Policy News

  • 16 Apr 2019 5:30 PM | Deleted user

    Today, the Senate passed HB 1495, sending the bill to conference committee where legislators will negotiate bill changes between Senate- and the House-passed versions.  As this article in the Indiana Lawyer describes, this billImage may contain: 5 people, people smiling, people standing aims to provide greater transparency and modest guardrails to land contracts for homeownership.  While not new, these contracts have exploded in number, particularly in Indiana where communities were hit hard by the foreclosure crisis.

    Communities with thousands of vacant homes circulating on tax sales have been purchased as investment properties, but many have also been purchased by speculators, acquiring numerous homes with low values and severe habitability issues to sell to aspiring homeowners on contract at inflated prices.  In these transactions, borrowers enter into agreements with sellers who transfer the title at the end of the mortgage, rather than the beginning as you would in traditional mortgages.

    While this can be a viable alternative homeownership model, without any clarity in state law in how to treat them, we have unfortunately seen large scale sellers churning borrowers in and out of properties who lose all of Image may contain: 4 people, people sitting, shoes, table and indoortheir investments along the way. Regularly, these borrowers invest thousands in repairs only to be evicted when they are underwater, unable to keep up with repairs, balloon payments, fees, etc. and they lose all of their equity invested in these properties.

    That is because land contracts shift all the burdens and obligations of homeownership to the buyers with none of the rights or protections of homeownership. This transaction has fallen into a no man’s land of policy, with court opinions differing on whether or not it’s a rental contract which would have some habitability standards or a true lending contract.

    HB 1495 does not in any way attempt to prevent people from offering or signing these homeownership arrangements, only to provide needed clarity for all parties. In recognition that some individuals offer these contracts informally and not as their primary business, the provisions only apply to those who are regularly engaged in the business of selling land contracts and have four or more outstanding land contracts at a given time.

    It does not require a standardized contract, but instead would have the Attorney General publish the necessary contract components or the contract can be considered voidable. 

    Disclosures required: 

    This bill would require disclosure of basic information about the property and loan terms, such as the annual percentage rate of the contract, existing liens on the property, whether or not seller or buyer will be paying real estate taxes, for instance that provide clarity for the borrower and the seller.


    Rather than calling for a full inspection that would be required for a traditional mortgage, the bill would have these contracts include an appraisal within the previous year to allow borrowers to know some critical information about the property without the full inspection process.


    Since this bill does not provide for an extensive inspection process, there will be a three-day cooling off period where the buyer or the seller may deliver to the other party a written notice of cancellation to account for misrepresentation of the property

    The legislation is authored by Representative Vanessa Summers, co-authored by Representatives Clere, Fleming, Woody Burton and sponsored by Senators Bohacek, J.D. Ford, and Breaux.

    Stay tuned to this blog for updates on bill negotiations and advocacy steps you can take in support of this measure!

    For more information, contact Kathleen Lara, at klara@prosperityindiana.org.

  • 15 Apr 2019 7:00 PM | Deleted user

    Thank you so very much for speaking up in support of Hoosier consumers and communities! Your voices were heard and SB 613 has died.

    Due in large part to your outreach, testimony, meetings, calls and emails, lawmakers stood with a broad coalition of veterans, faith leaders, community and social service organizations by choosing not to call SB 613 to the floor on the third reading deadline, killing the bill. 

    Please join us in thanking legislators who opposed this measure throughout session. We look forward to working with lawmakers to discuss reforms to high-cost loan products that exploit Hoosiers facing housing and financial hardship, as well as ways to foster sustainable alternatives.

    As a reminder, SB 613:

    • Would have kept the current payday loan product and allowed the same lenders to make 6-9 month installment loans of up to $1500 to even lower-income borrowers at 167% APR, taking access to bank accounts directly to collect monthly payments. 
    • Would have authorized a brand a new “Chapter 8” product at 72% interest plus the pre-paid finance charge, for $3000 up to 36 months with no limits on how many times the loan could be renewed or how many loans someone can have, a model we have seen is problematic in other states.
    • And it would have increased costs across the board for conventional loans, like car loans, by increasing the max interest rate from 25% to 36% for loans of ANY SIZE and doubling the pre-paid finance charge allowed (from $50 to $100).
  • 21 Mar 2019 10:21 AM | Deleted user

    A recent report update from the National Low Income Housing Coalition illustrates the critical need for affordable housing in Indiana. NLIHC researchers found that there is a 134,485-unit shortage of affordable, available rental housing for the 212,377 extremely low-income (ELI) renter Hoosier households. Households that are severely cost=burdened and are spending more than half of their income on housing are bearing the brunt of this crisis, and are more likely than other renters to forgo healthy foods and healthcare in an effort to pay for rent.

