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AFFORDABLE HOUSING IN WEST VIRGINIA: 

CHALLENGES IN THE EASTERN PANHANDLE 

FIELD HEARING 

BEFORE THE

SUBCOMMITTEE ON 

HOUSING AND COMMUNITY OPPORTUNITY 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

JULY 29, 2008 

Printed for the use of the Committee on Financial Services 

Serial No. 110–134 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

BARNEY FRANK, Massachusetts, Chairman 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

GWEN MOORE, Wisconsin, 

LINCOLN DAVIS, Tennessee 

PAUL W. HODES, New Hampshire 

KEITH ELLISON, Minnesota 

RON KLEIN, Florida 

TIM MAHONEY, Florida 

CHARLES A. WILSON, Ohio 

ED PERLMUTTER, Colorado 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

BILL FOSTER, Illinois 

ANDRE ́ CARSON, Indiana 

JACKIE SPEIER, California 

DON CAZAYOUX, Louisiana 

TRAVIS CHILDERS, Mississippi 

SPENCER BACHUS, Alabama 

DEBORAH PRYCE, Ohio 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

JIM GERLACH, Pennsylvania 

STEVAN PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

GEOFF DAVIS, Kentucky 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

ADAM PUTNAM, Florida 

MICHELE BACHMANN, Minnesota 

PETER J. ROSKAM, Illinois 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

DEAN HELLER, Nevada 

JEANNE M. ROSLANOWICK, Staff Director and Chief Counsel 

(III) 

SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY

MAXINE WATERS, California, Chairwoman 

NYDIA M. VELA ́ ZQUEZ, New York 

STEPHEN F. LYNCH, Massachusetts 

EMANUEL CLEAVER, Missouri 

AL GREEN, Texas 

WM. LACY CLAY, Missouri 

CAROLYN B. MALONEY, New York 

GWEN MOORE, Wisconsin, 

KEITH ELLISON, Minnesota 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

MICHAEL E. CAPUANO, Massachusetts 

CHARLES A. WILSON, Ohio 

DON CAZAYOUX, Louisiana 

SHELLEY MOORE CAPITO, West Virginia 

STEVAN PEARCE, New Mexico 

PETER T. KING, New York 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

GEOFF DAVIS, Kentucky 

JOHN CAMPBELL, California 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

(V) 

C O N T E N T S 

Page 

Hearing held on: 

July 29, 2008 ..................................................................................................... 1 

Appendix: 

July 29, 2008 ..................................................................................................... 29 

WITNESSES 

TUESDAY, JULY 29, 2008 

Bernardi, Hon. Roy A., Deputy Secretary, U.S. Department of Housing and 

Urban Development ............................................................................................. 5 

Davis, Hon. Russell T., Administrator for Housing and Community Facilities 

Program, Rural Development, U.S. Department of Agriculture ...................... 7 

Dodson, Catherine, Executive Director, Martinsburg Housing Authority .......... 15 

Grove, Edward, Pastor, Trinity United Methodist Church; and member, Men 

of Valor and Vision .............................................................................................. 22 

Karos, Hon. George, Mayor, City of Martinsburg, West Virginia ....................... 13 

Rathbun, David, Senior Director, Single-Family Programs, West Virginia 

Housing Development Fund ................................................................................ 18 

Ross, David, Men of Valor and Vision ................................................................... 16 

APPENDIX 

Prepared statements: 

Bernardi, Hon. Roy A. ...................................................................................... 30 

Davis, Hon. Russell T. ...................................................................................... 32 

Dodson, Catherine ............................................................................................ 37 

Karos, Hon. George .......................................................................................... 39 

Ross, David ....................................................................................................... 42 

(1) 

AFFORDABLE HOUSING IN WEST VIRGINIA: 

CHALLENGES IN THE EASTERN PANHANDLE 

Tuesday, July 29, 2008 

U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON HOUSING AND

COMMUNITY OPPORTUNITY, COMMITTEE ON FINANCIAL SERVICES, Washington, D.C. 

The subcommittee met, pursuant to notice, at 11:24 a.m., at the 

Berkeley County Commission, suite 201, 400 West Stephen Street, 

Martinsburg, West Virginia, Hon. Maxine Waters [chairwoman of 

the subcommittee] presiding. 

Members present: Representatives Waters and Capito. 

Chairwoman WATERS. This hearing of the Subcommittee on 

Housing and Community Opportunity will come to order. 

Good morning, ladies and gentlemen. What a wonderful turnout. 

Thank you so much for your presence this morning. 

I would like to start by thanking the Berkeley County Commission for allowing us to use this space for today’s hearing on ‘‘Affordable Housing in West Virginia: Challenges in the Eastern Panhandle.’’ 

Now I am going to stop for a moment because we have with us, 

as you can all see, Commission President Steven Teufel, and he 

would like to say a few words of welcome. 

Mr. TEUFEL. Good morning, everyone. I am pleased to have the 

opportunity to greet all assembled here today, and to thank Congresswoman Capito and Chairwoman Waters for holding this important congressional field hearing in Berkeley County and in the 

Berkeley County Commission chambers. Like much of the rest of 

the country, Berkeley County has wrestled with the struggle for affordable housing for our citizens. Berkeley County has partnered 

with Jefferson and Morgan County Commissions in the City of 

Martinsburg as part of an Eastern Panhandle Housing Consortium 

which offers Federal finances to assist in downpayments and closing costs for home buyers seeking their portion of the American 

dream. 

We appreciate all efforts to bring affordability issues to the attention of Congress and to partner in creative means of making 

this American dream possible to all Americans. 

Thank you for your choice of Berkeley County for this important 

congressional field hearing. We appreciate your attention to these 

important matters. 

Thank you. 

Chairwoman WATERS. Thank you very much. 

2 

I would especially like to thank the subcommittee’s ranking 

member for requesting that I hold a field hearing focused on affordable housing challenges here in the State of West Virginia. 

When Ranking Member Capito requested this hearing, I was 

pleased to grant her request because I have become very interested 

in the unique housing challenges facing West Virginia. Although it 

has a relatively small population, with 1.8 million residents as of 

2007, West Virginia’s housing market presents large challenges. To 

an outsider, at first glance, it seems as if housing is affordable. For 

someone like me who comes from Los Angeles where the median 

home price is $529,000, the housing costs in West Virginia seem 

downright reasonable. It costs over $400,000 less to purchase the 

median home here. 

On the other hand, reasonable does not necessarily mean affordable. West Virginia has one of the Nation’s highest rates of individuals living in poverty with 17.3 percent of individuals in poverty 

compared to the national average of 13.3 percent. Only Mississippi, 

Louisiana, the District of Columbia, and New Mexico have a higher 

poverty rate. 

In terms of median family income, West Virginia rates last nationally. In 2006, West Virginia families earned a median family 

income of about $44,012, substantially below the national median 

of $58,526. 

The high poverty rate and low median family income make affordable housing especially critical. According to the National Low 

Income Housing Coalition, 81 percent of the 15,074 extremely-lowincome renters in the Second Congressional District, which includes the City of Martinsburg, are extremely cost-burdensome, 

paying over 50 percent of their income on housing costs. 

This is a situation that has gotten worse. From 2000 to 2008, fair 

market rents have increased by an average of 39 percent in Martinsburg, and a renter would have to earn $13.10 an hour in order 

to afford the rent on a two-bedroom apartment. 

Given this situation, it is clear that more affordable rental housing opportunities are needed. Unfortunately, public housing and 

Section 8 resources are being pushed to the limit and are failing 

to meet the overwhelming need. As Mayor Karos will testify, the 

City of Martinsburg only has 300 housing choice vouchers for 

12,500 low-income households. Like every other State, West Virginia has been affected by the foreclosure crisis, albeit not to the 

same extent as my home State of California which has the Nation’s 

second-highest foreclosure rate. 

Although West Virginia has one of the lowest foreclosure rates 

in the Nation, 48th overall, with only one foreclosure for every 

4,501 households, the effects of the housing bubble and burst are 

still being felt. Here, just as in States with high foreclosure rates 

such as California, Nevada, and Ohio, the foreclosure crisis and 

subprime meltdown are affecting West Virginians in different 

ways. 

First, increased housing costs resulting from the bubble have 

served to place rental housing further out of reach for many families in West Virginia, including those in the Eastern Panhandle. Although housing prices are falling in some parts of the State, such 

as Jefferson County, homeowners trying to rent their properties are 

3 

reluctant to charge a market rent because they are trying to cover 

the cost of a higher mortgage. As a result, affordable rental housing remains out of reach. 

Second, falling home prices in some parts of the State have 

caused some families to be upside-down on their mortgages, owing 

more than they are worth. 

For these families, refinancing their mortgages isn’t an option because of the credit crunch and tighter lending standards. Even for 

families with sound mortgages, tighter lending standards resulting 

from the subprime meltdown have served to reduce credit to households in West Virginia, much as it has to households in California. 

Third, abandoned and foreclosed properties are taking a toll on 

the Nation’s neighborhoods, including those in West Virginia. This 

is why I introduced H.R. 5818, the Neighborhood Stabilization Act 

of 2008, to provide much-needed bonds to States and local governments detailed with this aspect of the foreclosure crisis. 

I am extremely pleased that the housing rescue package recently 

passed by the House and Senate and expected to be signed into law 

by the President today will include $4 billion for States and cities 

to buy up and rehabilitate abandoned foreclosed properties and put 

them back on the market. I must note that this provision will provide $23.1 million for the State of West Virginia, with almost half 

going to the Second Congressional District for the rescue and rehabilitation of 748 abandoned and foreclosed properties. 

