The NHTF is a new affordable housing production program that complements existing programs with the intent of preserving and increasing the nation’s supply of affordable rental housing for low income households, according to HUD. Contributions by Fannie Mae and Freddie Mac will capitalize the NHTF, and HUD will administer the fund.
“Today, we offer another tool to help states confront a growing affordable rental housing crisis in this country,” HUD Secretary Julián Castro said. “The Housing Trust Fund will be an enduring resource designed to producing more housing that is affordable to our most vulnerable neighbors.”
The Housing and Trust Fund was created in 2008 out of the Housing and Economic Recovery Act (HERA) and it was to be capitalized by Fannie Mae and Freddie Mac. But the Federal Housing Finance Agency (FHFA), which took the GSEs into conservatorship in September 2008, suspended the allocation of GSE money to the Housing Trust Fund in November 2008 before any allocations were made.
In December 2014, FHFA Director Mel Watt lifted the suspension of GSE allocations to the Housing Trust Fund, a move that drew harsh criticism from some Republican lawmakers who believed it was wrong to allocate GSE money to the trust fund while the GSEs remain in conservatorship and taxpayers are on the hook. Rep. Ed Royce (R-California) even introduced legislation in January 2015 to try and prevent the allocations.
“In today’s housing market, many Americans who work hard still can’t afford their rents. Affordable housing helps workers live closer to their jobs and spend more time with their families. A healthy housing market is key to vibrant communities and future economic growth, and these federal funds will help states expand the supply of affordable homes and strengthen our communities,” said Senator Jack Reed (D-Rhode Island), who wrote the 2008 law establishing the National Housing Trust Fund. “I commend HUD for making these funds available and helping states take a tailored, cost-effective approach to increasing the supply of affordable housing.”
Each state is allocated a minimum of $3 million by law, and state affordable housing planners will use the funds for eligible activities that include:
- Real property acquisition
- Site improvements and development hard costs
- Related soft costs
- Financing costs
- Relocation assistance
- Operating cost assistance for rental housing (up to 30 percent of each grant)
- Reasonable administrative and planning costs
“Today is a historic day for millions of Americans who struggle to find affordable housing,” Diane Yentel, President and CEO of the National Low Income Housing Coalition. “We applaud Secretary Castro for his leadership in paving the way to make the National Housing Trust Fund a reality. We look forward to working with the administration and our state partners as we put these dollars to work building affordable homes for the lowest income people.”
Click here for a list how much money was allocated to each state.