    Additionally, they are more likely to experience evictions. Indiana currently has one of the highest eviction rates in the nation. To view the entire Indiana state profile, click here.

  • 14 Mar 2019 7:03 PM | Deleted user

    On March 13, U.S. Senator Elizabeth Warren (D-Massachusetts) reintroduced the American Housing and Economic Mobility Act. This comprehensive legislation aims to address our nation's affordable housing crisis by producing more than 3 million new housing units, a 10 percent rent reduction, and the generation of 1.5 million new jobs. It also aims to promote home ownership and reverse discriminatory housing policies such as redlining and restrictive zoning.

    In addition to the aforementioned goals, the American Housing and Economic Mobility Act aims to protect low-income seniors, people with disabilities, families with children, and persons without housing by:

    • Creating a new $10 billion grant program that enables communities to build infrastructure, parks, roads, or schools if they reform land use rules that make new affordable housing projects needlessly expensive;
    • Providing down payment grants to first-time homebuyers living in low-income, formerly redlined, or officially segregated areas in an effort to close the racial wealth gap;
    • Strengthening the Community Reinvestment Act (CRA) to cover more financial institutions (excludes credit unions in the re-introduced bill) in an effort to promote investment activities in poor-and-middle-class communities;
    • Supporting families whose wealth sustained substantial damage due to the 2008 financial crisis and still have negative equity on their mortgages;
    • And making it easier to use housing vouchers in areas with good schools and jobs for residents.

    To learn more about the American Housing Economic Mobility Act, click on the following links to read letters of support discussing the potential impact of the bill on families and communities: 

    • Read Letter of Support from the U.S. Conference of Mayors
    • Read Letter of Support from Massachusetts Mayors
    • Read Letter of Support from Civil Rights Groups
    • Read Letter of Support from the National Rural Housing Coalition
    •  Read Letter of Support from Credit Union National Association
  • 11 Mar 2019 8:30 PM | Deleted user

    President Trump released his 2020 budget request today and unfortunately, as in his FY18 and FY19 requests, the proposal again calls for dramatic cuts to housing programs that aid low-income households. Those cuts disproportionately affect seniors, those with disabilities, families with children, and veterans.

    Overall, the administration proposes to cut HUD by an astounding $9.6 billion or 18% below 2019 enacted levels, imposing deep cuts to affordable housing and community development programs. In addition to the cuts, the proposal revisits policy suggestions previously proposed by Secretary Carson to implement rental increases on the lowest-income households and work requirements that have not been shown to increase family or self-sufficiency.

    The budget also incorporates draft legislation, known as the “Making Affordable Housing Work Act,” proposed by the administration last year that would increase rents on most non-elderly, non-disabled families receiving HUD assistance by requiring that they pay 35% of their gross incomes, compared to 30% of their adjusted incomes. Due to that calculation, the very poorest elderly and disabled families would also see their rents triple as it eliminates income deductions for medical or childcare expenses. The proposal allows housing providers to broadly impose work requirements, without any resources to help people gain the skills they need for livable wage jobs.

    Data shows 46 percent of Indiana renters are cost-burdened and 86 households experience evictions every day in our state. This is not the time for draconian cuts that will undermine essential housing and community development programs like the national Housing Trust Fund, the HOME Investments Partnership program, and public housing capital repairs. We are actively communicating with our Indiana Congressional Delegation, urging them to not only reject this proposal’s cuts, but significantly expand the investments in affordable homes that Hoosier families and communities need to prosper.

    See the table below for specifics on the proposed budget:


    USDA Rural Housing

    Community Development Block Grants/HOME: The budget proposes eliminating the Community Development Block Grant (CDBG) program and the HOME Investment Partnerships program entirely. The bill also would eliminate Choice Neighborhoods grants, the Section 4 Capacity Building program, and the Self-Help Homeownership Opportunity Program.