These funds will also have a stimulative effect on West Virginia’s 

economy by: One, generating $48 million in additional economic activity; two, creating 447 new jobs; three, producing $40.6 million in 

property taxes; and four, saving the State about $7.5 in police, fire, 

trash collection, and other costs associated with the maintenance 

of abandoned and foreclosed properties. 

It is clear that the recently passed housing bill will go a long way 

toward alleviating the foreclosure crisis in not only those States 

hardest hit but also in States like West Virginia that experience 

the indirect effects of the housing downturn. So I am looking forward to hearing from our two panels of witnesses on the state of 

affordable housing in West Virginia. 

Let me just say that it gives me great pleasure to recognize our 

subcommittee’s ranking member, who has worked so hard on all of 

these issues. And, as a matter of fact, I am going to admonish my 

staff just a little bit. 

It should not be me giving you all of the good news. Your Representative should be doing that. And I am sure that she will. 

It is my great pleasure to yield as much time as needed to Mrs. 

Capito. Thank you. 

Mrs. CAPITO. I want to thank Chairwoman Waters for her leadership on our committee. 

For those of you who are just now seeing her for the very first 

time in person—I am certain that most everyone in this room has 

seen her leadership through the national media, and she is quite 

an advocate and I have learned quite a bit by sitting at her side 

as the ranking member of the Housing Subcommittee of the Committee on Financial Services. 

4 

I also want to welcome you to West Virginia. I asked you last 

week if you had ever been to West Virginia; well, you have been 

here now. 

Chairwoman WATERS. That is right. 

Mrs. CAPITO. I was going to think of something really kind of 

corny, like making you an honorary Mountaineer or something like 

that, but I can bring you something when we get back. 

Chairwoman WATERS. Does it mean I have to climb a mountain? 

Mrs. CAPITO. Yes, it does. 

But, anyway, welcome to the Mountain State and to the beautiful 

City of Martinsburg. 

As you have probably already seen, the unusual geography of our 

State provides many unique challenges to the availability of affordable housing. Areas like Martinsburg and the Eastern Panhandle 

are rapidly growing, while other regions are facing stagnant growth 

and an older stock of affordable housing. 

It is my hope that this hearing will highlight some of the challenges rural States, like West Virginia, face with the availability of 

affordable housing. 

At times, West Virginia leads the Nation in some of the statistics 

that you read in the less than desirable categories. However, in 

many ways, we are a leader in the availability of affordable housing. And you did mention a statistic that we are 48th in foreclosure, and we are always happy to be at the bottom of the wrong 

list. We are very happy about that. 

But we do have challenges, particularly here in the Eastern Panhandle. West Virginia has some of the highest rates of homeownership, just over 78 percent, which is almost 10 points higher than 

the national average, of the population who own their own home. 

And recent studies have shown that we have some of the lowest 

rates of foreclosure, as we both mentioned. At a time when many 

other regions of our Nation like your region in California are facing 

tremendous challenges, West Virginia continues to persevere. That 

is one of our ingrained qualities that we are all born with—it is already in my statement. I attribute this to the hardworking people—our staffs are on the ball—and we have a lot of hardworking 

people, and we fulfill our obligations. 

Although we are a leader in homeownership rates, we still have 

challenges. Significant growth in the Eastern Panhandle here, we 

have a lot of folks who move into the Eastern Panhandle from the 

suburbs of Washington, and the suburbs of Virginia for a lot of reasons. I say it is because of quality of life, affordability, and a low 

crime rate. I could go on and on. But that is why a lot of folks come 

here, and it has been a blessing to our economy. 

However, this growth has also led to this region being one of the 

few in the State that is affected by the recent troubles in the 

subprime mortgage market; Berkeley, Jefferson, and Morgan Counties have slightly higher rates of foreclosure. 

West Virginia also faces challenges in meeting the needs of our 

veterans and disabled populations. We have a very large VA center 

here in Martinsburg we are very proud of. We have significantly 

higher proportions in the State than the national average of both 

veterans and disabled populations. 

5 

I am looking forward to learning more from our witness from 

Men of Valor and Visions, a group dedicated to caring for the men 

and women who serve our Nation so honorably. The care of our veterans must be a community effort, and it certainly is here in Martinsburg and in Berkeley County. I am pleased to share in the 

great accomplishments of this group. 

Unfortunately, our State’s low median income can place undue 

burden on those who are trying to better themselves and become 

more independent: 81 percent in the Second District of extremelylow-income renters are severely cost burdened, as you mentioned in 

your statement. This is particularly difficult for families living in 

growing areas like the Eastern Panhandle where the cost of living 

is in some case outpacing wage increases. With the migration from 

the metropolitan area also comes the higher cost of living, in some 

cases. 

I would like to thank our witnesses for joining us today. This is 

a wonderful outpouring of community support. I think we have 

great witnesses. We are going to learn a lot. 

This is really how we run a hearing in the Rayburn Building, 

with Ms. Waters wielding the gavel. And we are going to try to 

stick to the procedure and question the appropriate witnesses when 

they are finished giving their testimony. 

The information we will share with you today is instrumental in 

highlighting some of the unique challenges facing West Virginia. 

Again, I would like to thank the chairwoman for bringing the 

subcommittee to West Virginia. It means quite a bit to us and we 

look forward to our continued work together. 

I will yield back the balance of my time. 

Chairwoman WATERS. Thank you very much. I am delighted to 

be here. 

I would now like to introduce our first panel of witnesses: the 

Honorable Roy A. Bernardi, Deputy Secretary, U.S. Department of 

Housing and Urban Development; and the Honorable Russell T. 

Davis, Administrator, Housing and Community Facilities Program, 

Rural Development, U.S. Department of Agriculture. 

Thank you all for appearing before our subcommittee today. And 

without objection, your written statements will be made a part of 

the record. You will now be recognized for a 5-minute summary of 

your testimony. 

We will start with you, Mr. Bernardi. 

STATEMENT OF THE HONORABLE ROY A. BERNARDI, DEPUTY 

SECRETARY, U.S. DEPARTMENT OF HOUSING AND URBAN 

DEVELOPMENT 

Mr. BERNARDI. Thank you, Chairwoman Waters. 

It is really nice to be here in the beautiful State of West Virginia 

with Ranking Member Capito. 

Mrs. CAPITO. Is your microphone on? 

Mr. BERNARDI. The only important part I stated there was the 

beautiful State of West Virginia. 

Chairwoman WATERS. I think they heard you in the back. 

Mr. BERNARDI. While West Virginia enjoys one of the lowest 

housing foreclosure rates in the country, and that has been a drastic—in fact, foreclosure rate on subprime is even lower than the 

6 

overall foreclosure rates as I understand it—there are still many 

challenges facing the State when it comes to affordable housing. 

My testimony will discuss some of the programs at HUD and 

how those programs affect affordable housing here in West Virginia. I will discuss the status of public housing and voucher programs, programs that serve our veterans, our homeless as well as 

elderly housing. 

The Housing Choice Voucher Program is the Federal Government’s largest program for assisting very-low-income families, the 

elderly, and the disabled, so they can afford decent, safe, and sanitary housing in the private market. Because housing assistance is 

provided on behalf of the family or individual, participants are able 

to find their own housing, including single-family homes, townhouses, and apartments. Housing choice vouchers are administered 

locally by public housing agencies who receive their Federal funding from HUD to administer the voucher program. 

There are 24 housing authorities in West Virginia, with the 

Charleston Housing Authority serving most of the panhandle area. 

Over 14,000 vouchers were leased monthly during the period of 

April 2007 to March of 2008, and approximately $54 million of 

funding was used for the units leased during that period of time. 

The Housing and Urban Development Veterans Affairs Supportive Housing program, known as HUD–VASH is a supportive 

service program for homeless veterans that combines HUD’s Housing Choice Voucher Program rental assistance with case management and clinical services provided by the Department of Veterans 

Affairs at its medical centers and in the community. The 2008 Consolidated Appropriations Act provided $75 million to the HUD–VASH Voucher program. And a total of $433,600 was 

awarded to three PHAs in West Virginia to fund 105 HUD–VASH 

vouchers. The three PHAs, the Huntington, Martinsburg and 

Clarksburg Housing Authorities, each receive funding for 35 HUDVASH vouchers. The way this works is that the veterans are referred to the PHAs by their partnering VA medical centers. As of 

July 2008, seven veterans have been referred to the PHAs by their 

partnering VA medical centers: four to Clarksburg; and three to 

Martinsburg. Vouchers were issued to all seven of the referred veterans. One veteran has been brought under leased contract by the 

Clarksburg Housing Authority. Two of the veterans in Martinsburg 

have found units, and the PHA will bring the units under Housing 

Assistance Payments contracts as soon as the units are inspected. 

Now it seems like this is taking a considerable amount of time, 

but we really didn’t receive all that we needed until May of 2008. 

The Veterans Department is putting together training teams to put 

on more advisors, and in August, there will be a national meeting, 

and hundreds of additional advisors and inspectors will be onboard. 

The Huntington Housing Authority expects to receive its first 

three referrals from the VA medical center in the next week or two. 

