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NACEDA Policy Paper:

Housing Trust Fund - March 2009

NACEDA Role and Policy Position

NACEDA pledges to support its national partners to secure at least the $1 billion in dedicated funding for the National Housing Trust Fund (NHTF) that is part of President Obama's budget request. NACEDA will also support its national partners to secure additional dedicated sources of funding to bring the total funding for the NHTF to at least $5 billion year.

Background

The National Housing Trust Fund, signed into law as part of the Housing and Economic Recovery Act of 2008 (P.L. 110-289), will provide communities with funds to build, rehabilitate, preserve and operate housing for people with the lowest incomes and will be the first new federal housing production program to serve extremely low income families since 1974. The initial funding for the NHTF from Fannie Mae and Freddie Mac has been temporarily suspended due to the GSEs financial troubles. Securing a new funding source immediately is a priority.

What is the National Housing Trust Fund?

• It is a permanent federal housing program with dedicated sources of funding not subject to annual appropriations process.
• At least 75% of the funds will be for housing for households that are extremely low income, earning less than 30% of the area's median income, with the rest of the funds going to households below 50% of median income, very low income.
• The NHTF can be used for rental housing and homeownership. At least 90% of the funds must be used for production, preservation, rehabilitation or operation of rental housing. Up to 10% can be used for homeownership activities, but everyone served must have incomes at or below 50% of area median income.

What is next?

• HUD will develop regulations to implement the NHTF by July 30, 2009.
• Each state must designate a state agency to administer the program.
• The administering agency must develop, with public input, a state allocation plan.
• The state must develop performance goals, timetables and benchmarks for carrying out the purposes of the NHTF.
• The state can use up to 10% of its grant amount to administer the program.
• The state has two years to either commit or use its funds or they returned to HUD.

NACEDA Member Priorities

• Funding for the NHTF is needed to create additional flexible subsidy for housing. Between 1976 and 2004, housing assistance from all federal programs decreased by 48 percent, adjusted for inflation.
• This bill is critical for our members whose mission is to house extremely low income households. " Additional housing vouchers are critical for our members to take full advantage of the NHTF.

For more information go to: http://www.nlihc.org/doc/FAQ-NHTF.pdf

For additional information, please contact Jane DeMarines at jdemarines@naceda.org or (703)741-0144. Website: http://www.naceda.org