Getting to Know the National Housing Trust Fund Law and Regulations
Explore the National Housing Trust Fund (NHTF) in just five easy digestible pieces. Ed Gramlich, Senior Advisor with the National Low Income Housing Coalition, will help you to navigate the regulations behind the National Housing Trust Fund. This five-part series will explain why the National Housing Trust Fund is necessary; explore why the focus is on extremely low income renters; provide detailed information on how the funds will be distributed to states; describe how the funds can be used; and demonstrate how a portion of the National Housing Trust Fund can be used for affordable homeownership.
For more information, visit nlihc.org/issues/nhtf.
To view the entire series on YouTube,
Part 1: Introduction and Background
The National Housing Trust Fund (NHTF) is a new source of federal money intended to build, rehab, preserve, and operate affordable rental housing for households with extremely low incomes. Part 1 of this five-part series provides data about the need for the NHTF. It will then explore how the funds are generated and will begin to flow starting in 2016.
Part 2: NHTF Focused on Extremely Low Income Renters
The National Housing Trust Fund (NHTF) law targets the funds to rental housing for households with income less than 30% of the area median income (for example, $20,550 for a three-person household in Chicago). A formula spelled out in law will be used to distribute NHTF dollars to states. Seventy-five percent of the formula’s weight is given to two factors representing renters with extremely low income. The statute requires 90% of a state’s NHTF to be used to build, rehab, or preserve renter housing – at least 75% of which must benefit extremely low income households.
Part 3: How Will NHTF Be Distributed Within States?
Key action around the National Housing Trust Fund (NHTF) will take place each year when the state drafts its required Allocation Plan. Advocates should use the required public participation process to shape their state’s NHTF Allocation Plan, suggesting criteria that should be used to award funds to projects. Urge one of the criteria to favor projects that charge rents that do not make extremely low income households spend more than 30% of their income for rent and utilities. Also urge the state to require homes be affordable for a long time, at least 50 years.
Part 4: How Can NHTF Money Be Used?
The National Housing Trust Fund (NHTF) is a housing production program intended to add to the stock of rental housing affordable to extremely low income households. Therefore, NHTF can only be used to buy, build, rehab, preserve, or operate primarily (90%) rental housing. NHTF assistance can be loans, deferred payment loans, even grants. Learn about the variety of eligible project costs that NHTF can pay for. Unique among HUD programs, NHTF can be used to provide operating cost assistance and to provide for an upfront operating cost assistance reserve to help a project remain financially healthy for at least 30 years.
Part 5: Using NHTF for Homeowners
The law limits to 10%, the amount of a state’s National Housing Trust Fund (NHTF) allocation that can be used for homeowner activities. NHTF can be used to build, rehab, or preserve housing for homeownership. It can also include helping homeowners with down payment or closing cost assistance. NHTF can be used to buy and/or rehabilitate manufactured housing too.