CONTACT: Christine Campbell
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The National Low Income Housing Coalition (NLIHC) commends the decision by Mel Watt, Director of the Federal Housing Finance Agency, to lift the suspension on Fannie Mae and Freddie Mac’s obligation to fund the National Housing Trust Fund (NHTF) and the Capital Magnet Fund. Finally, the National Housing Trust Fund will have resources to begin expanding the housing supply for the lowest income and most vulnerable people in our country, providing a major boost to efforts to end homelessness and housing poverty in the United States.
“After eight years of advocacy to get the National Housing Trust Fund established and another six years to secure a sustainable funding source, we are thrilled that states will begin receiving critical new resources to expand the supply of rental housing for people with extremely low incomes,” said Sheila Crowley, President and CEO of NLIHC. “The decision by Mr. Watt that will result in the first funds for the National Housing Trust Fund is a great victory for the thousands of housing and homeless advocates who have worked tirelessly to establish the NHTF. More importantly, it is a victory for the people we strive to serve.”
The NHTF was established in July 2008 as part of the Housing and Economic Recovery Act of 2008 (HERA). This law required that Fannie Mae and Freddie Mac pay 4.2 basis points of their annual volume of business to the two funds. The NHTF was to receive 65% and the remaining 35% was to go the Capital Magnet Fund (CMF). Unfortunately, the requirement that Fannie Mae and Freddie Mac contribute to the two funds was suspended when the companies were taken into conservatorship in September 2008 at the height of the housing crisis. With the lifting of the suspension now, the first funds are expected to be allocated in early 2016.
The Trust Fund will provide block grants to the states, at least 90% of which must be used for the preservation, rehabilitation, or operation of rental housing. No less than 75% of the funds for rental housing will benefit extremely low income households with the rest benefiting those with very low incomes. Up to 10% of Trust Fund resources may be used for homeownership activities for people with very low incomes.
Dr. Crowley is available for further comment.