The Continuum of Care is a set of three competitive awarded 

programs created to address the problems of homelessness. We are 

trying to do this in a comprehensive manner with other Federal 

agencies and, of course, our State and local partners. In 2007, the 

Continuum of Care National Homeless Competition, all four of 

West Virginia’s Continuums of Care receive funding. And 80 perVerDate Aug 31 2005 17:13 Oct 24, 2008 Jkt 044907 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 K:\DOCS\44907.TXT TERRIE
7 

cent of their projects were awarded a total of $2,280,000 to reduce 

the incidence of homelessness and the COCs within those communities. HUD funded 342 beds and will serve over 1,300 people in 

20 Supportive Housing and Shelter Plus Care projects. 

In the continuing competition, homeless veterans were represented by 16 organizations in West Virginia. And as the continuums know, when you have that type of representation, not only 

does that help the veterans, but it also adds points to the competition for the Continuums of Care. 

The continuums are required to involve organizations serving 

veterans with specific experience in their programs. The Emergency Shelter Grant program provided West Virginia with a total 

of $1 million. That is a $130 million program nationwide, and that 

provides the basic shelter and essential supportive services for 

those who are in desperate need. 

Now HUD defines elderly households as those with either a head 

or spouse who is at least 62 years of age. The Census shows that 

West Virginia has the 5th highest proportion of elderly population, 

14 to 16 percent, the 5th in the country, behind only Florida, Pennsylvania, Iowa, and Rhode Island. Now that tells me that people 

love West Virginia and like to spend their senior years here. There 

are 264,800 elderly people who live in West Virginia, and that is 

measured by the American Community Survey. 

The need for affordable housing for the elderly is great in West 

Virginia, as it is in other areas of the country as well, and it is increasing. There are currently 185 project-based Section 8 developments in West Virginia with almost 12,000 units. Of those units, 

11,000 are under project-based Section 8 housing assistant payment contracts today. The number of contracts expiring through 

December of 2008 is 18; those 18 contracts involve just over 1,500 

units, and we expect that these contracts will be renewed this year. 

For the past 3 years, all owners with expiring contracts chose to 

renew, and there were no opt-outs. And obviously, that is very important. That is very good. That maintains the number of units 

that you have. 

Now, I want to conclude by thanking Congresswoman Capito and 

Chairwoman Waters for their early and steadfast support of FHA 

modernization, the landmark bill that they both just addressed, 

that the President will sign today, which will go a long way in dealing with the foreclosure crisis that we face in this country. 

And I will be happy to take any questions on that and anything 

else you may have. Thank you. 

[The prepared statement of Deputy Secretary Bernardi can be 

found on page 30 of the appendix.] 

Chairwoman WATERS. Thank you very much. 

Now, the Honorable Russell Davis for 5 minutes. 

STATEMENT OF THE HONORABLE RUSSELL T. DAVIS, ADMINISTRATOR FOR HOUSING AND COMMUNITY FACILITIES PROGRAM, RURAL DEVELOPMENT, U.S. DEPARTMENT OF AGRICULTURE 

Mr. DAVIS. Madam Chairwoman and Madam Ranking Member, 

I would like to thank you for inviting USDA Rural Development to 

your hearing this morning. 

8 

I would like to start by describing the overall national situation 

for our Agency because that provides some context for West Virginia’s situation. Nationwide, USDA Rural Development is near its 

all-time low in foreclosure rates. The real point is that not all markets in America are the same. Some are doing well; some are doing 

poorly. 

And that is mirrored in this State also where you have the Panhandle experiencing one type of market and another type of market 

in some of the other areas of the State. In fact, we have only four 

States where our foreclosures are up. I call these situations palm 

trees and smokestacks. We have California, Texas, and Florida; 

those are the palm trees, and those are desirable high-cost areas. 

And then we have Michigan, which is experiencing out-migration 

and loss of jobs. And these are the two fact patterns that we face 

in rural America, and they require two different sets of policies in 

dealing with them. 

One of the things that we are very proud of is our work with people facing foreclosure. We now have a 63 percent cure rate on our 

foreclosures. We keep 63 percent of the people who are going 

through foreclosure with us in their homes and bring them back 

current on their loans. That is something we have been working 

very hard on, helping people who are stressed, who are facing higher gas prices, higher insurance costs, and local taxes. 

It is also important to look at why rural America is facing overall 

a different level of stress than some of the urban areas. And it is 

really four factors that I have identified in my written testimony, 

which I am following fairly closely here: 

The first is that rural America never got the big bubble that 

some of the suburban and urban areas got. The fact is that there 

are 2,000 non-metro counties in America, and almost half of them 

face either stagnant populations or declining populations. So we 

never got the big increase in prices in most of the areas. 

Where we do have the increase in price, what our Agency can do 

to help is to maintain the flow of mortgage money into those markets to keep bringing new home buyers in and to keep the prices 

up at market levels instead of a decrease in prices below market 

levels caused by a lack of market credit. 

The second thing is that we have emphasized solid underwriting. 

Sometimes people complain about bureaucracy and so forth, but we 

require the documentation. We want to see the income tax returns. 

We want to see the actual appraisals and evidence of solid underwriting. At the same time, we are very proud of the fact that we 

can step in and make human decisions. And this is something that 

has sometimes been lost in the mechanical numbers-based underwriting; 23 percent of our loans go to people with fair or poor or 

no credit rating, fully a quarter of our loans. Yet our delinquency 

rate is 35 percent lower than the private sector’s. We are making 

loans to what would be arguably lower credits but having a better 

experience of it. And I think that speaks a lot toward solid underwriting, but having good decisionmaking and counseling and educating our borrowers. 

The third thing that we are seeing nationwide is that, although 

we don’t make adjustable rate loans, our Single Family Direct Loan 

Program is adjustable rate in the sense that we change our subVerDate Aug 31 2005 17:13 Oct 24, 2008 Jkt 044907 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 K:\DOCS\44907.TXT TERRIE
9 

sidies. But the difference is that we don’t just go to a new interest 

rate and say, here, meet this higher interest rate. We do a means 

test. In other words, we approach every change in the rate as if it 

were a new loan, and we don’t raise the payments unless the person’s income can support it. So we means test any change in our 

payments, and that keeps us from having payment shocks that 

lead to foreclosure and stress. 

And finally, we do not hastily seize homes of borrowers who are 

in trouble. We have a 600-person servicing operation in St. Louis. 

We work closely with our borrowers. We get them counseling. We 

talk to them. It is just critical that lenders communicate with borrowers who are in trouble because there is a lot that can be done. 

And we are very proud of our success rate in keeping people in 

their homes and having a successful homeownership rate. Over 98 

percent of our borrowers stay in their homes over the life of the 

loans, and we are very proud of that. 

We are also proud of the fact that we are stepping in where the 

private sector is not able to make loans. Our volume nationwide 

has doubled in the past year. And we are seeing this in West Virginia, also, that we are doing our job as a lender of last resort essentially. We are there when the private sector isn’t. 

I have noticed that it runs in reverse. When the private sector 

is doing well, we step back. And over the period of 2001 to 2007, 

we actually cut our portfolio in half, 250,000 loans. We counseled 

and got people private-sector credit ratings and into the private 

sector. So we are very pleased with that. 

I do want to mention our rental operations in West Virginia. A 

lot of people ask about the division of labor between HUD and 

USDA. USDA, the Department of Agriculture, is limited to towns 

under 20,000 in population. 

Secretary Bernardi mentioned that they have 185 multifamily 

properties in the State, and we have 245 properties. Now ours are 

smaller, but we have tried to put a pin in every little town on the 

map. And we are very committed to keeping those properties in our 

portfolio as assistive properties for very-low-income residents. Our 

average income is about $9,000 per year. These are very-low-income residents. And we have a strong commitment to keeping this 

portfolio together. 

Nationwide, we have a vacancy rate of about 30,000 units. Congresswoman Capito had asked this morning what kind of waiting 

lists we have. It is just one of the facts of housing that sometimes 

the housing is not where the people are. We have empty housing 

units with full subsidies available, but they are in places where 

there are not the people. And so we are working to realign that and 

bring the resources more in line with the need. 

That is something with which State Director Rice here in West 

Virginia can help and encourage the localities who are here to discuss the availability of those resources in West Virginia. 

Thank you. 

[The prepared statement of Administrator Davis can be found on 

page 32 of the appendix.] 

Chairwoman WATERS. Thank you very much, Mr. Davis. 

We are going to take a little time for some questions now. 

10 

I suspect that Congresswoman Capito has a number of questions 

that she would like to ask, so I am just going to take a little bit 

of time. 

I am just going to ask, first, Mr. Bernardi, about small public 

housing authorities. I understand that they are run very well here, 

but sometimes I think, based on the information that I have, that 

some of the policies that apply to the huge or the big ones are the 

same policies that apply to smaller ones. Do you see that as a problem in trying to use the one-size-fits-all approach in the administration of public housing authority programs? Or have you not experienced that as a problem at all? 

Mr. BERNARDI. We have not experienced that as a problem. Basically, the formula is set that each housing authority receives the 

funding based on the need in that area. There is always more need. 

There is always a waiting list. But as far as the administration of 

the programs, I think our counterparts at Agriculture do the smaller ones in the rural areas, but the smaller housing authorities, it 

is easier to get a handle on those. It is easier to monitor those. 

In the final analysis, they have the same set of circumstances 

and difficulty as the larger authorities, which is lack of dollars to 

place the people who are on the waiting lists. 

Chairwoman WATERS. Thank you very much. 

And to Mr. Davis, I am extremely impressed with the way in 

which you do workouts when you have constituents who are in 

trouble. We have not experienced that, as we have learned, what 

the servicers do and do not do as they handle this subprime meltdown that we are experiencing in the country. 

