6. National Housing Trust Fund Traction
After the announcement by Federal Housing Finance Agency chair Mel Watt in December 2014 that the National Housing Trust Fund finally would be funded, the program saw traction as well as some controversy during 2015.
Originally created under the Housing and Economic Recovery Act of 2008 and to be supported by Fannie Mae and Freddie Mac, the payments were suspended when the government-sponsored enterprises (GSEs) were placed in conservatorship. But Watt’s decision lifted that suspension and directed the GSEs to start setting aside funds for the NHTF as well as the Capital Magnet Fund.
In January, HUD jumped right out of the gate with guidance for state and local entities for implementing the trust fund.
States and state-designated entities are eligible grantees for the new funding. Annual formula grants will be made, of which at least 80% must be used for rental housing; up to 10% for homeownership; and up to 10% for the grantee’s reasonable administrative and planning costs.
The funds may be used for the production or preservation of affordable housing through the acquisition, new construction, reconstruction, and/or rehabilitation of non-luxury housing with suitable amenities. All NHTF-assisted units will be required to have a minimum affordability period of 30 years.
But it wasn’t all smooth sailing. The fiscal 2016 spending plan from the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies called for diverting the funding aimed for the NHTF to the HOME program and prohibited other sources being used to capitalize the trust fund.
However, the NHTF prevailed in the end. The omnibus spending bill released on Dec. 16 did not raid any funds from the trust fund, which will deliver its first resources to states in 2016.
“We applaud Congress for not raiding the National Housing Trust Fund and for making modest increases to other key affordable housing programs,” said Sheila Crowley, president and CEO of the National Low Income Housing Coalition (NLIHC). “However, many more resources are needed to fight the monumental challenges of homelessness and the lack of decent, available and affordable housing for the lowest income people in America.”