LISC CEO Maurice A. Jones and Diane Yentel, CEO of the National Low Income Housing Coalition, make the imperative case for two key housing programs in an op-ed for Affordable Housing Finance. As a new nominee is poised to take charge of the Federal Housing Finance Agency, they write, we must absolutely safeguard the Housing Trust Fund and the Capital Magnet Fund, which have provided essential support for affordable housing creation in the midst of the affordability crisis.
The below op-ed was originally published on Affordable Housing Finance:
A Call for FHFA to Support Vital Housing Programs
President Trump’s nominee for director of the Federal Housing Finance Agency (FHFA), Dr. Mark Calabria, goes before the Senate Banking Committee on Thursday for a confirmation hearing at a time when our country is in the grips of a severe housing crisis. There is a national shortage of over 7 million affordable homes for our country’s poorest seniors, people with disabilities, families with children, and others. The shortage is pervasive, impacting rural, suburban, and urban communities alike. For every 100 lowest-income households, there are only 35 affordable and available homes. Federal investment in affordable housing has not kept pace with demand.
While our nation is underinvesting in housing assistance, communities have made progress in utilizing resources from two of the newest federal affordable housing programs. The national Housing Trust Fund (HTF) and Capital Magnet Fund (CMF) were born out of the 2008 financial crisis and authorized through the Housing and Economic Recovery Act(HERA), which was signed into law by President George Bush. Both programs are funded through a dedicated source, a small assessment on the volume of new business for Fannie Mae and Freddie Mac, and provide housing and community development resources for the nation’s low-income and underserved populations, including America’s lowest-income seniors, people with disabilities, and families with children. To date, $660 million have been allocated to the HTF and $434 million have been provided to the CMF.
The Housing Trust Fundis the first new federal housing resource in a generation exclusively targeted to build and preserve homes affordable to people with the lowest incomes, those with the greatest and clearest needs. The program is administered by the Department of Housing and Urban Development (HUD) as a block grant, giving each state flexibility to decide how to best use HTF resources to address its most pressing housing needs. Recent analysis by the National Low Income Housing Coalition shows that with the first round of $174 million in HTF dollars, 43 states have helped build or preserve over 1,500 assisted homes. States are using their HTF resources to build and preserve homes for people experiencing homelessness, people with disabilities, elderly people, and other underserved populations.
The Capital Magnet Fund, administered by the Department of the Treasury, provides competitive grants to high-performing nonprofit housing developers and community development financial institutions to finance and develop housing affordable for low- and moderate-income households, community facilities, and economic development projects near affordable housing. The CMF provides funding that nonprofit developers and mission-based lenders cannot find elsewhere—funding to do pre-development work, create revolving loan funds, establish loan loss reserves, and provide loan guarantees. CMF awardees are required to leverage their award by at least 10 times the award amount.
So how does this relate to Dr. Calabria’s nomination as FHFA director? The FHFA is responsible for the oversight of Fannie Mae and Freddie Mac, and the administration is considering halting payments to the HTF and CMF programs. We will be listening to Dr. Calabria’s testimony for assurance that he will support continued funding for the HTF and CMF. We will also closely monitor whether FHFA Acting Director Joseph Otting sends HTF and CMF funding to HUD and Treasury this month, as required by law.
If FHFA attempted to suspend funding for the CMF and HTF, the long-term viability of these programs would be put at risk, making it harder for America’s most vulnerable families to access the affordable homes they need to avoid homelessness and thrive. Our organizations urge FHFA and the administration to follow Congress’s mandate to send HTF and CMF resources to HUD and Treasury, so communities across the country can continue to utilize these programs to tackle our nation’s most critical affordable housing challenges.