When you talked about the resets, and you don’t necessarily have 

to charge an increased interest rate no matter what the market is 

dictating, and I suppose you don’t also charge an extra margin that 

I have learned about in working with some of the other financial 

institutions. In addition to the going interest rate, they can increase that interest rate 1, 2, or 3 percentage points with something called the margin. You don’t use that at all, is that correct? 

Mr. BERNARDI. No, ma’am. We do a strict means test and don’t 

charge more than 29 percent of their income. We do not raise the 

payments above what they can afford. 

Chairwoman WATERS. That is fabulous. So how does it all end 

up in this contract where you contracted for a certain amount for 

that entire mortgage? Does that mean that the principal ends up 

being reduced somehow? 

Mr. BERNARDI. What we do is we move principal out to the end, 

and we do take a portion of the equity in the house, if necessary, 

and we recapture that but only upon sale and only under certain 

circumstances if it won’t harm the borrower. But we do take an equity interest. We have certain flexibility that a lot of private-sector 

lenders who have designed their system for good markets find that 

they don’t run the same way in bad markets. 

Chairwoman WATERS. Well, perhaps you could write this up for 

us so that Mrs. Capito and I can take it back and give it to the 

HOPE NOW Coalition, so that they can learn how to do this. 

Thank you very much. 

I yield to the gentlewoman. 

Mrs. CAPITO. Thank you. 

11 

I would like to first ask Mr. Bernardi a question. We just passed 

a massive housing bill and foreclosure avoidance act, a prevention 

act. And could you tell me how you think that is going to influence 

people who are facing foreclosure right now through HUD programs? I know it has FHA in there. Could you give us a little background on that please? 

Mr. BERNARDI. Sure, Congresswoman. The FHA, back in August 

of 2007, we initiated what we call FHASecure. And the reason I 

bring that up is, when we first initiated that program, it was only 

to help those people who were already—who were behind in their 

payments but were not in a foreclosure situation. 

But going forward, we have helped 285,000 families to date refinance through FHASecure. And just a few months ago, we extended the ability for people to refinance even up to 3 months when 

they would be delinquent on their payments. 

But the bill that just passed is going to provide us, thanks to the good work of all of you, another $300 billion in capacity to help 

those individuals who are basically underwater, people who are facing foreclosure. How that will work is that we will—lenders that 

have to do it under their own volition will deal with those borrowers. We will be doing the underwriting. And hopefully, by the— 

that program will begin October 1st of this year, now that the bill 

has been passed. It will run through September of 2011. And we 

are anticipating it will be able to help 400,000 to 500,000 families 

refinance, get away from the rates that they had, put it into a fixed 

rate, if you will, and that would be FHASecure. We are kind of 

hoping that we will be able to help anywhere from 700,000 to 

800,000 families over that period of time. 

The contact that you probably should have is that you can always contact the Housing Counseling Agency at HUD.gov and also 

the HOPE NOW Alliance that Chairwoman Waters talked about. 

You can reach them at 1–888–995–HOPE, and they will help you 

in the modification of your mortgage. You can also call FHA, of 

course. 

We are very excited that we have had this opportunity to assist. 

A lot of people are going to say, is this going to be enough? Well, 

I think it is a step in the right direction. At least we are making 

progress here. We are going to help folks who are right now looking—not only are they underwater. But the key though, as I go forward here, is that the lenders have to be able to participate. They 

can’t pick off just the good notes that they are going to keep and 

send everything else over to FHA that is going to be a problem. 

That is why our underwriting is very, very important. The loans 

must have been originated on or before January 1, 2008. Now the 

borrowers’ mortgage debt to income ratio must be at least 31 percent. The borrowers’ household debt to income must be at least 43 

percent. We want to help the people who need it the most. And we 

are going to validate the income and the employment of all borrowers. We are not going to have any Ninja loans. And we are not 

going to provide, obviously, refinancing to individuals who cannot 

afford the numbers that come on the board. 

The way this will work is the lending institution—we are only 

going to be able to insure 90 percent of the present value of the 

home, which is very, very important. And so that will leave the 

12 

lender with obviously some exposure. But if things go the way we 

would like, and the homeowner can make those payments, as times 

get better, and then there is more equity in that home, and that 

equity, upon the sale of the home, will be shared not only between 

the borrower but also with the government. That is a long answer 

to your question. 

Mrs. CAPITO. Thank you for that explanation. 

I think the base of this, too, is something that we have tried to 

encourage in the hearings that we have had. And certainly our witnesses, if you are facing foreclosure, the last thing that—intuitively 

the last thing you will want to do is talk to your bank or talk to 

your lender because you are almost in avoidance. It is too tough. 

There is no way out. 

We have been trying to encourage people that they have to work 

with their lender. And the best thing that you can do is contact 

your lender. And with this new program coming on, it has to be 

in conjunction with your lender. It is not required; it is a voluntary 

program. So you can’t be avoiding your lender and participate in 

this problem at the same time. 

Mr. BERNARDI. Congresswoman Capito, in this legislation I believe it is another $170 million for counseling in addition to the 

money—the National Reinvestment Corporation. You can’t stress 

enough that individuals need to call, make that contact, and get in 

touch with the counselors to start the program. 

Mrs. CAPITO. Right. Thank you. 

And a question for Mr. Davis. In a State like West Virginia, and 

certainly across the country, a lot of our public housing stock is 

aging, as the rest of us are. And I think that this is a cause of 

great concern because—well, for obvious reasons. 

Now, I toured two very beautiful facilities today, and one was 10 

years old, and one I believe was like 16 years old. And they are 

holding up quite nicely because they are well-maintained and all 

of the things that you want. 

But what are you seeing long term here in terms of—I think a 

lot of things were built in the 1950’s. And it is time to reshift, 

renew, rehabilitate, rehab. What are we going to do here about 

this? 

Mr. DAVIS. I think it is very instructive that rehab is so much cheaper than new construction. We spend $100,000 per unit on average building a new unit, but only $23,000 rehabilitating an old 

one. So, for the same amount of money, we can rehabilitate four 

properties or we can build a new one. Because of the vacancy rates, 

we would much rather do rehabilitation. That is where all of our 

extra resources are going now. 

Mrs. CAPITO. And does Agriculture have the resources to rehabilitate? I mean, is that part of your rural housing— 

Mr. DAVIS. Yes. This year, we will rehabilitate 200 properties, 

and we have a total portfolio of 16,000 multifamily properties; as 

I have said, in West Virginia, 245 properties. So over the course 

of 30 years— 

Mrs. CAPITO. So you are doing all of ours, and then— 

Mr. DAVIS. Well, for a 30-year life cycle, we will cycle through all 

of them. 

Mrs. CAPITO. I am kidding. 

13 

Mr. DAVIS. We don’t have enough money to do it all in 1 year. 

We cycle through. 

Mrs. CAPITO. Right. Thank you. 

Chairwoman WATERS. Thank you. 

If you need additional time for more questions, please. 

Mrs. CAPITO. No. I am good. 

Chairwoman WATERS. Well, I would like to thank you very much 

for being here and sharing this important testimony with us today. 

And if there is further information needed, we will be in contact 

with you. 

Thank you very much. 

Mr. BERNARDI. Thank you. 

Chairwoman WATERS. I would like to call our second panel of 

witnesses forward. First, the Honorable George Karos, Mayor, City 

of Martinsburg. Mr. Mayor, where are you? Am I pronouncing your 

name correctly? Is it ‘‘Karos’’ or ‘‘Karos?’’ 

Mr. KAROS. Madam Chairwoman, it is ‘‘Karos,’’ but it is pronounced all kinds of ways. 

Chairwoman WATERS. Thank you for being here, Mr. Mayor. We 

are delighted to be in your City. Driving in, we could not help but 

remark what a beautiful place it is. 

Also, we have Ms. Catherine Dodson, executive director, Martinsburg Housing Authority; Mr. David Ross, Men of Valor and Visions; 

Ms. Mary Skeens, executive director, Community Works in West 

Virginia; and Mr. David Rathbun, West Virginia Housing Development Fund. 

Thank you all for being here today. 

Let’s see who we are going to start with here. We are going to 

start with the mayor. 

STATEMENT OF THE HONORABLE GEORGE KAROS, MAYOR, 

CITY OF MARTINSBURG, WEST VIRGINIA; ACCOMPANIED BY 

PATRICIA McMILLAN, COMMUNITY DEVELOPMENT DIRECTOR, CITY OF MARTINSBURG, WEST VIRGINIA 

Mr. KAROS. Madam Chairwoman, thank you for those kind remarks. I wanted to thank you publicly, but I couldn’t find the right 

button to turn it on to thank you. 

We agree with everything you said about Martinsburg. And 

please come back for a visit. 

Madam Chairwoman and Congresswoman Capito, thank you for 

the opportunity to address the subcommittee today regarding affordable housing challenges facing the City of Martinsburg. We face 

several considerable challenges here in the City and throughout the 

Eastern Panhandle. 

Housing costs have risen dramatically. Even in a declining market, costs remain too high for many families earning local wages. 

This is true for home buyers and renters. Home buyers need assistance with downpayment and closing costs to enable them to obtain 

affordable mortgages. 

Many of our homeowners are elderly people living on fixed incomes that do not keep up with the increased costs of living. 

Heating costs are a tremendous burden of many, and our housing 

means is deferred because of other demands on their small inVerDate Aug 31 2005 17:13 Oct 24, 2008 Jkt 044907 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 K:\DOCS\44907.TXT TERRIE
14 

comes. Our low-income homeowners need assistance to repair their 

homes and to make them more energy-efficient. 

