The Federal Housing Finance Agency (FHFA) has given the green light to Fannie Mae & Freddie Mac to set aside money for funding much-needed affordable housing projects, saying both mortgage entities are financially fit to contribute to the National Housing Trust Fund and the Capital Magnet Fund.
Under the passionate leadership of the National Low Income Housing Coalition (NLIHC), and with the full backing of CSH and other advocates for affordable housing, Congress created the Trust Fund more than 6 years ago. But the financial crisis prevented Fannie Mae and Freddie Mac from contributing until now. As a result, the promise of the Trust Fund to create more affordable housing across the country has not yet been realized.
Undaunted by the obstacles created by the most recent economic recession, NLIHC never lost sight of its primary goal of ensuring that one day the National Housing Trust Fund would receive and then distribute dollars to help create affordable housing in every state.
CSH congratulates NLIHC and is excited to see concrete steps are being taken to guarantee a stable source of funding will now flow to the National Housing Trust Fund as well as the Capital Magnet Fund.
The Trust Fund is not the panacea of affordable housing financing. There will remain a strong and fundamental need for additional housing choice vouchers and more rental aid to ensure our most vulnerable neighbors who struggle with housing costs are housed. Nonetheless, this important action by FHFA, Fannie Mae & Freddie Mac is one that all embracing the creation of affordable housing can cheer.
CSH, which is a Community Development Financial Institution (CDFI), will have the ability to pursue funding opportunities through the Capital Magnet Fund, established to help CDFIs and nonprofit housing organizations leverage private funds to finance their affordable housing activities.
Advocates estimate the contributions by Fannie Mae and Freddie Mac will generate anywhere between $300-$500 million annually starting January 1, 2015, which will be split by formula between the National Housing Trust Fund and Capital Magnet Fund.
The US Department of Housing and Urban Development has drafted proposed regulations to disburse the monies collected and will move to finalize them as soon as possible.