The creation of a National Housing Trust Fund with a dedicated funding source is an important step in addressing the housing crisis affecting the poorest in our country, denying them their human right to a decent, affordable place to call home.  Nationwide there are only 6.2 million homes with rents that are affordable for the 9 million extremely low-income renters, those earning less than 30 percent of an area’s median income.  This translates into a shortage of 2.8 million homes.
Rep Barney Frank (D-MA), who chairs the Financial Services Committee, introduced the bipartisan bill, the National Affordable Housing Trust Fund Act of 2007 (H.R. 2895).  The goal of the bill is to provide 1.5 million additional units of housing over the next 10 years for low- and extremely low-income families to address the shortfall of housing most acute for these populations.  Nonprofits, faith-based organizations and other entities with demonstrated experience will be eligible to use money from the Trust Fund to construct, rehabilitate, and preserve housing units.  The money can also be used for down payments for first-time low-income homebuyers.  At least 75 percent of the funds will be for housing for extremely low-income families.  The Bush Administration and some Republicans in Congress oppose the Trust Fund.

Trust Fund monies will not be subject to the annual appropriations process, but rather will initially come from two dedicated funding sources, the mortgage finance companies Fannie Mae and Freddie Mac, and HUD’s Federal Housing Administration (FHA), which insures eligible home buyers.  Legislation to funnel money from these sources into the Trust Fund is moving forward in the House.  In May, a bill passed Rep. Frank’s committee that increases the number of reverse mortgages in the FHA portfolio.  This is expected to generate more surplus funding, some of which will go into an Affordable Housing Fund instead of remaining in the Treasury Department.  Also in May, H.R. 1427, which overwhelmingly passed the House with bipartisan support, directs a small portion of the investment portfolios of Fannie Mae and Freddie Mac into an Affordable Housing Fund.  Money from these affordable housing funds will ultimately be channeled into the Trust Fund.  Estimates are that these two sources would generate nearly $1 billion a year for the Trust Fund.  The first year, all of the funds will be directed to the Gulf Coast to help rebuild low-income housing destroyed in the 2005 hurricanes.  Thereafter, HUD will distribute the funds as grants through a formula based on factors including need. The National Housing Trust Fund Campaign of over 5,600 organizations will look for more funding sources to reach its goal of $5 billion a year.

The Trust Fund is a source of hope for those in desperate need of safe, affordable, and decent housing: children in low-income families for whom stable housing is a key element to their health and ability to learn, working adults for whom a home is essential for finding and keeping jobs to support their families, people with disabilities, and low-income seniors on fixed incomes.  Currently there are over 600 housing trust funds established by state and local governments which have proven to be a successful approach to funding affordable housing programs.

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