House Passes Bill That Includes Housing Trust Fund; Heads to Senate
The House of Representatives on July 23 overwhelmingly passed H.R. 3221, the Housing and Economic Recovery Act of 2008, which would establish a permanent affordable housing trust fund. By a vote of 272 to 152, the House agreed to a wide-sweeping reform of Government Sponsored Enterprises (GSEs) Freddie Mac and Fannie Mae, the creation of a new refinancing program within the Federal Housing Administration (FHA) to help homeowners facing foreclosure, and a White House plan to keep the GSEs afloat. The Administration earlier issued a Statement of Administration Policy advocating for expeditious passage of the legislation.
The Housing Trust Fund provisions in the bill would target at least 75% of the funds to be used for rental housing to people with income below 30% of area median. All of the funds would have to benefit people with incomes below 50% of area median. Furthermore, the bill places a cap on using housing trust fund resources for homeownership at 10%. This will help ensure that the housing trust fund focuses on the very lowest income households, which have the greatest housing affordability problems.
The initial source of dedicated funding is the GSEs, but in the future other sources may be developed and will be needed to meet the goal of providing 1.5 million new affordable housing units.
The bill now moves to the Senate for consideration as early as Thursday, July 24.
