Representing NLIHC and the Right to the City Alliance, Attorney Charles Elsesser of Florida Legal Services sent a letter to Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco demanding that FHFA make contributions to the National Housing Trust Fund (NHTF) immediately, as required by the Housing and Economic Recovery Act of 2008 (HERA). The letter, sent on April 15, states, “your continuing failure to [make contributions] is a direct violation of the terms of the Act, results in the loss of many hundreds of millions of dollars dedicated by Congress to those most in need of housing and must cease immediately.”
HERA required that the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac transfer a portion of 0.042% of their new business to the NHTF. However, Fannie Mae and Freddie Mac were taken into conservatorship after the law was enacted, and their regulator, FHFA temporarily suspended contributions, as allowed under the statute.
The statute allows the contributions to be temporarily suspended if the allocations to the NHTF:
- Are contributing or would contribute to the financial instability of the enterprise;
- Are causing or would cause the enterprise to be classified as undercapitalized; or
- Are preventing or would prevent the enterprise from successfully completing a capital restoration plan under Section 1369C.
Mr. Elsesser says in the letter that the 2012 Securities and Exchange Commission’s (SEC’s) filings show both GSEs were profitable in that year and consequently, the conditions for the suspension no longer apply, the suspension should end immediately and “all suspended payments since, at a minimum, the first quarter of 2012” should be applied to the NHTF.
NLIHC President and CEO Sheila Crowley said in a press release that “ending the shortage of housing affordable for the lowest income people in our country ought to be a national priority. By bringing the GSEs into compliance with their statutory obligation to fund the National Housing Trust Fund, Mr. DeMarco can begin to address this longstanding and under-recognized problem. Implementing the National Housing Trust is overdue.”
Click here for the full text of the letter.
Click here to view the press release.