A GSE (government-sponsored enterprise) bill that would establish a new affordable housing fund, but limit nonprofits' rights to engage in, or affiliate with organizations that engage in, nonpartisan voter registration or lobbying activities, is racing ahead to a floor vote in the House. The Federal Housing Finance Reform Act, H.R. 1461, a bill that would increase regulation of federal mortgage entities, will likely come to the floor by Oct. 28, despite a provision, that will be offered on the floor in the form of a manager's amendment, that would disqualify nonprofits from receiving affordable housing grants if they have engaged in voter registration and other nonpartisan voter activities, lobbying, or produced electioneering communications. Organizations applying for the funds would be barred from participating in such activities up to 12 months prior to their application, and during the period of the grant even if they use non-federal funds to pay for them. Most troubling, affiliation with an entity that has engaged in any of the restricted activities would also disqualify a nonprofit from receiving affordable housing funds under the bill. The sponsors of the bill, Financial Services Committee Chairman Michael Oxley (R-OH) and Rep. Richard Baker (R-LA) reached an agreement with members of the conservative Republican Study Committee (RSC), , to reduce the size and duration of the Affordable Housing Fund (AHF) created in the bill and to address the RSC's advocacy and voter registration concerns. Neither Oxley's office nor the RSC has released the language of the anti-advocacy provision despite repeated requests. However, newly obtained draft language reveals that AHF grant applicants, "other than for-profit entities," are required to have "affordable housing" as their primary purpose. It restricts the use of grant funds to supporting affordable housing activities. Most troubling, the draft disqualifies grant recipients if, for the preceding 12 months prior to applying for the funds, and throughout the grant period, the organization:

• Engages in "Federal election activity" as defined by the Federal Election Campaign Act of 1971 (FECA) (2 U.S.C. 431 (20)). This includes voter registration, voter identification, get-out-the-vote, or other nonpartisan voter participation activities;
• Publicly promotes, supports, attacks or opposes a candidate for Federal office in a broadcast 60 days before a general election or 30 days before a primary election;
• Lobbies, except if the group is a 501(c)(3) organization lobbying within permissible limits.

Affiliation with any entity that engages in any of the above activities during the same period - 12 months before applying for a grant or throughout the grant period - will also disqualify the organization from receiving AHF monies. However, the "affiliation" definition contained within the discussion draft has not been disclosed and could have much more extensive implications - including, for example, participation in coalitions or even board membership by staff at another organization. Nonprofit groups, led by the housing community, have rallied against the provisions. In a letter to House Speaker Dennis Hastert (R-IL), the United States Conference of Catholic Bishops wrote, "[P]roposals that would inhibit recipients from engaging in voter registration and lobbying activities with their own funds during the period they are utilizing affordable housing funds would force Catholic agencies to choose between participating in Affordable Housing Fund programs or engaging in constitutionally protected voter registration and lobbying activities with their own funds." The legislation, which would create a more powerful regulator for Fannie Mae, Freddie Mac and the Federal Home Loan Banks, passed the House Financial Services Committee in May on a 65-5 vote. The legislation has stalled, however, because of RSC concerns that the Affordable Housing Fund provision would be used to "finance third- party advocacy groups that have agendas far beyond simply increasing affordable housing for low-income Americans." According to a House Republican aide, the RSC's 100-plus members plan on voting for the GSE bill, even though many members have broader concerns about the legislation. "The [restriction on] election activities was the big provision conservatives were looking for," a Republican aide toldCongress Daily. Oxley and Baker have also reached an agreement with House Republican leadership to bring the bill to the floor by the end of the month. Rules Chairman David Drier (R-CA) is currently working to schedule a vote on the measure. However, the prospects of Senate passage this year are slim, in part because of opposition to the AHF provision by Senate Banking, Housing and Urban Affairs Committee Chairman Richard Shelby (R-AL). The Senate version, S. 190, passed out of committee on July 28 by a party-line vote of 11-9 without an affordable housing provision. Shelby reportedly has "deep concerns" about affordable housing programs and "believes there are better mechanisms" than the AHF contained in the House version. OMB Watch has created a Resource Center for information on the anti-advocacy provision in the GSE bill, where concerned individuals will find a summary and ways to take action.