NLIHC President and CEO Sheila Crowley testified before the Senate Committee on Banking, Housing, and Urban Affairs on November 7 at a hearing, “Housing Finance Reform: Essential Elements to Provide Affordable Options for Housing.” Discussion in the hearing largely focused on the National Housing Trust Fund (NHTF) with many Senators expressing support for the NHTF to address the shortage of affordable housing. Senator Bob Corker (R-TN), co-author of the S.1217, the Housing Finance Reform and Taxpayer Protection Act of 2013 that includes the NHTF, said “at the end of the day, the reality is that a bill that passes the Senate will likely fund the Housing Trust Fund.”A concern raised about the NHTF had to do with the degree and nature of oversight it would have. Ms. Crowley assured the Senators that the National Housing Trust Fund campaign welcomes Congressional oversight of the program. In a response to a question from Committee Ranking Member Mike Crapo (R-ID), Crowley said, “there is no one who wants more accountability for the National Housing Trust Fund in this country than me.” Responding to a similar question from Senator Corker, she reiterated the accountability provisions for the NHTF that are already in place in the Housing and Economic Recovery Act of 2008 (HERA) through which the NHHT was enacted.One of the four witnesses, Douglas Holtz-Eakin, President of the American Action Forum, argued that any funding for the NHTF should go through the appropriations process, and should be subject to review to make sure the program is meeting its funding objectives. Mr. Holtz-Eakin suggested that many “non-effective programs could be eliminated and funding could go to the housing trust fund.” Senator Crapo asked Ms. Crowley whether she thought the NHTF should go through the appropriations process and whether it would be an appropriate mechanism for oversight. Ms. Crowley emphasized that NHTF dollars must be used to increase the supply for affordable housing, and added “If we thought that the appropriations process worked, which we don’t, we wouldn’t be having this conversation… instead we are losing ground in existing housing programs.” Senator Crapo responded, “I assure you that you are not the only one who thinks the appropriations process needs to be fixed.” Senator Jack Reed (D-RI) added, “As an appropriator, I concur.”Senator Jon Tester (D-MT) asked about the importance of a dedicated funding stream for affordable housing as is provided in S.1217. Mr. Holtz-Eakin said a dedicated stream is better than the ups and downs of the appropriations process because it is allows for better planning. Senator Corker asked how to ensure that if the NHTF was funded through a dedicated funding stream it would have with proper oversight. Ms. Crowley said that the NHTF is intended to be a permanent fund on the mandatory side of the budget and suggested that models for managing dedicated funding streams for housing could be found by looking at state and local housing trust funds.A line of questioning about the use of the NHTF in Indian Country was initiated by Committee Chair Tim Johnson (D-SD), who asked Ms. Crowley how the NHTF could help tribes and address housing needs on tribal lands. Ms. Crowley talked about the NHTF would produce rental housing for the poorest people and could be used by tribes who would have to apply to their states for funding. She added that NLIHC would support a tribal set-aside for NHTF dollars. She told Senator Johnson that she had toured the Pine Ridge Reservation with NLIHC Board Member Pinky Clifford of the Oglala Sioux Tribe Partnership for Housing and had seen the extraordinary housing conditions there. Senator Johnson said that he “knows Pinky well.”Senator Heidi Heitkamp (D-ND) thanked Ms. Crowley for her attention to the housing needs on Native American reservations, and asked her how the Low Income Housing Tax Credit (LIHTC) program works on reservations. Ms. Crowley responded the LIHTC program has not reached Indian Country very well, in part because people on the reservations are often too poor to afford LIHTC rents without other subsidies. Senator Heitkamp added that developers also may not be willing to work in Indian Country. Senator Reed asked Ms. Crowley, “If we deploy this money, how much of the [housing] gap would we fill?” Ms. Crowley thanked Senator Reed for his leadership in championing the NHTF and responded “we think this is a way to get started.” He also asked Ethan Handelman of the National Housing Conference about the Capital Magnet Fund (CMF) (also part of HERA) and how effective the CMF was in the one year it was funded. Mr. Handelman responded the CMF the CMF had a leverage ratio of 10:1.Senator Mike Johanns (R-NE) said he sees a real urgency for completing housing finance reform. He stressed the importance of the effort being bipartisan, and said that everyone on the Committee has compromised to meet this goal. He told Ms. Crowley that his experience with affordable housing is that it is “one of the most complex endeavors you could imagine.” He went to say that if he were a governor when the NHTF was funded, he would bring all housing stakeholders together, examine where gaps could be filled, and see if the NHTF could be used as bridge money to ensure affordable housing projects could work. Ms. Crowley said this is exactly the way the NHTF should work, and said the “beauty of the structure of the NHTF is that money goes to governors who can figure out how to best use the money in the housing markets in their own states.” Ms. Crowley added the NHTF could be coupled with LIHTC to make some units in LIHTC properties affordable to extremely low income people. Senators Kay Hagan (D-NC) and Mark Warner (D-VA) also expressed concern about the shortage of affordable housing in their states, and stated their support for the NHTF. Senator Elizabeth Warren (D-MA) brought up the affordable housing goals for Fannie Mae and Freddie Mac, and rejected the narrative that the goals caused the housing crisis. Senator Warren said the goals have helped millions of families purchase homes and asked witness Hilary Shelton of the NAACP if the goals were eliminated, what the impact on homeowners in minority neighborhoods would be. Mr. Shelton responded “it would be devastating.” Senator Warren asked Ms. Crowley what the impact of the elimination of the goals would be rural communities. Ms. Crowley responded “rural communities are where lenders are not likely to go unless there is an incentive to go there.” Senator Warren noted that the funding provided for affordable housing purposes in S. 1217 is not intended to be a replacement for the affordable housing goals.In addition to Ms. Crowley, Mr. Holtz-Eakin, Mr. Handelman, and Mr. Shelton, Rick Judson of the National Association of Home Builders also testified.The hearing was the second hearing held by the Committee on housing finance reform during the week of November 4. On November 5, the Committee held a hearing “Housing Finance Reform: Protecting Small Lender Access to the Secondary Mortgage Market.” Watch an archived webcast of the November 5 hearing and read all witness testimony at: http://1.usa.gov/1bgvpUE Watch an archived webcast of the November 7 hearing and read all witness testimony at: http://1.usa.gov/1axczEt Sheila Crowley’s complete testimony is available at: http://bit.ly/17aZRez NLIHC’s press release on the hearing is available at: http://nlihc.org/press/releases/2961