HUD Releases Interim Regulations for the National Housing Trust Fund
News: HUD released the interim regulations for the administration of the National Housing Trust Fund (NHTF) that are expected to be distributed in early 2016. As mention in an earlier PLACE story, FHFA has decided to lift the suspension on Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac to pay fees into to fund the NHTF that targets the creation of very low income housing units and the Capital Magnet Fund (CMF) which supports CDFI investment in housing. The amount of funding for the two programs will be determined by the volume of the business conducted by Fannie and Freddie in calendar year 2015.
Context: In December, FHFA announced that they will begin payment into the NHTF in 2015 for distribution on 2016. The amount available will depend on the amount of business the GSEs do in 2015 but estimates range from $245 to $385 million. From the total amount of available funds, the first 25% will be used to fund a reserve account for HUD’s Hope for Homeowners program. The remaining 75% of funds will be distributed to NHTF (65%) and to CMF (35%). It is still controversial and there is a significant political constituency that feels that the fees should not be paid and, rather, should be kept as a reserve to avoid future bailouts and Fannie and Freddie. Thus, letting your Representative or Senator on how the resource could support you work is still very important
The rule writing for NHTF is the responsibility of HUD and on January 30th they came out with the interim rule. Essentially, the NHTF will be modeled after the HOME regulations. HUD’s intent is to have NHTF regs to be consistent with HOME regulations and so a number of definitions such as extended affirmative marketing, displacement and relocation, conflict of interest text, and modified property standards text are simply imported from the final HOME rule. If you are familiar with HOME regs NHTF will look very similar.
The National Low Income Housing Coalition is following this process and providing updates as the NHTF progresses toward implementation. They publish resource materials about the NHTF on their website and also publish weekly updates for NHLIC members that provides real time information on policy development. These can be accessed at: http://nlihc.org/issues/nhtf.
Effect on Practitioners: As stated earlier, the funding of the NHTF is a welcome addition to the affordable housing world in an environment of dwindling federal allocations to HOME and CDBG. What is now clear that NHTF will look and feel a lot like HOME funding – with the main difference being a much greater emphasis on housing for very low income families. The focus on how funds will be invested locally will follow state guidelines. An estimate of how much allocated by state can be found at this link: http://nlihc.org/sites/default/files/StateAllocations_0115.pdf.