Rental housing costs are very high, resulting in 40 percent of 

renters paying more than 30 percent of their income for rent. Nearly 25 percent pay more than half of their monthly income for housing. 

This housing cost burden places family at risk of eviction, unstable housing situations, and homelessness. As heating costs nearly 

double this winter, even more families will face eviction or the 

threat of having utilities turned off. 

Eviction prevention is critical to preventing homelessness in our 

community. Homelessness among veterans in Martinsburg creates 

great demands on the local men’s shelter and on our limited mental health and substance abuse services. We have made a number 

of efforts with our limited local and Federal resources to address 

these affordable housing problems in our City and the Eastern 

Panhandle. 

First, we appreciate that, for the past 4 years, we have received 

Community Development Block Grant funds from HUD. Beginning 

last year, we implemented a HOME consortium for the City of 

Martinsburg and the Eastern Panhandle counties of Berkeley, Jefferson, and Morgan. Using these funds, plus funding from local 

governments, we have tried to address affordable housing problems 

by providing no-interest loans for downpayment and closing costs 

for low-income buyers with HOME and CDBG funds; using HOME 

funds to support affordable housing development in Jefferson 

County; providing security deposit assistance to low-income renters 

in Morgan County; providing small grants for housing repair 

matched with West Virginia housing fund loans; and 

supplementing emergency rental assistance to prevent eviction. 

These efforts are not enough by themselves. Local governments 

and our citizens need help to make housing affordable for homeowners and renters. We are starting to work together as a region 

to address affordable housing needs and the housing needs for all 

working families, but we have a long way to go to make sure every 

household has decent affordable housing. We need your help as 

housing costs remain high and energy and food costs increase faster than wages. 

The Federal Government can help in the following ways: Our 

Federal funding for CDBG and HOME has decreased every year. 

We now receive 25 percent less CDBG funds than we did 4 years 

ago. The Federal Government should not make it harder to help 

ourselves. There is a long waiting list for winterization services in 

Berkeley County. 

We need more Section 8 rental assistance in the Eastern Panhandle. We have less than 300 housing vouchers for 12,500 low-income households. Families are on long waiting lists for rental assistance, or the list is closed for a month at a time. 

More fuel assistance is needed so families can remain in their 

homes. 

When our veterans leave the local VA center, they need more 

comprehensive support services and better housing opportunities. 

15 

Again, thank you for the opportunity to address the subcommittee. I appreciate your interest in understanding our affordable housing needs and challenges. 

Thank you, also, Congresswoman Capito. 

[The prepared statement of Mayor Karos can be found on page 

39 of the appendix.] 

Chairwoman WATERS. Thank you, Mr. Mayor. 

Ms. Dodson. 

STATEMENT OF CATHERINE DODSON, EXECUTIVE DIRECTOR, 

MARTINSBURG HOUSING AUTHORITY 

Ms. DODSON. Hello. I am the executive director of the Martinsburg Housing Authority. We are considered a small to medium 

housing authority. We have 327 units of public housing, and our 

ACC allows us for 285 vouchers for the Berkeley, Morgan, and Jefferson County area. 

Our current budget authority does only allow us to lease up and 

help rental assistance with about 220. We have just recently, as 

was earlier mentioned, been awarded 35 of the HUD–VASH vouchers for the veterans program. 

Our public housing stock is several years old. Our main concern 

is keeping our units decent, safe, and sanitary, and keeping all repairs up. 

I differ with Mr. Bernardi’s assumption; I think a small housing 

authority being compared to larger housing authorities is a hindrance. Our housing authorities in West Virginia all are run very 

well. When we have to go with the regulations of a large housing 

authority, it does make it harder for us. 

Our biggest concern right now is HUD is asking for asset-management and project-based accounting. We have to go with that if 

they keep going, because anything over 250 units, they want you 

to do a separate budget and financial work and all of the paperwork and have separate staff and everything for anything over 250 

units. 

All of our five complexes are within 10 blocks of each other. We 

have a central office, and we have a central maintenance workshop. 

And it works out very well. It doesn’t, in our opinion, make any 

sense to have to have equipment for each complex when we can 

within minutes take it anywhere we need it. 

We have a wonderful maintenance crew who can literally build 

a building from the ground up. If I have to separate them out in 

each complex, and bill their time to wherever they are or hire different ones, our people have been working there for over 20 years. 

They are very dedicated, and they are very conscientious. When we 

replace an appliance, for instance, we tear it apart if we can’t fix 

it and use the parts for something else. We don’t just throw it away 

and replace it. 

The housing authority units are in very good shape, and we take 

pride in that. It would be harder for us to have to do that kind of 

management because you have to divide your staff up. When it has 

taken this long, everybody knows what they are doing, and it can 

be more helpful. It takes more time away from us being able to 

work the units and get things ready. 

16 

We do have a long waiting list. It takes months for someone to 

get public housing once they apply. Section 8 can take from a year 

to 2 years as previously mentioned, and there are times when we 

do close the waiting list when it is unrealistic that they are going 

to wait so long. 

HUD comes in and inspects our public housing units. We have 

always had very good inspections. The inspectors come in, and we 

would like HUD to look over that, too. They can come in and give 

you a bad score on one inspection, and your unit can go from a 90 

percent to a 40 percent with something. 

Our last inspection in our elderly high rises, some of the tenants 

wrapped their emergency cords near their bed so they could reach 

it better, and that is against the regulations. It has to be hanging 

down straight on the wall. So we tell the tenants not to, and of 

course, they do. That is because they need it where they need it, 

so they can reach it. And then we get a bad score, which gives us 

less money and subsidy and things like that. So that is one of the 

things that small authorities, you know, can check on, and tenants 

do things that, you know, you can’t control. And then you end up 

getting less of a score. 

So we do feel it is a small authority that needs to be looked at 

a little bit differently than people with thousands. They have more 

staff, and they can do all of the different things. But a small authority will run good, and we watch them nicely. 

On our Section 8 program, the fair markets rents in this area are 

low compared to the rentals. Since our area is so close to Baltimore, D.C., and so many large areas, people move in, and they do 

think our rents sound reasonable. For their areas, they are. For our 

tenants, for our local people, they are not affordable. They are very 

high for our area. And with the utilities going up, we worry that 

the rents are going to have to go higher. If the tenant pays the utilities, that means we are going to have less money to pay toward 

the landlord’s rent because we have to add them together. And 

their rents are going to go up if the landlord is furnishing them, 

which will also put them out of our fair-market rent area. 

We are presently paying 110 percent as a payment standard for 

our fair market rents, which is allowable, and we still have a lot 

of complexes and things that are out of our range for our dollars. 

[The prepared statement of Ms. Dodson can be found on page 37 

of the appendix.] 

Chairwoman WATERS. Thank you very much. 

Ms. DODSON. You are welcome. 

Chairwoman WATERS. Our next witness is Mr. David Ross. 

STATEMENT OF DAVID ROSS, MEN OF VALOR AND VISION 

Mr. ROSS. Thank you very much, Chairwoman Waters, and Congresswoman Capito. 

My name is David Ross, and I am from an organization called 

M.O.V.V., Men of Valor and Vision. We are a veterans organization 

in the community here. We were established in May 2006 in my 

living room. We got together, a couple of veterans got together to 

try to help solve the problem of veterans coming from the VA hospital coming into the community and finding housing and changing 

their lives. 

17 

A lot of the veterans are coming from New York, Philadelphia, 

New Jersey, Washington, and surrounding areas. And there is a 

growing number now, and there are more coming to Martinsburg 

because Martinsburg is a friendly place. I find it very friendly. 

That is why I came here. There is less hassle, and the people are 

friendly. They are willing to help. They care. 

So we got the organization together. We have been in existence 

now for 2 years. We are located at 732 West King Street. We have 

an establishment now where we house nine veterans. We have a 

program that assists them with their living. You know, it is not 

just a place to live. It is an atmosphere they create for veterans to 

pretty much to better themselves, you know, to get some advice on, 

how do I get an ID; have an address so they can have mail sent 

to them; you know, other agencies that work throughout town; how 

do I seek a job, training, and looking out for jobs. 

We are also affiliated with a coalition, Berkeley County Coalition 

for the Homeless. It is not just for veterans; it is for anybody who 

is homeless. As veterans, we volunteer our time. We are Vietnam 

era and Vietnam veterans. We have two guys who were in the era 

of Vietnam, and we have three guys who are combat Vietnam veterans. And we all work together volunteering. You know, there is 

no profit. And we just come together and have meetings, discuss 

how to work in the community of Martinsburg to help the homeless 

veterans. 

We don’t have any numbers. We deal with them one by one, or 

two by one, whatever the case may be. If they are homeless, and 

they are parked up there at Kmart, or Wal-Mart, sleeping in their 

car, we pull them out of there and help them to do better, hook 

them up with agencies, find them someplace to live. 

We have been working with the VA hospital. When they are 

overcrowded and they have no place to go, they call us to see if we 

have available rooms. 

The only problem is now we are being overpopulated. You know 

we don’t have enough room to house all these guys. So what we do 

is we just call different agencies around town to see if anybody has 

a room. 

Now, in our program, we have a job development program. We 

have training where our main focus is to cover the guys’ homelessness and finances, merging back in the community, employment, 

education, housing, legal matters, addictions, voting, family, and 

health. 

