Significant New Source of Funds for Affordable Housing
December 11th, 2014 marks a very important day for low income housing! FHFA has instructed Fannie Mae and Freddie Mac to contribute 0.042 percent of every dollar of unpaid principal balance in their portfolios to the National Housing Trust Fund (NHTF) and the Capital Magnet Fund (CMF), beginning fiscal year 2015. This development is a significant new source of funding for affordable housing that will benefit low income households around the country.
The NHTF is designed to create housing for very low- and extremely low-income households. 80 percent of funding is required to be used for the creation of rental housing, 75 percent of which must be used to benefit extremely low-income families or families at or below the poverty line. While only 10 percent of overall NHTF funding is available for ownership uses, this still represents an excellent new source of funding for shared equity homeownership programs, which are specifically highlighted in NHTF regulations.
The CMF is a competitive grant program within the Community Development Financial Institutions (CDFI) fund. The Treasury will competitively award grants to local CDFIs and non-profit organizations engaged in the development or management of affordable housing. Funds may also be used to implement economic development activities and to manage community service facilities.
Read more about the NHTF>
Read more about the CMF>