WASHINGTON, D.C. – March 28, 2014 – (RealEstateRama) — The National Low Income Housing Coalition applauds Representative Maxine Waters (D-CA) for her support of the National Housing Trust Fund in her bill, the “Housing Opportunities Move the Economy Forward Act of 2014 (HOME Forward),” which she released in discussion draft today. Ms. Waters is the Ranking Member on the House Financial Services Committee.
Ms. Waters’ bill provides for a collection of 10 basis points for “every dollar outstanding mortgages collateralizing covered securities” estimated to be about $5 billion a year. These dollars would be directed to three funds that support affordable housing activities, with 75% going to the National Housing Trust Fund.
The National Housing Trust Fund will provide block grants to states to be used primarily to build, preserve, rehabilitate, and operate rental housing that is affordable to the lowest income households, including seniors, people with disabilities, and people in the low wage work force. It was enacted in 2008, but has not yet been funded.
Nationwide there is a shortage of seven million homes that are affordable and available to extremely low income households, those with incomes at 30% of the area median or less. As a result, they must spend high percentages of their meager incomes for rent and are at high risk of eviction or homelessness.
“Representative Waters has been a stalwart champion of the National Housing Trust Fund for many years. She knows how crucial stable, secure housing is for children to succeed in school, for adults to succeed in the workplace, and for seniors and people with disabilities to live with dignity in their communities,” said Sheila Crowley, President and CEO of the National Low Income Housing Coalition. “We are very grateful that she has provided for decent homes for them in her legislation.”
HOME Forward would wind down Fannie Mae and Freddie Mac and replace them with a lender-owned cooperative to issue federally guaranteed securities. It will also create a new regulator, the National Mortgage Finance Administration. It provides for broad access to lending for all credit worthy borrowers and assures a continued secondary mortgage market for multifamily housing.
The Waters bill builds on the housing finance reform work in the Senate. A draft bill released on March 16 by Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) also assesses the 10 basis point fee and directs 75% to the National Housing Trust Fund.
Unlike the Senate, however, there is no bipartisan agreement in the House on housing finance reform. A bill introduced in 2013 by House Financial Services Committee Chairman Jeb Hensarling (D-TX), H.R.2767, would eliminate Fannie Mae and Freddie Mac, as well as the National Housing Trust Fund and remove the federal role in the mortgage market.
Dr. Crowley is available for further comment
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