Again this year, President Barack Obama has included $1 billion for the National Housing Trust Fund (NHTF) in his annual budget that he submitted to Congress on March 4 (see article below). The request is again for mandatory funding subject to an offset, but no offset is identified in the budget. Also, it is presented as one time funding, not an annual amount.
Contrary to speculation that circulated on the day the budget was released and one erroneous report in the press, the budget does not identify contributions from Fannie Mae and Freddie Mac as the source of revenue for the NHTF. The budget document does say that the assessment on Fannie and Freddie is the source of revenue in the statute that created the NHTF in 2008, but goes on to say that the Federal Housing Finance Agency has suspended the contributions “indefinitely.”
The decision to lift the suspension rests with FHFA Director Mel Watt. NLIHC and others have urged Mr. Watt to do so (see Memo, 1/24). NLIHC estimates that Fannie and Freddie together owe $761 million to the NHTF as of the fourth quarter of 2013.
At a budget briefing held for HUD stakeholders on March 4, HUD Secretary Shaun Donovan said the $1 billion for the NHTF in the President’s budget was a “down payment.” He expressed optimism about funding for the NHTF in legislation to wind down and replace Fannie and Freddie that is being drafted by Senate Banking Committee Chair Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID). NLIHC is seeking maximum support for the NHTF in that bill of at least $2.5 billion (see Memo, 11/7).
HUD estimates that $1 billion would create 16,000 affordable units for extremely low and very low income households.