Gaining funding for the National Housing Trust Fund (NHTF) advanced on several fronts in 2013. Here is a brief review.
NLIHC launched the United for Homes campaign in 2013 with the goal of gaining significant funding for the NHTF through changes to the mortgage interest deduction (MID). In March, Representative Keith Ellison (D-MN) introduced H.R. 1213, the Common Sense Housing Investment Act of 2013, which includes the campaign proposal for MID reform and would use the revenue raised to fund the NHTF, as well LIHTCs, Section 8, and the Public Housing Capital Fund. The United for Homes campaign endorsed H.R. 1213. At the end of 2013, ten Members of Congress have co-sponsored H.R. 1213.
The campaign tracked and commented on tax reform legislation being developed by both the Senate Finance Committee and the House Ways and Means Committee. By late fall, it was clear that neither committee would be taking up comprehensive tax reform legislation in 2013, and potential for legislation in 2014 is limited given that it is an election year. Unknown as of this writing is what will happen with the sudden change in leadership of the Senate Finance Committee. Long time lead Democrat on the Finance Committee Senator Max Baucus (D-MT) will resign his seat if he is confirmed as the next ambassador to China. Senator Ron Wyden (R-OR) is expected to become the new chair of the Senate Finance Committee. Nonetheless, tax reform is on the horizon and the United for Homes campaign will continue to make its case in Congress and prepare for tax reform in the 114th Congress.
At year’s end, the campaign has gained 1,434 endorsements. In 36 states, there is at least one endorsement in every Congressional District; 85% of all Congressional District have one or more endorsements. The first order of business for the United for Homes field team in 2014 will be to get endorsements in all 435 districts.
Meanwhile, the opportunity to achieve some revenue for the NHTF from Fannie Mae and Freddie Mac surfaced again in 2013. After three years of needing infusions from the Federal Treasury, both companies began making profits in 2012. NLIHC asserted that the conditions under which the requirement that the companies support the NHTF was suspended in 2008 no longer apply and requested the Federal Housing Finance Agency (FHFA) lift the suspension. Unfortunately, the Acting Director of FHFA declined to do so. In July, NLIHC, the Right to the City Alliance, and three individual plaintiffs filed suit against FHFA to compel the Director to begin the payments to the NHTF.
Then, President Barack Obama nominated Representative Mel Watt (D-NC) to become the new FHFA Director. After a bruising Senate confirmation battle, which included an historic change to Senate filibuster rules, Mr. Watt was confirmed on December 10 and is expected to be sworn in on January 6. NHTF advocates are cautiously optimistic that Mr. Watt will have a more favorable view of NLIHC’s and numerous others’ position on funding the NHTF now.
Finally, legislation emerged in 2013 to reform housing finance policy. The House bill, H.R.2767, would eliminate Fannie Mae and Freddie Mac and privatize the housing finance system. The bill also eliminates the NHTF. It was voted out of the House Financial Services Committee in July, but has not been taken up in the full House.
On the Senate side, S. 1217, was introduced by Senators Mark Warner (D-VA) and Bob Corker (R-TN) in June. It would wind down Fannie and Freddie, create a new federal mortgage insurance entity (Federal Mortgage Insurance Corporation), and assess a fee on all mortgage backed securities covered by the new federal guarantee. The funds raised by this fee would be used to fund the NHTF, the Capital Magnet Fund, and a program, the Market Access Fund. NLIHC is pleased that the bill protects the NHTF, but is of the opinion that the bill underfunds the NHTF.
Over the fall, Senate Banking Committee Chair Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) held several hearings on the full range of issues related to housing finance reform with the intent of introducing a bipartisan bill by year’s end. That target has now slipped to early 2014. NLIHC has advocated for and hopes to see the NHTF protected and robustly funded in the Johnson-Crapo bill.
Work on the NHTF in 2014 will include:
- Advocating for immediate funding for the NHTF by the FHFA.
- Urging HUD to get the NHTF rule out as soon as possible.
- Preparing state and local advocates for NHTF implementation in their states.
- Assuring the NHTF is protected in any housing reform legislation, the funds raised by the new fees on transactions are maximized, and the NHTF receives at least half of the new funds.
- Continuing to expand public support for changes to the mortgage interest deduction and using the revenue raised for affordable housing, including the NHTF, and preparing for comprehensive tax reform in 2015.
To endorse the United for Homes campaign, go to: www.unitedforhomes.org/support
To see the congressional districts still needing endorsements, go to: http://bit.ly/IIq669
To read NLIHC’s analysis of the proposed NHTF regulations, go to: http://nlihc.org/issues/nhtf/regs