Federal Housing Finance Agency (FHFA) Director Mel Watt announced Thursday that he will back the Housing Trust Fund, a move that earned support in Congress.
In his announcement, Watt directed Fannie Mae and Freddie Mac to begin setting aside and allocating funds to the Housing Trust Fund and the Capital Magnet Fund, pursuant to the Housing and Economic Recovery Act of 2008 (HERA).
Temporary suspension of these allocations was issued on Nov. 13, 2008, but the recent announcement reverses the suspension.
The Housing Trust Fund is a permanent federal fund that focuses on providing support to states to build, preserve and ultimately increase the supply of affordable rental housing for extremely low- and very low-income families, including homeless families.
“In the richest country in the world, it is unconscionable that there are 7.1 million American households for whom safe and decent housing is neither affordable nor available,” says U.S. Rep. Maxine Waters, D-Calif., a coauthor of the legislation that created the Trust Fund. “By allocating a tiny percentage of Fannie Mae and Freddie Mac’s profits to these Funds, we have the chance to improve the lives of millions of American children, families, people with disabilities and the elderly.
Previously, Waters fought to authorize the Housing Trust Fund and the Capital Magnet Fund, which also support homeownership, during the debate over HERA. Working with others in Congress, Waters built support for the funds, eventually leading to them being signed into law by President George W. Bush.
Written by Emily Study