The National Housing Conference [1] (NHC) along with its coalition members submitted a letter to Acting Director Joseph Otting on Monday, urging the Federal Housing Finance Agency (FHFA) to continue allocations to the Capital Magnet Fund (CMF) and the National Housing Trust Fund (HTF) in 2019 and beyond.
The CMF is a program created in the Housing and Economic Recovery Act of 2008 (HERA), administered by the Treasury Department, and is open to community development financial institutions and non-profit housing organizations like Habitat for Humanity. Its purpose is to develop, preserve, rehabilitate, or purchase affordable housing, as well as related economic development activities such as day care centers, community health clinics, and workforce development centers.
According to the letter, the CMF provided funding for non-profit developers and lenders to do pre-development work, create revolving loan funds, establish loan loss reserves, and provide loan guarantees—all critical pieces of affordable housing and community development. So far the CMF has received four rounds of funding totaling $434 million, which has or will help to attract $13.5 billion in other capital into these projects.
In the first three years of HTF, $659.8 million has been allocated to states. Because the HTF is
administered as a block grant, each state has the flexibility to decide how to best use HTF
resources to address its most pressing housing needs. Most states have chosen to use their HTF investment to build and preserve affordable rental housing for extremely low-income veterans, seniors, people with disabilities or special needs, and people experiencing homelessness.
The letter stated “These programs are effective tools in creating affordable housing supply and are funded by a de minimis fee on new business, currently 4.2 basis points, and not through federal appropriations. They have broad bipartisan support and failure to continue to fund them will result in an even greater need for government spending to address the shortage of affordable housing in the future.”
Read the letter sent by NHC and its coalition members here [2].