MHP will soon be in a better position to advance the mission of the United for Homes campaign to fund the National Housing Trust Fund, thanks to a grant from the National Low Income Housing Coalition.
United for Homes is an advocacy campaign comprised of 1,095 national, state and local non-profit and for-profit organizations, ranging from housing advocates to developers, faith communities to unions. All of these organizations have a unified goal of funding the National Housing Trust Fund (NHTF), once and for all.
United for Homes is hopeful that reform of the Mortgage Interest Deduction (MID) could be an effective vehicle for funding the NHTF. MHP has been busy garnishing support for this potentially powerful and effective way of ensuring safe, decent, and affordable homes for thousands of low-income families.
What is the National Housing Trust Fund?
The NHTF was established in 2008 as a provision of the Housing and Economic Recovery Act as a means to expand, preserve, rehabilitate, and maintain the supply of rental housing affordable to America's poorest families. The NHTF was intended to be funded by Freddie Mac and Fannie Mae, but after the two were taken over in 2008 during the financial crisis, the NHTF was left sitting empty. Freddie Mac and Fannie Mae are now making record profits, but unfortunately the NHTF still remains unfunded. Even if it were funded by Freddie and Fannie at the amount approved by Congress, additional funding is needed to address the serious affordable housing shortage facing the lowest-income families across the country.
Who would benefit from the NHTF?
The NHTF is a program that is dedicated to the families that need it the most.
According to the statute, at least 75% of the NHTF funds for rental housing must benefit extremely low income (ELI) households (up to 30% of the area medium income) or households with incomes below the federal poverty line, and all funds must benefit very low income (VLI) households (between 30-50% of the area median income).
HUD goes one step further and proposed a regulation that would require that, for the first year, 100% of both rental and homeowner units be occupied by ELI households. The proposed rule would also give HUD the authority to devote more than 75% of NHTF funds to ELI households in future years.
How will the NHTF funds be used?
According to the statute, at least 90% of the funds must be used for the production, preservation, rehabilitation, or operation of rental housing, and up to 10% can be used for homeownership activities for first-time homebuyers, including production, down payment, closing cost, and interest rate buy-down assistance.
What is being done to fund the NHTF?
United for Homes is seeking several avenues to fund the NHTF.
Perhaps the most appealing answer to fund the NHTF is through tax reform, specifically the MID. Rep. Keith Ellison (D-MN) introduced a bill, H.R. 1213, that would reform the MID and use billions in savings created through reform to fund several housing programs, including the NHTF. H.R. 1213 now has 8 co-sponsors!
1. Freddie Mac and Fannie Mae: Now that Freddie and Fannie are making profits, United for Homes is strongly encouraging the two to direct revenues to the NHTF, as required by law.
2. Budget: United for Homes is working to get dedicated revenue to the NHTF through the federal budget process. President Obama, in his 2014 budget proposal, requested $1 billion to fund the NHTF.
As a recipient of a National Low Income Housing Coalition grant to carry out the United for Homes activities, MHP will amp up its efforts even more and engage housing, community, and political leaders to garnish support for the funding of the NHTF, particularly through Rep. Ellison's bill, H.R. 1213.
MHP looks forward to engaging with organizations across the state in a unified effort to ensure that our lowest-income households can finally find safe, decent, and affordable housing.
What can you do?
If you are interested in getting involved in our efforts to fund the NHTF, please join U4H and endorse Rep. Ellison's bill.