Through the VA hospital, they come to us for pretty much veteran on veteran, peer to peer. The veterans in the area do better 

talking to other veterans who have experienced a war. We are trying to gear ourselves up now for the veterans who are going to be 

coming home from the war that they are in now. They need to be 

attached to another veteran as a buddy-buddy plan to help them 

get over issues as limbs have been cut off. It used to be PTSD, but 

now it is called brain trauma. You know, these guys need to talk 

to other veterans who have suffered brain trauma or PTSD. For instance, you have a guy whose legs have been cut off, his feet have 

been cut you have off, and he is laying up in bed, and he is saying, 

hey, can you help me scratch my toe? But there is no toe. So how 

does he deal with that? The VA hospital gives you medical insurVerDate Aug 31 2005 17:13 Oct 24, 2008 Jkt 044907 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 K:\DOCS\44907.TXT TERRIE
18 

ance and psychological. But when you have another person who 

has experienced that scratching of the feet when it is not there, it 

helps them out a whole lot with getting over it. 

We are there just to help the veterans merge back into the community, to get back with their families. And we do all we can. We 

are not funded by anybody else. We volunteer to do this. Just like 

I said, right now, we are very small, and we need to expand. You 

know, we have tried. We go for grants, you know, to try to expand. 

We need a bigger building. 

We need more housing that these veterans can afford. A lot of 

them, when they come back, they are not employed. You know 

when they come out of a war zone, the first thing they are, are 

homeless. If they can’t go back with their families, if they can’t go 

back with their wives or their husbands, you know, a lot of times 

they need to be someplace where they can gather their thoughts together and build back their self confidence, you know, from what 

the war has done to them to give them time to merge back with 

the family in the community, to know what is new. 

We have cell phones now, and there are different types of cell 

phones. And a lot of guys come home and a lot of things will be 

changed when they come home. And their thoughts are different. 

But we are just seeing them coming home. And to them, they are 

all right. And they are not. They are not. 

So I am just saying, my organization is just here to help here in 

Martinsburg any veterans or any homeless people to make the step 

to be a better citizen. 

[The prepared statement of Mr. Ross can be found on page 42 of 

the appendix.] 

Chairwoman WATERS. Thank you very much. 

Mr. Rathbun. 

STATEMENT OF DAVID RATHBUN, SENIOR DIRECTOR, SINGLEFAMILY PROGRAMS, WEST VIRGINIA HOUSING DEVELOPMENT FUND. 

Mr. RATHBUN. I am the senior director of single-family programs 

for the West Virginia Housing Development Fund. 

On behalf of the Housing Development Fund, its Board of Directors and staff, I want to express my appreciation to Chairwoman 

Maxine Waters and our Congresswoman Shelley Moore Capito for 

inviting me here today. 

The West Virginia Housing Development Fund is a State housing 

finance agency, and our role in West Virginia is quite different 

than others you may have heard from in the past or dealt with before. 

The Housing Development Fund only operates qualified mortgage bond programs and other Federal programs in the State, including low-income tax credits, HOME, and Community Development Block Grants. The Housing Development Fund is also one of 

the largest secondary market participants, and it is the State’s 

largest servicer of first mortgage loans. 

We have financed and assisted more than 104,000 West Virginia 

families, which has contributed significantly to West Virginia’s position of being the State with the highest percentage of homeownerVerDate Aug 31 2005 17:13 Oct 24, 2008 Jkt 044907 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 K:\DOCS\44907.TXT TERRIE
19 

ship in the Nation. One out of every seven West Virginia families 

is in a Housing Development Fund financed or assisted home. 

Throughout our history, not only have we fulfilled our responsibility to the people of West Virginia in order for them to be able 

to acquire affordable housing, but we also have approached each of 

our efforts in a very constructive fashion so that our families will 

be able to afford those homes in the long run. We have not sacrificed our underwriting philosophies in order to obtain high-volume business, nor have we given up on prudent underwriting 

standards as it relates to our multifamily practices today. 

The Housing Development Fund is the Nation’s only housing finance agency rated AAA by both Moodys and Standard & Poor’s. 

And I am pleased to advise you that we look back over our delinquencies over the last 6 years, and there are no notable spikes in 

those percentages. 

Being able to offer the wide variety of programs to our homebuyer public for more than 20 years, and that includes every county, hill, and hollow across the State, has also impacted delinquencies and foreclosure rates among our banks, mortgage lenders 

and mortgage brokers. We can thank Fannie Mae, USDA rural development, FHA, VA, and our mortgage insurers for our continued 

success. 

We have strong allies in West Virginia, a lot of them in the room 

today, to assist us in our efforts. And we meet monthly to discuss 

programs and efforts as well as our problems. Our interagency 

housing council is made up of builders, Realtors, lenders, not-forprofit housing providers, and a variety of other agencies who keep 

us focused and attentive to the needs of West Virginia home buyers. 

This council has stressed homebuyer counseling which has led to 

a strong funding effort by the Housing Development Fund and our 

State Affordable Housing Trust. We have a homebuyer counseling 

organization in each county. We require low-income buyers and our 

high loan-to-value customers to obtain the counseling. 

I will discuss a few of our programs now. The most utilized program for addressing the needs of affordable housing by Statewide 

borrowers is our Qualified Mortgage Bond program, better known 

as QMB. QMB provides a low fixed-rate mortgage for mostly firsttime homebuyers under an income limit per county. Each year, we 

help more than 2,000 families to chase the dream of homeownership through the QMB program. 

In addition to this benefit of borrowing up to 100 percent of the 

sales price of the home in the form of a loan, veterans are now allowed to take special advantage of this program even if they are 

not first-time home buyers. This additional benefit took effect on 

June 17, 2008, with the enactment of the Heroes Earnings Assistance and Relief Act. 

An additional challenge facing homebuyers is the downpayment 

required on most mortgages. To alleviate this burden on homebuyers, we created the Home Ownership Assistance Program. In 

essence, the program allows borrowers to obtain a loan up to 

$5,000 to cover the costs of downpayment and closing costs associated with the purchase of their home. 

20 

It should be also emphasized that, in addition to stick-built 

homes, our loans may be used for the purchase of condominiums, 

townhouses, and used manufactured housing, permitting the borrower to choose the type of property which best suits his or her 

needs and affordability. 

With West Virginia being mostly a rural State with a small community lender base, government-sponsored entities such as Fannie 

Mae and Freddie Mac encountered problems in lending to its banks 

and directly to the homebuyers in this State. In 1991, we established a solid relationship with Fannie Mae to act as a conduit to 

provide mortgage lending. And to date, we have provided almost $1 

billion to the citizens. 

As well as our main loan programs, we address the needs of the 

current homebuyers in repairing existing homes through such programs as HELP and Onsite Loan Program. The HELP program 

funds provide for emergency repairs to owner-occupied structures 

so that the families may live in a safe, warm, and dry environment. 

Loans up to $10,000 may be used to cover such items as heating 

systems, plumbing, electrical wiring, and roofing. 

In September 2007, we partnered with the Department of Environmental Protection to provide an Onsite System Loan which allows the State residents to upgrade, replace, or repair inadequate 

septic tank systems. We do recognize that the current economic 

conditions require further steps and actions to be taken to facilitate 

safe, decent, and affordable opportunities for the citizens of the 

Mountain State. 

We have been working with our National Council of State Housing Agencies in passing our Statewide concerns for incorporation 

into the Home and Recovery Act of 2008. 

Again, I would like to thank Chairwoman Waters and Ranking 

Member Capito for inviting me here today and I hope that your 

West Virginia experience is one that will not only be informative, 

but will benefit you in the future when you decide on programs. 

Thank you. 

Chairwoman WATERS. Thank you very much. 

I will recognize myself for a few questions. 

Mr. Mayor, I agree that CDBG funds are very important, and 

most cities would like to have more funds. Many cities are trying 

to develop additional resources in addition to the Federal funds, 

CDBG and HOME funds. Some people are trying to create housing 

trust funds where they are able to attract money from other 

sources to help supplement what they are getting in CDBG and in 

other ways. 

And I am not sure how you work with the Housing Finance 

Agency, but have you been in discussion about maybe a housing 

trust fund, or is there something that is going on with the finance 

agency that could expand opportunities for assisting would-be 

homeowners? 

Mr. KAROS. Madam Chairwoman, I cannot answer that question 

right now. But I will certainly get the answer back to you. 

We have a lady by the name of Mrs. Pat McMillan who takes 

care of the HOME Consortium and also the Development Fund. 

And she has done a fantastic job with spreading the dollars. She 

21 

sometimes gets $1.02 or $1.03 out of a dollar. She can certainly answer that. 

If she is permitted under the rules of the hearing, she is here 

now. If you would like for her to address that, we can. If not, I can 

answer it by e-mail or whatever. Is that permissible? 

Chairwoman WATERS. Yes. Certainly, if you would like, that is 

certainly permissible. 

Mr. KAROS. Ms. McMillan. 

I was always told a long time ago, surround your people with excellent help, and you don’t have to worry about a lot of things. And 

she is one of them. 

Chairwoman WATERS. That is true. That is very good. 

Ms. MCMILLAN. Thank you, Chairwoman Waters. 

Actually, we have not been in direct discussion on a housing 

trust fund. 

Mr. Rathbun can certainly attest to the lengthy effort and actually success in Statewide affordable housing trust fund being established for all of West Virginia. And I will certainly let Mr. Rathbun 

address that. 

We have not at this point looked for new—basically revenue 

streams or dedicated revenue streams for housing out of local resources. 

Chairwoman WATERS. Thank you. 

Yes, Mr. Rathbun. 

