National Housing Trust Fund: Fannie, Freddie to Transfer Funds in March
Note: this update is from the National Low Income Housing Coalition. For more information, please visit their website: http://nlihc.org/issues/nhtf.
Just prior to the start of 2015, Federal Housing Finance Agency Director Mel Watt lifted the temporary suspension on the 4.2 basis point assessment on the new business of Fannie Mae and Freddie Mac designated for the National Housing Trust Fund. With Fannie Mae and Freddie Mac required to set aside funds for the NHTF beginning on January 1, 2015, HUD published the long-awaited regulations implementing the NHTF on January 30 (proposed regulations were published on October 29, 2010).
Reaction from NHTF opponents in Congress was swift, but the NHTF campaign managed to fend off all attempts to raid the NHTF or otherwise prevent HUD from implementing it. We open 2016 with a clear path forward to implementation.
Funds set aside for the NHTF will be transferred by Fannie Mae and Freddie Mac 60 days after January 1, 2016. HUD will use the statutory formula to determine how much of those funds to transfer to each state, the District of Columbia, and the territories (grantees), and then publish a notice in the Federal Register. NLIHC’s unofficial estimate is that the total NHTF allocation will be around $200 million.
[Please take note: state affordable housing/homeless advocates should ensure their state has officially designated the entity to receive NHTF allocation. You can check this out at: https://www.hudexchange.info/programs/htf/grantees. If your state is not on this list, you are encouraged to prod your state to send in their letter to HUD soon.]
Once that notice is published, the grantees will begin the formal process of engaging the public and preparing their NHTF Allocation Plans. HUD is supposed to issue sub-regulatory implementation guidance regarding the Allocation Plan, maximum per-unit subsidy, and use of NHTF resources for operating assistance in the spring. Grantees will submit their Allocation Plans to HUD.
HUD Secretary Julián Castro has stated he wants to be able to distribute the funds during the summer of 2106, setting a tight timetable for advocates to influence their states’ Allocation Plans.
Meanwhile, NLIHC continues to work on other more robust sources of funding for the NHTF through housing finance reform and mortgage interest deduction reform. In housing finance reform legislation, the goal is to make sure that the NHTF is protected and well-funded in whatever housing finance reform legislation eventually emerges. While there have been a few bills introduced to reform the government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, only one offers a comprehensive proposal for reform. No hearings held in either chamber in 2015 to discuss reform measures.