On July 9, the National Low Income Housing Coalition, along with three individual plaintiffs and the Right to the City Alliance, filed a lawsuit against the Acting Director of the Federal Housing Finance Agency Edward DeMarco for failing to uphold Fannie Mae and Freddie Mac’s statutory obligations to make contributions to the National Housing Trust Fund.
When the National Housing Trust Fund was established in the Housing and Economic Recovery (HERA) Act of 2008, the identified source of dedicated funding was contributions from Fannie Mae and Freddie Mac. The law requires that Fannie Mae and Freddie Mac transfer a portion of the value of their new business to the National Housing Trust Fund. The financial crisis of 2008 hit and the companies’ regulator, the Federal Housing Finance Agency, temporarily suspended this requirement. Fannie Mae and Freddie Mac were taken into conservatorship.
Fannie Mae and Freddie Mac have been highly profitable for six consecutive quarters and the conditions that warranted the suspension no longer apply. The 2012 Securities and Exchange Commission’s filings show that new business activity for Fannie Mae and Freddie Mac in 2012 was approximately $1.4 trillion. Thus in 2012, approximately $382 million of that amount should have gone to the National Housing Trust Fund.
NLIHC called upon Mr. DeMarco to lift the suspension, which he has not done (see Memo, 4/19). Therefore, the Board of Directors of the National Low Income Housing Coalition voted to join in this lawsuit on behalf of NLIHC’s many low income members who need safe, decent, and affordable homes. NLIHC and the other plaintiffs are represented by former NLIHC board member Charles Elsesser and Florida Legal Services.
Learn more about the lawsuit at: www.nlihc.org/issues/nhtf/lawsuit
Read the July 9 Wall Street Journal article on the lawsuit: http://on.wsj.com/14Go8cY