Mr. RATHBUN. We are very fortunate in the State. I think it was 

approximately 3 or 4 years ago that Ms. Skeens, who is in the 

room, and several of our advocates got our trust fund up and running in the State. They only forgot one thing, and that is the funding mechanism. It was up and running but no money. 

We are very pleased in the last session in the State that we are able to facilitate the money for that trust fund. We charge a $20 

fee on every real estate transaction in the State that goes directly 

to the housing trust fund. And we have donated, as the Housing 

Development Fund, some money to that fund also. 

We are also pleased to announce that with—I think she is in the 

room. She can raise her hand. Our new executive director, our very 

first executive director, and she has been on the job for about 3 

weeks, so I don’t know why she hasn’t accomplished much more. 

But she is here today. So we are moving forward with the housing 

trust. And we hope that will help facilitate affordability in the 

State. 

Chairwoman WATERS. That is very good. Thank you very much. 

Ms. Dodson, I don’t really have a question for you, except I saw 

Mrs. Capito taking down information that you were sharing. And 

I suspect that she will be talking further with you about what you 

discussed with us today, because it sounds as if you have come up 

with some very cost-effective ways by which to do some management here. And you are absolutely correct, in my estimation, if you 

have a complex that is located where the units are located in close 

proximity, you certainly ought to be able to take advantage of that. 

So I am going to leave that to Mrs. Capito to deal with. 

Mr. Ross, it sounds as if you are trying to take care of a lot of 

veterans without a lot of resources. That is a commendable thing 

that you are doing. I am very fortunate in my district to have the 

22 

U.S. VETS, and U.S. VETS is responsible for not only housing 

some of our veterans, but they, too, have substantial job training 

programs, and they are dealing with a lot of veterans who need a 

lot of care based on the experiences to which you alluded. 

So my question to you is, much of what is needed, I suppose, is 

responding to requests for a proposal or finding ways by which to 

reach out to make sure that you are accessing those dollars that 

are available through government and also through private 

sources. Do you have a foundation-type person who helps to write 

the proposals and go after the money? 

Mr. ROSS. Well, what I do have, I have a very close friend, whose 

name is Dr. Grove, and he has been assisting M.O.V.V. in every endeavor that we have had. And he pretty much has been a leader 

in helping us trying to get proposals together, applying for grants. 

Right now, with the assistance of the men we have in our organization, we are limited to certain things. You know, I am the president. And I am barely at the office. I am in the street with the 

homeless persons. So, you know, we are pretty much hands-on with 

the situation more or less than the business aspects. 

I have a CEO who is not here right now. He is in bad health. 

But if it pleases the hearing now, could I have Dr. Grove come up 

and give you more of an explanation of some of the issues? 

Chairwoman WATERS. Certainly, if you would like. We can hear 

from him for a few minutes. 

Would you state your name for the record for us, please. 

STATEMENT OF EDWARD GROVE, PASTOR, TRINITY UNITED 

METHODIST CHURCH; AND MEMBER, MEN OF VALOR AND 

VISION 

Mr. GROVE. My name is Dr. Edward Grove. I am the pastor of 

Trinity United Methodist Church here in Martinsburg, West Virginia and a part of the Men of Valor and Vision group and the Shalom Ministries Project out of which that program has developed. 

David is absolutely right. This has been a grassroots group. They 

have, by their very tenacity, pulled together money out of their own 

pockets and everybody that they can grab on the street to give 

them a nickel or a dime. They have done everything that they 

knew how to do to provide resources in a variety of ways. 

We are now developing for them a 501(c)3 nonprofit document so 

that they can become a part of that process and to open up some 

more channels in that regard for them to be able to access some 

of the dollars to which you allude. 

They are a group that has done extraordinary work in the area 

of being perhaps more hands-on than organizational, and it is that 

organizational piece that now needs some more attention and some 

work. 

Chairwoman WATERS. Well, thank you very much. That is very 

commendable. And I am very sure that there is a lot of help 

around. Establishing a 501(c)3 is extremely important to be able to 

receive money and to respond to requests for a proposal. So I certainly wish you well in doing that. 

Thank you very much. 

I will now yield to Mrs. Capito. 

Mrs. CAPITO. Thank you, Madam Chairwoman. 

23 

I want to thank all the folks who have brought forth some great 

issues. I want to start with the mayor. 

Thank you, Mayor, for your great words. 

You kind of had a little underpinning message there with some 

of the issues that you are finding, and that is the cost of energy. 

Of course, we have been debating energy, mostly gasoline price 

type of energy. But you talk about heating, home heating, and we 

know West Virginia has some pretty cold winters. 

What kind of help are we able to give now? I know we have 

LIHEAP and some other programs that we use to help people with 

their home heating issues if they can’t afford it. How do you keep 

a handle on that, I guess is my question, or how are you getting 

that feeling? What kind of feedback are you getting? 

Mr. KAROS. If I may, Madam, I would ask, again, Ms. McMillan 

to respond to that. I am sure if I do, I will miss something, and 

then I will be told about it later. 

Mrs. CAPITO. Okay. 

Mr. KAROS. With that being said, let me call Ms. McMillan back. 

Ms. MCMILLAN. We do have the Federal energy assistance available through the Department of Health and Human Resources, and 

our United Way has taken a lead, along with a number of—our 

Health and Human Services collaborative throughout the Eastern 

Panhandle to raise private donations to supplement the LIHEAP 

money that is available. I believe that in the past year they were 

able to raise about $39,000 to supplement this. 

But what you will hear from every helping organization in our 

collaborative is that they are out of funds by January to do utility 

supplements. And the national story is the story here. Fuel costs 

are up. That drives up the cost of food and just daily necessities, 

and we are just very concerned. 

I had a call from a veterans shelter operation the other day, and 

they said that their bill was $3,000 a month last winter, and they 

don’t know what they are going to do this winter, except maybe 

just close. And I don’t have the answer. We do have a volunteer 

effort here in Berkeley County raising close to $40,000 a year to 

supplement the Federal money. 

Mr. KAROS. I would like to add to that. 

Thank you, Ms. McMillan. 

Also, the City of Martinsburg has a policy in hand whereby, if 

someone cannot afford to pay a utility, such as water and sewer 

and garbage, some other things, I think our ordnance states, we 

will let that ride for ‘‘X’’ number of months. And we send notices 

and notices, and then we finally—by law, we have to cut that utility off. And that is another way the City has helped. But we don’t 

like to advertise that a lot because some people may somewhat 

take advantage of it, be somewhat delinquent when they shouldn’t 

be delinquent. 

Mrs. CAPITO. Thank you, Mayor. 

Another follow-up question. 

Madam Chairwoman, you might be interested to know that Martinsburg is the number-one fastest-growing city, I believe, in the 

State. 

Is that correct? 

Mr. KAROS. That is correct. 

24 

Mrs. CAPITO. And with that comes some issues. But I am wondering, with the slowdown in the real estate market, and the rise 

in energy costs, are you seeing—I know you can’t monitor that day 

to day. But do you anticipate that is going to be a slowdown? Or 

have you even contemplated that? 

Mr. KAROS. We have talked about in the City Hall Finance Department, we have seen a decline in building permits which in turn 

means a decline in income for the City of Martinsburg. I cannot answer. Something that has really bothered me, the economy is so 

bad, everything goes up, but yet people are still building homes, regardless of whether it is in West Virginia, anywhere you go across 

this country. And I just don’t know how they are doing it, why they 

are doing it if the market is so bad. 

Mrs. CAPITO. Well, I think that certainly you see that every day. 

I am a frequent visitor to the Eastern Panhandle, but even coming 

monthly, if I drive down a different street, it is like, whoa, there 

is another set of new homes. And perhaps that is catching up with 

the Eastern Panhandle. I was talking with some Realtors and 

home builders last night. There are more vacancies. There are 

more houses on the market than there had been historically 

through the last several years. And that is why you are seeing a 

slowdown in the prices and that. 

I was just wondering kind—I don’t even know that there is an 

answer to this—whether the population growth can continue when 

everything is sort of stagnating, although our property prices still 

are lower significantly than they are in other areas. 

Mr. KAROS. For what it is worth, I talked to an investor just yesterday morning over breakfast. He acts as a bridge loan between 

the bank or whomever, and he said, ‘‘I have not had any business 

for at least 35 days.’’ He is a very detailed individual; he marks 

down everything. And he said, ‘‘It has finally hit Berkeley County.’’ 

Mrs. CAPITO. I would like to ask Catherine a question, because 

you were in stark contrast to what Mr. Bernardi—and this is what 

I am going to take back to Mr. Bernardi. And we have had this discussion in Congress, you know, as a one-size-fits-all approach for 

a large public housing authority and smaller ones. I mean, economies of scale, obviously, I mean, good sense tells you there is no 

way that all the requirements of a large one should be foisted down 

on the smaller housing authority. And so I will carry your message 

back. And when he answered that question like that, we already 

knew that you disagreed with him. So I wanted to say, wait a 

minute. 

But I wanted you to get your testimony in front of us to make 

sure that we knew that. I want to ask about the waiting list because we hear this quite a bit, that there are very, very long waiting lists. The properties I toured this morning, I toured two properties that were built by low-income tax credits. I asked, how do 

you get your new tenants? And it kind of surprised me that they 

didn’t say they pick them right up off the waiting list, because they 

said the waiting list gets stale sometimes because people can’t wait 

on a list to find some place to live. Hopefully, they found a place 

at some point. 