    Multifamily Preservation and Revitalization demonstration, Section 502 Direct Homeownership Loans, Section 514/516 Farm Worker Housing Loans and Grants, Section 523 Mutual and Self-Help Housing, and Section 504 Rural Housing Assistance grants: The proposal aims to eliminate most rural housing grants and direct-loan programs at the U.S. Department of Agriculture (USDA), eliminating funding for the Multifamily Preservation and Revitalization demonstration, Section 502 Direct Homeownership Loans, Section 514/516 Farm Worker Housing Loans and Grants, Section 523 Mutual and Self-Help Housing, and Section 504 Rural Housing Assistance grants and loans

    National Housing Trust Fund: The budget proposes eliminating the national Housing Trust Fund (HTF), the first new housing resource in a generation exclusively targeted to help build and preserve housing affordable to people with the lowest incomes, including those experiencing homelessness.

    Section 521: Essentially, the only funding for housing under USDA that remains in the proposal is the Section 521 Rural Rental Assistance, which would be funded at $1.407 billion and the guaranteed loan programs that use fees to offset any federal costs and do not tend to serve the lowest-income households

    Tenant-Based Rental Assistance: The proposal would cut funding for tenant-based rental assistance (TBRA) as his request for $22.244 is not sufficient to renew contract obligations, which would result in the loss of thousands of vouchers.


    Project-Based Rental Housing: While the proposal offers a $274 million increase from FY19, this is also not sufficient to renew all existing project-based rental assistance (PBRA) contracts


    Public Housing: The Public Housing Capital Fund takes a huge hit under this plan as it would eliminate this funding altogether (previously funded at $2.775 billion in FY19) and nearly cuts in half the the Operating Fund from $4.65 billion in FY19 to $2.86 billion, or 38%. Instead, the Administration's proposal requests $100 million for the Rental Assistance Demonstration (RAD) to convert more public housing into housing vouchers and PBRA.


    Homelessness: The proposal calls for $34 million in cuts to the HUD Homeless Assistance Grants.


    Fair Housing: The budget would cut the Fair Housing Initiatives Program (FHIP) by $3 million.


    Homelessness: The proposal calls for $34 million in cuts to the HUD Homeless Assistance Grants.

    Fair Housing: The budget would cut the Fair Housing Initiatives Program (FHIP) by $3 million.


    202: The budget cuts $34 million from the Section 202 Housing for the Elderly program


    811: the proposal cuts $27 million from the Section 811 Housing for People with Disabilities


    HOPWA: The proposal would cut $63 million in funding for the Housing Opportunities for People with AIDS (HOPWA) program


  • 11 Mar 2019 7:21 PM | Deleted user

    On March 11, Prosperity Indiana and the Indiana Assets & Opportunity Network were joined by dozens of military and veterans’ groups, faith-based organizations and churches, social service providers, community organizations, concerned citizens, and more at the Statehouse for a Reject Senate Bill 613 press conference. 

    Advocates stood in unity to discuss the devastating consequences SB 613 would have for consumers and communities. They implored House leaders to reject this piece of harmful legislation. If passed, SB 613 would rewrite the definition of criminal loansharking and open the door for high-cost lending in Indiana by permitting larger, longer-term loan products outside of the current 72 percent cap. It would also increase the allowable cost on various consumer loans, including auto and installment loans.

    Prosperity Indiana and its members were represented by Mark Lindenlaub, Executive Director of Thrive Alliance in Columbus. He voiced concern regarding the increased workload social service agencies would encounter from families seeking relief from predatory loans should SB 613 pass, stating that, “adding larger, longer-term and higher-rate loans to vulnerable families will only make their lives, and our work, more difficult.”

    Iraq War veteran Steven Bramer, Jr., a former payday borrower, shared his experience of getting caught in the vicious payday lending cycle. “I got myself in a horribly expensive cycle,” he shared before adding, “I protected you at one point. Now, it’s time for you to protect me.”

    Click here to view a recorded live stream of the press conference and please contact your House Representative to urge him/her to oppose this bill!

  • 25 Jan 2019 10:23 PM | Deleted user


    JANUARY 23, 2019

    Thank you Chairman Burton and Members of the Committee. My name is Kathleen Lara and I serve as the Policy Director for Prosperity Indiana.

