About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 How the Housing Trust Fund and Capital Magnet Fund Support Affordable Housing 1 (November 21, 2022)

handle is hein.congrec/hwthsgts0001 and id is 1 raw text is: he Housing Trust Fund (HTF), managed by the Department of Housing and Urban Development (HUD), and the Capital Magnet Fund (CMF), managed by the Department of the Treasury, provide grants to increase and preserve the supply of affordable rental housing and to increase home- ownership for low-income households. The funds are financed through fees paid by Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs), on new mortgage guarantees that they make. The Funds' Receipts and Grants. By the end of 2021, payments to the funds since their inception totaled $2.7 billion for the HTF and $1.5 billion for the CMF. In fiscal year 2021, grants of about $690 million were allocated from the HTF and grants of $336 million were awarded from the CMF. Only a small portion of those grants was disbursed in 2021. Grants from the funds are made to entities responsible for producing and maintaining housing for low-income renters or homeowners. To receive the grants, developers must meet certain eligibility and affordability requirements for the qualifying properties. Budgetary Impact. Allocating money received by Fannie Mae and Freddie Mac to use for affordable housing is a cost to the federal government because those two entities are effectively part of the government, in the Congressional Budget Office's assessment. Although payments made by Fannie Mae and Freddie Mac to the funds do not increase the GSEs' potential liability from their mortgage guarantees (because they are not taking on any more risk), they reduce the net income of the enterprises and result in budget outlays. Production of Low-Income Units. As of October 3, 2022, projects funded with nearly $317 million in HTF grants have produced 2,989 completed rental units. As of the end of fiscal year 2021, $168 million of CMF funds had been spent on completed projects that have produced nearly 21,000 rental units and 4,200 owner-occupied properties. - Effectiveness. Measuring the effectiveness of the grants made from the HTF and CMF in relation to other federal activities that create or preserve affordable housing is difficult. Those comparisons must take into account several factors, including the type of subsidy offered by the program: Some programs (including the HTF and CMF) offer subsidies that are designed to spur production of new housing units; others provide subsidies that spur demand for them by increasing the purchasing power of renters and homeowners. Payments to the Funds and Grants From the Funds The federal government supports housing for low-income households through a number of programs, including the Housing Trust Fund and the Capital Magnet Fund. The HTF provides grants to states to increase and preserve the supply of rental housing and homeownership oppor- tunities for low-income families. The CMF provides grants to community development financial institutions (CDFIs)-financial institutions that focus on economi- cally disadvantaged communities-and nonprofit housing organizations to finance loans and to capitalize funds that support affordable housing. Both funds were established by the Housing and Economic Recovery Act of 2008 (HERA). They are financed through an up-front fee of 4.2 basis points (or 0.042 percent) on the principal balance of new mortgage Notes: Unless this report indicates otherwise, all years referred to are calendar years. Numbers in the text and tables may not add up to totals because of rounding.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most