On July 21, 78 members of the House of Representatives sent a letter to Mel Watt, Director of the Federal Housing Finance Agency (FHFA), urging him to lift the suspension of payments by Fannie Mae and Freddie Mac to the National Housing Trust Fund (NHTF) and Capital Magnet Fund (CMF). Representative Keith Ellison (D-MN) spearheaded the letter.
The initial dedicated source of funding for the NHTF and the CMF was an assessment on the volume of business of Fannie Mae and Freddie Mac. However, their obligation to fund the NHTF and CMF was temporarily suspended shortly after the programs were authorized in July 2008, due to the potential financial instability at Fannie Mae and Freddie Mac in the midst of the fall 2008 financial crisis. Even though financial markets have since stabilized and Fannie Mae and Freddie Mac have been profitable since 2012, payments remain suspended.
In the letter, the House signatories wrote, “We urge you to lift this temporary suspension and begin to follow the intent of Congress by contributing to the National Housing Trust Fund and the Capital Magnet Fund. The need for affordable rental housing and job and business investment in disadvantaged communities has only grown since the Great Recession…We respectfully request that you review this matter soon and respond to our request.”
When Director Watt’s predecessor, Edward DeMarco refused to lift the suspension, NLIHC and others filed suit in July 2013 against the FHFA Director, then Mr. DeMarco, for his failure to do so (see Memo, 7/12/13). The lawsuit is still pending. Advocates and Members of Congress are hopeful that Director Watt will take a different position on the matter.
The letter is at: http://nlihc.org/sites/default/files/CMF_letter_to_Mel_Watt.pdf