    Our member network of nearly 200 organizations is working in every region of the state to ensure all Hoosiers can enjoy equal economic and social opportunities and live in thriving communities. Our members are working hard to address the deficit of affordable housing and homeownership opportunities, particularly for low-income households. They are focused on empowering individuals and families to build assets so they can climb the economic ladder.

    That is why I stand here today to offer our strong support for this bill, HB 1495, a bill that takes on a pervasive practice undercutting those goals and affecting consumers and communities of all sizes and geographies — the lack of strong state policy regarding land contracts for homeownership.

    As you have heard, in states that were hardest hit by the foreclosure crisis, particularly those in the Midwest, thousands of homes became vacant and prime investment opportunities for buyers. Significant portions of this housing stock, however, were blighted, abandoned properties with low appraisals and often severe habitability issues.

    Subsequently, we started to see an explosion in the number land contract agreements for these homes where would-be homeowners enter into alternative purchase agreements with companies and the title is transferred at the end of the mortgage, rather than the beginning as you would see with traditional mortgages.

    Land contracts are not inherently problematic when interests are aligned. In fact, they have been a viable alternative homeownership model utilized by many non-profits, faith-based organizations, home builders with excess supply, and average Hoosiers selling homes to neighbors, family or friends.

    The problem lies in the increasingly common predatory model we have seen where interests are not aligned. In this model, sellers regularly churn would-be owners in and out of properties. These borrowers invest thousands in repairs to the homes only to be evicted when the borrower is inevitably unable to keep up with habitability repairs required for code compliance in addition to loan costs and loses all of their equity.

    We have seen these land contracts used to exploit a loophole in state code, subverting state landlord-tenant habitability obligations as well as protections afforded to borrowers with traditional mortgages. In short, the seller makes more when the borrower fails.

    In HB 1495, we do not aim to prevent anyone from entering into a land contract for homeownership. We do, however, aim to empower consumers by putting into place protections that increase the transparency of these products for borrowers. These are basic disclosures that are far less extensive than what would be required for a traditional mortgage, but provide enough information to help borrowers understand the basic habitability of a property and more clarity regarding the terms of the contract.

    We want to foster affordable avenues to housing stability and homeownership, but ones that allow borrowers to be informed and empowered. I want to express our sincere appreciation to Representatives Summers, Clere and Fleming for taking on this important issue. I urge the members of this committee to support HB 1495 and enact common sense protections for Hoosiers.

  • 15 Jan 2019 11:36 PM | Deleted user

    With work at the Statehouse well underway early in this long budget session, Prosperity Indiana is working to advance key member priorities, as outlined in our in our 2019 State Policy Priorities.

    Our network is pushing for ambitious agenda and we hope our members will register to attend our Statehouse Day on Tuesday, January 29, as we urge their lawmakers to take action on critical community development legislation. Prosperity Indiana will set up all legislator meetings for members and provide you with key talking points to make the process as simple as possible.

    Please review the key bills and updates highlighted below to help us move these priorities forward!




    We anticipate this bill will be heard in the Senate Insurance and Financial Institutions Committee next Wednesday, January 23, so please help us stop the debt trap in the Hoosier State by signing on in support of the measure. Click here to sign our letter.

    Tracker Lists

    We are still combing through final bill lists that are still updating as I type to review measures we will advocate for or against on behalf of our members in this legislative session. Stay posted to our policy blog as we will post our bill tracker lists and details by the end of the week!

  • 15 Jan 2019 7:16 PM | Deleted user

    As the longest government shutdown in U.S. history continues, more than 1,500 units of federally assisted housing supporting low-income seniors, people with disabilities, and families with children throughout Indiana are in jeopardy. As outlined in the chart below, Prosperity Indiana has noted the 1,578 units of Project-Based Rental Assistance (PBRA) contracts that expired in December or stand to expire this month or next as the Department of Housing and Urban Development (HUD) is unable to renew them and is scrambling to fund rental assistance in the short-term without an end in sight to the federal shutdown.

    How did we get here?

