It was announced on Thursday, December 11, 2015 that the National Housing Trust Fund will receive funding.
The Federal Housing Finance Agency has ordered that the funding stream tied to the volume of business through Fannie Mae & Freddie Mac will begin to flow in FY 2015. This will provide a permanent dedicated revenue stream for the NHTF that will be distributed to states on an annual basis to develop housing opportunities that are affordable to Extremely Low Income people. Despite some earlier speculation, it appears that the funding stream is not retroactive.
The NHTF was established in July 2008 as part of the Housing and Economic Recovery Act of 2008 (HERA). This law required that Fannie Mae and Freddie Mac pay 4.2 basis points of their annual volume of business to the two funds. The NHTF was to receive 65% and the remaining 35% was to go the Capital Magnet Fund (CMF). Unfortunately, the requirement that Fannie Mae and Freddie Mac contribute to the two funds was suspended when the companies were taken into conservatorship in September 2008 at the height of the housing crisis. With the lifting of the suspension now, the first funds are expected to be allocated in early 2016.
The Trust Fund will provide block grants to the states, at least 90% of which must be used for the protection, preservation, rehabilitation, or operation of rental housing. No less than 75% of the funds for rental housing will benefit extremely low income households with the rest benefiting those with very low incomes. Up to 10% of Trust Fund resources may be used for homeownership activities for people with very low incomes.