Rules Set for Disbursement of Affordable Housing Funds

When Federal Housing Finance Agency Director Melvin L. Wattsrntestified before the House Financial Services Committee early this week he saidrnthat FHFA had notified Fannie Mae and Freddie Mac that it was reversingrnsuspension of contributions to affordable housing funds which the GSEs werernrequired to make prior to being placed in conservatorship.  The suspension was authorized by the Housingrnand Economic Recovery Act (HERA) in 2008.   </p

OnrnFriday the Department of Housing and Urban Development (HUD) clarified howrnthose funds would be used with publication in the Federal Register of an interim program rule for the NationalrnHousing Trust Fund (HTF). HTF is a new production program designed to work withrnother existing programs to increase and preserve the supply of decent, cleanrnand safe affordable housing for extremelyrnlow- and very low-income households, including homeless families.  The rule provides guidance to states and state-designated entitiesrnwhich are eligible grantees of HTF on the program’s implementation.  </p

Annual formula grants will be awarded by HUD to eligible agencies and can be used for either new construction, acquisition,rnreconstruction, rehabilitation, or preservation of affordable housing.  A minimum of 80 percent of a grant must bernused for rental housing and a maximum of 10 percent can be used forrnhomeownership and for reasonable administrative and planning costs. AllrnHTF-assisted units will be required to have a minimum affordability period ofrn30 years. </p

HUD said that over the next year statesrnshould begin to solicit input from their constituents, develop HTF AllocationrnPlans and submit these plans to HUD along with their 2016 Annual Acton Plans.  Grantees should receive their HTF allocationsrnby summer 2016. </p

HUD Secretary Julian Castro said, “Affordablernhousing is about opportunity.  Once fully implemented, the Housing TrustrnFund will help folks across the nation secure a decent place to callrnhome.  We look forward to working closely with our partners across thernnation to implement this critical resource to expand the circle of opportunityrnfor current and future generations of Americans.” </p

More detailedrninformation about the HTF is available here.

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