    National advocates had previously received word from HUD that the agency had the budget authority to renew PBRA contracts through January. As a Jan. 6 Washington Post article revealed, however, that was not the case. The article quotes HUD spokesman Jerome Brown as saying that “[HUD] budget and contract staff are ‘scouring for money’ to figure out how to fund the contracts on an interim basis.” The piece outlined how 1,500 landlords received letters from the agency on January 4 in order to try and prevent the eviction of tenants after certain HUD officials had allegedly not realized had expired on Jan. 1. Those letters apparently outlined what activities will take place during the first 30 business days of the shutdown and how to prevent the eviction of thousands of tenants who live in homes covered by the Section 8 Project-Based Rental Assistance program or Section 202 (for the elderly) and Section 811 (for people with disabilities) programs.

    According to the National Housing Trust, HUD shared that 1,150 contracts were not renewed in December affecting approximately 70,000-85,000 low-income households. Additionally, HUD has indicated that will be unable to renew 500 contracts that expire in January, affecting another 30,000-40,000 low-income households.  While HUD has expressed it is working within currently obligated funds at its disposal to cover most rental assistance payments, but if the shutdown continues, 550 more contracts are set to expire in February without HUD in a position to renew these contracts or obligate funds. HUD has indicated that Section 202 owners are expected to rely on their reserves, but advocates have concerns that budget reserves are not sufficient to meet the rental payments. HUD has also stated it plans to use funds carried over from prior years to fund these contracts for December and January, but beyond that, the agency may have to figure out a way to fund these contracts on a short-term basis.

    In rural housing, the USDA shutdown plan indicates that direct loan programs will not issue any additional funds, including Section 504, 514, and 502.  Further, the guidance noted that banks are unlikely to close on these loans until the government shutdown ends, delaying homeownership. At present, it is not clear if USDA will continue paying rental assistance or vouchers for low- and very low-income tenants.

    Click here for the NLIHC breakdown of the shutdown’s impact on major housing programs.

    Congressional Call to Action

    Prosperity Indiana is urging Congress to pass clean FY19 Transportation Housing and Urban Development and U.S. Department of Agriculture budgets so that thousands of extremely low-income families, seniors and the disabled are not denied critically needed housing assistance. Short-term renewals are destabilizing for private owners of PBRA properties. They limit the owners’ ability to supportive services to their tenants, delay property rehabilitation, and could potentially increase rent burdens on fixed-income populations. The average income of a household receiving PBRA is less than $12,000 and 56 percent of these households have someone who is elderly or someone with a disability, so they can certainly not afford to shoulder this burden imposed by the shutdown. 

    Guidance for Owners

    HUD has shared that owners experiencing delays in payments can request access to replacement reserves, but should not do so without approval. Those requests should be directed to the Director of the Multifamily Hub or Satellite office, all of whom should be working as essential employees.

  • 18 Dec 2018 8:55 PM | Deleted user

    If Congress fails to pass additional funding measures by December 21, the federal government will be forced to shut down. As we have discussed in earlier blogs, Congress has failed to pass numerous full-year funding bills for FY19 (including those for Transportation-HUD and USDA) and those programs have been operating under short-term stopgap measures (continuing resolutions, or CRs). The current CR expires in mere days and current negotiations are mired in border security funding debates.

    Some speculation has begun to filter out that lawmakers are considering many approaches to address the impasse. The most promising for our member interests is a proposal to have Congress pass most of the remaining bills for the spending year and extend the CR for the controversial Homeland Security bill. Another option, that seems like a very approach at this point would be to pass another short-term measure to keep the federal government open into the new year. One last approach that has been floated is passing a year-long CR through September 30, 2019, for all the outstanding spending bills.

    That approach would be a significant setback. For FY19, HUD needs approximately $1.3 billion and USDA needs at least $10 million more than FY18 appropriations to maintain current program levels and renew existing housing assistance contracts. FY19 THUD and USDA bills included funding increases to address urgent affordable housing and community development needs.

    Prosperity Indiana is urging our state's delegation to enact full FY19 spending bills for HUD and USDA. Join us in lifting your voice by calling your lawmakers today! To find your representative and their phone number, click here and enter your zip code in the "Find Officials" box!

    Thank you for your advocacy!

    For more information, visit our previous FY19 budget coverage here: https://www.prosperityindiana.org/Policy-News/6676998 and here: https://www.prosperityindiana.org/Policy-News/6574990

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