiative will offer seniors the opportunity to participate in an 18-month program, where they would come in for financial check-ups every six months. Once they've graduated from the program and been able to meet the various criteria-including not having their debt increase over 10% of the amount at the time of budgeting-they will then receive a match of up to $1500 to start a "Housing Savings Plan." We want the seniors to realize, regardless of how little their income, they can save and get into the habit of doing preventative maintenance on their houses so that they don't have large repair bills down the line. We have found in a lot of the research that part of the reason that so many of these seniors are victimized is because there are deferred maintenance issues.

Much of our work in Los Angeles is aimed at helping nonprofit multifamily housing developers obtain financing. There aren't a lot of lenders out there that are going to do a multifamily project under $2 million, because it's basically just too small. But there are a select group of banks that may have an indirect Fannie Mae relationship, meaning that they do multifamily business rather than residential. We can connect these banks with the nonprofits, helping those nonprofits understand what it means to do business with Fannie Mae. We don't work directly with the consumer, we don't do the loans directly. We work through our lender partners-be it a DUF lender on the multifamily side, or be it one of our lenders like a Countrywide or Washington Mutual on the residential side-to help families gain access to those programs.

Really, the biggest process for us is getting the word out about our programs, making sure that families know how to use those programs and making sure that those with access to these programs know they exist.

How active Fannie Mae is in working with California's state and local lawmakers on the crafting of state and local housing policies?

We tend to be more engaged at a local level. For example, right now the city of Los Angeles is looking at an inclusionary zoning ordinance. We can help by providing them with information on inclusionary zoning programs that have been developed across the country so that they then can develop an effective, intelligent ordinance. We also give them an understanding of what our position has been on preservation issues, so that they know how to ensure that these loans are deliverable on a secondary market.

Another example involves the development of live-work units in downtown L.A. When you're talking about developing live-work units of housing, oftentimes there is a percentage of the overall household that can be set-aside for use as a business. We're working with the city on understanding what the right ratio is when you're developing residential so that it can have commercial or business use by the homeowner, without being completely commercial, so that the family can qualify for the lower interest rate housing mortgages.

We're also working with Councilwoman Wendy Greuel's office to create an employer assisted housing (EAH) program for small businesses. Oftentimes under employee assisted programs, the employer provides a benefit such as closing costs or time-off to encourage homeownership by their employees. Most small businesses can't do that, so we're hoping to create an EAH program that will act as the consortium for businesses in the Los Angeles County area. This would be a membership type program, whereby if an employer is a member, their employees have access to the type of benefits that heretofore only large businesses could afford to offer.

We carried two articles in last month's Planning Report on inclusionary zoning ordinances: one with L.A. City Councilman Eric Garcetti, and another with Jeff Lee of the Lee Group and Bill Witte of Related Cos. Each of them said such ordinances must be written intelligently. What are the elements that make inclusionary zoning intelligent?

One, you have to make sure there's a program that takes into consideration the needs of the city. It's a very fine line that you are going to have to walk with inclusionary zoning, because it's going to require a lot of tough positions. By that, I mean that there are going to be a lot of individuals, families and existing homeowners who are not going to see that as the right path. Unfortunately, Los Angeles has a huge housing crisis, which makes it vital to develop programs that optimize land use and make it flexible for builders to come and do these things that take into consideration the needs of current residents.

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We have to be able to understand that tough decisions are going to have to be made. The City Council, the mayor, developers, and residents have to understand that drafting and passing an effective inclusionary housing ordinance is going to be challenging. But, we've got to forge ahead to adopt meaningful policy that will address the city's significant housing challenges. Moreover, we have to be able to effectively implement the practice.

Let's segue to Mayor Hahn's housing priorities for his administration. How can the Mayor's Trust Fund best be utilized to increase housing production in the city?

The mayor and his housing team have been very accommodating and engaging with Fannie Mae on talking about utilizing the trust fund. The first priority for the Housing Trust Fund is to utilize it for the development of multifamily housing projects. The key to this is being able to identify those projects and get the funding out quickly.

Second, being able to leverage the local funds with state funds, and through nonprofit developers, will help expand the capacity of the fund. So if the capacity through the Housing Trust Fund for a nonprofit development would be 20 houses, maybe with the support of Fannie Mae we are looking at forty houses. While forty units of housing doesn't say a lot, if we are looking at 40 times 100 developments over a specified amount of time, that could mean a great deal to Los Angeles.

It's really about how quickly the funds can be delivered to those nonprofits. And, we also have to make sure that they're able to get through the entitlement process very quickly.

Zeeda, there's probably more money being spent on school facilities in Southern California than any other public need. Fannie Mae has become increasingly interested in the nexus between schools and housing, including funding New Schools-Better Neighborhoods to demonstrate the potential of collaboratively master planning joint-use schools. What more could be done, in your opinion, to better leverage our school building efforts in California with the building of more housing units and healthier neighborhoods. What leverage might Fannie Mae bring to this joint-use opportunity?

Fannie Mae's most important contribution to this nexus between schools and housing is on the financial side. Realistically, the best and the most often used financing alternative is to leverage funding opportunities through the nonprofits.

We're seeing a number of different things occurring across the country. One of the things is the issuance of bonds. We are one of the largest purchasers of housing related element bonds in the country. If, for example, a bond was created that would allow the city or cities to develop both schools and housing, Fannie Mae certainly could look at being the purchaser on that bond. Unknown to many people, we're not looking for a AAA or AA rated bond. We can work with those cities that are more fiscally challenged. In addition, because of eminent domain or other practices that might occur in order to build the school, Fannie Mae can help with a housing element plan.

When TPR returns a year from now to interview you, what successes will be heralded?

A year from now, I hope that the Senior Housing Preservation program is implemented, making strides towards educating seniors about predatory lending. We hope to have started to enroll businesses in the Employer Assisted Housing Program, allowing employees of small businesses to enjoy assistance in becoming homeowners. We are really just expanding our programs by educating more lenders about them and engaging more lenders to be participants in our programs.

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