The advocacy and persistence of the National Low Income Housing Coalition (NLIHC) has paid off. Last week, the Federal Housing Finance Agency (FHFA) gave 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.
Because of the passionate leadership of the NLIHC, with the full backing of CSH and other advocates for affordable housing, Congress created the Trust Fund more than six years ago. But the financial crisis prevented Fannie Mae and Freddie Mac from contributing monies until now. As a result, the promise to create more affordable housing across the country was delayed.
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 Trust Fund would receive and then distribute dollars to help create affordable housing in every state.
We congratulate NLIHC and are excited to see concrete steps guaranteeing a stable source of funding to support the National Housing Trust Fund as well as the Capital Magnet Fund.
The Trust Fund is not the panacea. It will go a very long way, providing funds for bricks and mortar, creating more affordable housing for thousands of Americans, but the operational and service side so vital to affordable housing will continue to rely on other federal programs.
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. We must be vigilant and continue to press Congress and the Administration for action on these items.
Most importantly, our elected officials cannot be lulled into the false impression the Trust Fund comprehensively addresses the needs or allows for funding offsets in other vital affordable housing programs.
We also must monitor the ongoing discussions in Washington DC concerning the future of Fannie Mae & Freddie Mac so that the National Housing Trust Fund and Capital Magnet Fund are always protected and linked to stable funding.
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. We intend to pursue partnerships that will allow us to appeal for these resources to help create more supportive housing throughout the nation.
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.