Rules Set for Disbursement of Affordable Housing Funds
When Federal Housing Finance Agency Director Melvin L. Watts testified before the House Financial Services Committee early this week he said that FHFA had notified Fannie Mae and Freddie Mac that it was reversing suspension of contributions to affordable housing funds which the GSEs were required to make prior to being placed in conservatorship. The suspension was authorized by the Housing and Economic Recovery Act (HERA) in 2008.
On Friday the Department of Housing and Urban Development (HUD) clarified how those funds would be used with publication in the Federal Register of an interim program rule for the National Housing Trust Fund (HTF). HTF is a new production program designed to work with other existing programs to increase and preserve the supply of decent, clean and safe affordable housing for extremely low- and very low-income households, including homeless families. The rule provides guidance to states and state-designated entities which are eligible grantees of HTF on the program's implementation.
Annual formula grants will be awarded by HUD to eligible agencies and can be used for either new construction, acquisition, reconstruction, rehabilitation, or preservation of affordable housing. A minimum of 80 percent of a grant must be used for rental housing and a maximum of 10 percent can be used for homeownership and for reasonable administrative and planning costs. All HTF-assisted units will be required to have a minimum affordability period of 30 years.
HUD said that over the next year states should begin to solicit input from their constituents, develop HTF Allocation Plans and submit these plans to HUD along with their 2016 Annual Acton Plans. Grantees should receive their HTF allocations by summer 2016.
HUD Secretary Julian Castro said, "Affordable housing is about opportunity. Once fully implemented, the Housing Trust Fund will help folks across the nation secure a decent place to call home. We look forward to working closely with our partners across the nation to implement this critical resource to expand the circle of opportunity for current and future generations of Americans."
More detailed information about the HTF is available here.