The volume of business for Fannie Mae and Freddie Mac, the two housing government sponsored enterprises (GSEs), for the first two quarters of 2015 was significantly higher than originally estimated by the Administration in setting the FY16 budget for the National Housing Trust Fund (NHFT) and the Capital Magnet Fund (CMF).
NLIHC has received an unofficial new estimate for the NHTF from the Department of Treasury of $196 million, based on annualizing the volume of business for 2015 using the first two quarters. This is considerably higher than the estimate of $120 million that was in the President’s FY16 budget proposal. The new estimate for the CMF is $106 million, up from $64 million.
The Housing and Economic Recovery Act of 2008 (HERA), which established the NHTF and CMF, requires the GSEs to contribute 4.2 basis points of their volume of business each year to support the two funds. The requirement was suspended in November 2008 after the GSEs were taken into conservatorship during the financial disaster caused by the foreclosure crisis. Federal Housing Finance Agency Director Mel Watt lifted the suspension on December 11, 2014 (see Memo, 12/15/14). HERA also requires that the first 25% of the total go to the Hope for Homeowners Reserve Fund, which is expected to be needed for the first year only.
For more information about the NHTF, go to www.nhtf.org.