The U.S. Department of Housing and Urban Development (HUD) has provided guidance for state and local entities for implementation of the National Housing Trust Fund (HTF) in the form of an interim program rule published in the Federal Register, according to an announcement from HUD.
The HTF was established a part of the Housing and Economic Recovery Act (HERA) in 2008 in order to complement efforts from federal, state, and local entities in assisting extremely low- and very low-income households, including homeless families, with finding safe, clean, affordable housing. Funding was suspended for the HTF shortly after it was established due to the government takeover of Fannie Mae and Freddie Mac.
In December, Federal Housing Finance Agency Director (FHFA) Director Mel Watt lifted the suspension of the allocation of GSE funds for the HTF – a controversial move given the fact that the GSEs remain under the conservatorship of the FHFA. While the decision to reinstate funding of the HTF using GSE money was heavily criticized by conservatives – some of whom introduced legislation last week to try to prevent it – it was widely heralded by progressives as a path for low-income families to achieve the dream of homeownership.
"Affordable housing is about opportunity. Today’s action is the latest step toward important progress for the American people," HUD Secretary Julián Castro said on the day the suspension of funding was lifted. "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."
According to HUD's announcement, eligible grantees for HTF include states and state-designated entities. Eighty percent of the annual formula grants must be used for rental housing, 10 percent must go to homeownership, and 10 percent must go to cover reasonable administrative and planning costs assumed by the grantee. States will submit their HTF Allocation Plans, developed with input from constituents, and 2016 Annual Action Plans to HUD sometime in 2015.
The target date for the grantees to receive their HTF allocations is the summer of 2016. Some of the eligible activities and expenses for the use of HTF funds may include: Real property acquisition, site improvements/development hard costs, related soft costs, demolition, financing costs, relocation assistance, and operating cost assistance for rental housing.