How long do they remain on the waiting list? What kind of follow-through do you—and I know you are a small place, and you 

25 

can’t keep recalling people. But do you find the waiting list is an 

accurate reflection of people who are waiting? Or are they waiting 

to move to better housing or more affordable housing? How do you 

see your waiting list in terms of a true reflection of people—how 

do you interpret it, I guess? I don’t want to put words in your 

mouth. 

Ms. DODSON. Our waiting lists are pretty accurate. They are required to call every 60 days to let us know they are still interested. 

For public housing, we tell them it could be 6 months or longer. 

Sometimes they are not interested once they move. There is a possibility that where they are staying, a lot of them are staying with 

other people, or they are staying where they can’t really afford it. 

So once you offer them something, they may still be wanting to 

move. Section 8 list, they wait however long it takes. They either 

want the assistance where they are at now, or they will find someplace else that will— 

Mrs. CAPITO. That is a longer list, the Section 8? 

Ms. DODSON. Yes. It takes longer because the public housing people move in and out of—you know, they find something else, they 

move out. So we get a vacancy rate. On a Section 8, they can use 

it wherever they want to move. If they want to relocate, they can 

take the assistance with them, so unless their income goes up or 

they violate the program, they don’t come off the list as often. 

Therefore, they keep their assistance for years and years. 

Mrs. CAPITO. Okay. Thanks. 

Mr. Rathbun, some of the problems in the subprime market that 

we heard a lot about were loans that were given to people that had 

no documentation as to their income. They had no downpayment. 

They had no escrow for their taxes or insurance. And I guess, as 

you look at it from the long view, now that this—we are seeing 

what is happening, they had the adjustable rate mortgages, you 

kind of say to yourself, why wasn’t anybody at least asking for documentation of their income? 

You mentioned that all of the financing that you do requires documentation. Have you ever had any experience with any of these 

kind of provisions that have led us into a troubled area? 

Mr. RATHBUN. We are very fortunate in the State that we have— 

the State as a whole, we talk about the list, that we are proud of 

being at the bottom of. We are actually at the very bottom or very 

close to the bottom of loans in the predatory lending category. I 

think we rank 45th or 47th in that category. We did not buy into, 

as a State, the predatory loans with the low-docs. 

Ironically, the States right around us, Virginia housing, Maryland housing, to get their first-time home buyers affordable, they 

had to go to the interest-only type loans, the low-doc loans. It was 

a challenge that they took on very reluctantly. We were able to 

dodge that bullet. 

So it is very difficult to assess how we get got there. I think I 

read an article several years ago that said there is everybody to 

blame, and there is nobody to blame. You have the large mortgage 

companies who started the low-doc, no-doc type loan, and it spread 

to the GSEs that had to keep suit. And they expanded their underwriting to expanded underwriting with ratios of 60 percent, which 

is a debt ratio that we analyze, got much more liberal than we 

26 

probably should have during those years. And now we see the results of that. 

So to answer your question, I think there are a lot of factors and 

a lot of partnerships that can take blame in what has happened. 

Mrs. CAPITO. Well, I would like to say, in West Virginia, and we 

have quite a few lenders in the room, and folks who deal in this 

area every single day, and that is the beauty of a place like West 

Virginia. We are community bankers. We are community Realtors. 

We are community brokers, and a lot of times, if we don’t know 

you, we know somebody who knows you or somebody who went to 

school with your child or whatever. And so we have that, and we 

want to keep that, and I think that is probably what has kept us 

at the lower end of this scale in terms of the predatory lender or 

the subprime lending. 

So I am proud of the fact that we are—and that, I think, is why 

we are so low on the foreclosure list. So I think that is kind of a 

contributing factor as well. And we want to keep that. We want to 

keep that going. 

Mr. Ross, thank you for your testimony and for what you are 

doing. We have heard through some of the testimony, I think Mr. 

Bernardi talked about—I can’t remember which one it was—the 

VASH, the Veterans Homeless Assistance. I think that when your 

organization grows and you get your certifications, this is something that we have tried to address as a Congress, homelessness 

for our veterans. Actually, one of our colleagues from Texas had a 

bill before Congress—oh, gosh—2 weeks ago to ask for a coordinator between HUD and the VA, because what happens a lot—and 

I think everybody can identify with this—you get caught between 

the cross-hairs of two different Federal agencies, and sometimes 

you get lost. 

And so I know you are helping a lot of lost people, but I think 

as this moves on, what you are doing is really going to play into 

where some of these programs are going to go. And I am glad you 

are there. And anything we can do to help you, you know, keep 

your organization going and moving in the right direction, we want 

to do that. 

So I appreciate your testimony today. 

Mr. ROSS. Thank you very much. 

Mrs. CAPITO. I wanted to ask another question. 

I think maybe Mr. Rathbun might answer this. As part of the 

housing bill that we passed last week—I don’t know about you, but 

when I first came to Congress, I heard about Fannie Mae and 

Freddie Mac, and I thought, who are they? Do I know them? It is 

a very complicated financing system, and I think that a lot of people feel sort of removed from whether the stability of Fannie Mae 

and Freddie Mac is really going to influence their lives? Is that 

really going to help them? And if you could kind of bring it down 

to the street level to say why the financial stability of these two 

organizations is extremely important and what we did to shore 

them up is going to help everybody’s mortgage and everybody getting the next mortgage and their kids being able to get the next 

mortgage and all that. 

Mr. RATHBUN. That is a very good question, because you can’t ignore somebody that owns one out of every two loans in the Nation. 

27 

And if you allow that conduit, who has financed all those loans, go 

under, the whole financial situation could collapse very rapidly. So 

it is very, very important what the bill did. And through our State 

Housing Agencies Association, I am glad we put our input into that 

and that you did pass it. It is very important that these two entities stay very healthy. 

And to bring it down to the grassroots, what you saw with the 

GSEs is the tightening of credit. It is just like any other private 

company; when foreclosures or losses start to mount, you tighten 

the new business. So what they did was tighten the new business 

coming through, raise credit score criteria, raise downpayment criteria back to where it was before, and what that caused is a snowballing effect between people being able to get new credit while 

maintaining. So the bill that shores up the stop gap for the GSEs 

is very, very important for the stability of every new buyer in the 

Nation. 

And your question is very well taken because a lot of people don’t 

realize that. 

Mr. DONALD HOKE. A suggestion on that, Fannie Mae and 

Freddie Mac, they ought to go after those bonuses they paid themselves. That would build a lot of free, low-income housing. 

Chairwoman WATERS. If I may just add to this, because I know 

a lot of people are concerned. There is a lot of reform that is also 

built into this legislation. We are going to have a new agency that 

is going to oversee the GSEs, Fannie and Freddie. 

And we also do a number of other things. We will be lending 

money if we have to or investing from the Treasury, but we will 

be first in line to be repaid, and we won’t allow them to pay any 

dividends until we are taken care of. And we also go after the big 

salaries and the bonuses. So I think you are going to be happy with 

this. 

Mr. DONALD HOKE. Amen, sister. 

Chairwoman WATERS. Thank you. 

Mrs. CAPITO. Thank you. 

I yield back. 

Chairwoman WATERS. Thank you very much. 

I would like to thank the Berkeley County Commission and Mr. 

Steve Teufel for allowing us to be here today. 

I would also like to thank Mrs. Capito for inviting me here. One 

of the good things about being subcommittee Chair or Chair of a 

committee is you get to move around and see America. 

This is the first time I have been to West Virginia, and I am just 

delighted to be here. 

And Mr. Mayor, you talk about your needs. Mr. Ross said that 

this is a friendly place, so people are going to keep coming. And 

you can be proud of that, even though it means that you have got 

to have more resources to deal with it. 

But I am very pleased that you invited me here today. 

And to Mrs. Capito, I hope that this hearing has helped to give 

you additional insight into areas that you perhaps will be even 

more active in. 

And having said that, there may be additional questions that we 

may have for this panel and for the first panel. If so, we will submit them in writing. So, without objection, the hearing record will 

28 

remain open for 30 days for either of us to submit written questions to any of these witnesses and to place their responses in the 

record. 

Let me just say that if there are any written statements that you 

may have in addition that need to be submitted, without objection, 

we will do that at this time. 

And if you would like to make a closing statement, please do. 

Mrs. CAPITO. I would like to thank the president of the commission, Steve Teufel. I have written myself four notes to thank him. 

He brought to my attention the Eastern Panhandle Home Consortium and I think the mayor mentioned, and I think the one 

thing that becomes clearer every time I visit, but today for Chairwoman Waters, is that we live in a community that helps one another. And if you listen to the thread that goes through everybody’s 

testimony, and as I look at the faces of the folks in the audience, 

we work together quite a bit. And this is through the whole spectrum of housing in the Eastern Panhandle. We have unique challenges here, separate and apart from what is going on in the rest 

of the State. 

And I didn’t get a chance to correct Mr. Bernardi. I feel like I 

am picking on him. But I saw all the eyebrows go up when he said 

the largest housing authority that handles everything in the Panhandle is from Charleston. That is like saying, everything in your 

district is handled in San Francisco. That is like death. So we will 

correct him for the record. 

But I want to thank you, again, Chairwoman Waters. 

I thank all of you all for being here, and I just appreciate it. 

Thank you. 

Chairwoman WATERS. Thank you. 

We are on our way back. We have votes this evening, and a lot 

of work to do. But it has been a delight and a pleasure to be here, 

and this hearing is now adjourned. 

Thank you. 

[Whereupon, at 12:56 p.m., the hearing was adjourned.] 

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