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  THE LOW INCOME & URBAN HOUSING BLOG  

Saturday, July 13, 2013

U.S. Government Refusing To Pay $380 Million Debt to Low Income Housing Fund

Low Income Housing Government Money

With cities everywhere struggling to increase affordable housing for low-income families, every dollar helps, especially in large metropolitan areas where affordable housing is in a state of crises. Well, how about another $380 million? That is the amount that is owed to the National Housing Trust Fund, the organization established by President Bush in 2008 to help produce more rental housing for extremely low-income families.

Where The Money Is Coming From

Here is how the funding works: The National Housing Trust Fund requires public government-sponsored mortgage corporations Fannie Mae and Freddie Mac to contribute to the fund each year in the amount of 0.0042 percent of each year's new revenues. However, with the mortgage crises of 2008, and the federal government takeover, the contributions were put on hold and Fannie Mae and Freddie Mac are under the direction of the Federal Home Finance Agency (FHFA).

How Another $380 Million Could Help With Affordable Housing

The National Low Income Housing Coalition, dedicated to finding affordable, descent homes for America's low-income families, is suing FHFA for the $380 million that Freddie Mac and Fannie Mae owe to the National Housing Trust Fund. How much will $380 million buy? Well, earlier this year in California, for example, an increase of funding from the Local Housing Trust Fund (LTHF) of $8 million, plus another $5 million in private funding, will build over 380 low-income housing units and provide assistance to first time home buyers. The math shows that the $380 million owed to the fund should increase low-income housing by another 9,000 units.

Government Intervention Overkill?

It is interesting that such a paradox has developed in an area of national crises affecting millions of needy families. The federal government established the National Housing Trust Fund, which government-sponsored mortgage corporations are supposed to contribute to, which then came under the control of another government agency, the Federal Home Finance Agency. Is this an oversight, or perhaps an example of government intervention overkill?


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