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Washington, DC - House Financial Services Committee Chairman Barney Frank (D-MA), along with Reps. Maxine Waters (D-CA), Gary Miller (R-CA), John McHugh (R-NY), and Jim Ramstad (R-MN) today introduced legislation with the goal of producing, rehabilitating and preserving 1.5 million housing units over the next 10 years. The new bill, H.R. 2895, will initially allocate between $800 million and $1 billion annually to states and local communities, without increasing government spending or the federal deficit. The National Affordable Housing Trust Fund will be funded from amounts provided in the recently passed Government Sponsored Enterprises’ (GSE) Affordable Housing Fund (H.R. 1427), from savings from Federal Housing Administration reforms contained in H.R. 1852, the Expanding Americans Home Ownership Act, and from any other funding sources that may be subsequently identified. Under the Trust Fund bill, 60% of the funds will be allocated directly to local communities, with the remainder to be granted to states, insular areas, and Indian Tribes. The Trust Fund will be the largest expansion in federal housing programs in decades.
Chairman Barney Frank also announced today that the Financial Services Committee will hold a hearing to discuss H.R. 2895 on July 12 at 10:00 a.m. in 2128 Rayburn House Office Building.
“The growing shortage of affordable housing is one of the most serious social and economic problems facing our country. Given our severely constrained fiscal realities, we are today doing the best we can to address this – creating a low income housing trust fund that will be paid for in ways that do not draw from federal tax revenues,” said Chairman Barney Frank.
"Housing is one of our most basic human needs. Yet each day, people across rural America struggle to meet their housing requirements. This essential legislation not only helps people find quality, affordable rental units, but brings them closer to their dream of homeownership. I look forward to working with my colleagues on both sides of the aisle to make that dream a reality for more Americans," said Rep. McHugh.
“The Affordable Housing Trust Fund represents a major step forward for housing policy in this country. The fund will provide the necessary tools for our nation to reverse the current affordable housing crisis by providing the resources for the construction of over 1 million new units. Beyond the bricks and mortar, these units will provide homes and stable communities for the poorest in our nation, with 75% of the dollars going to serve the extremely low income. Chairman Barney Frank is to be commended for this bold and courageous action,” said Rep. Maxine Waters.
“The lack of affordable housing is a huge crisis, and this bipartisan, common-sense bill will help make the dream of having a home a reality for millions of Americans,” Rep. Ramstad said.
The Affordable Housing Trust Fund will allocate 60% of Trust Fund monies to larger cities and counties (“participating local jurisdictions”) and the rest to states, Indian Tribes and insular areas. The Department of Housing and Urban Development (HUD) will be required to develop a formula for allocations based on a number of factors, including population, housing affordability, percentage of very and extremely low income families, cost of construction and rehabilitation, and the extent of substandard and aging housing.
The fund can be used to build, rehabilitate, and preserve affordable rental housing and to provide down payment and closing cost assistance for first-time homebuyers. The bill is income targeted to those families most in need – through provisions that require that 100% of the funds go for the benefit of low income families and that three quarters of all funds go to extremely low income families. These income targeting provisions ensure that housing assistance go to help precisely the category of families that face the most extreme challenges in finding a place to live that is affordable.
States and localities are required to make Trust Fund grants to qualified entities (which include for profits, nonprofits, agencies, and faith-based organizations) that propose affordable housing projects designed to meet the highest priority housing needs in their jurisdictions. Funds will be awarded under a funding competition that requires geographic diversity, and which prioritizes funding based on criteria which include the merits of the project, the ability of the applicant to carry out the project in a timely manner, the extent of leveraging of other resources, and the demonstrated local need for the housing project.
The Fund includes matching requirements of state, local, or locally controlled federal funds, and includes provisions to reallocate funds from any grantee that does not follow the rules or does not put out the funds in a timely manner. The bill also includes a number of provisions to ensure that the funds are used for housing and are not misused or used for other purposes, including:
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A strict prohibition against any funds being used for a recipient’s administrative costs or expenses, political activities, advocacy, lobbying, counseling, travel expense, or preparation or advice on tax returns;
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Limits set by HUD on how much grantees can spend on administrative costs;
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A requirement by HUD to establish program regulations, authority for HUD to audit each grantee’s compliance, a requirement that each grantee develop systems to ensure program compliance, and require annual state fund use reports, and;
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Authority of HUD to impose penalties on grantees that do not comply with requirements, including requiring grantees to reimburse misused funds.
H.R. 2895
Legislation Specifics
Summary of Legislation
Letters of Support:
National Association of Realtors
United States Conference of Catholic Bishops
Evangelical Lutheran Church in America
National Low Income Housing Coalition
Lutheran Services in America
Enterprise Community Partners
Jewish Council for Public Affairs
Housing Assistance Council
National AIDS Housing Coalition
American Network of Community Options and Resources
National Alliance on Mental Illness
National Coalition for the Homeless
National Alliance to End Homelessness
Coalition on Human Needs
National Health Care for the Homeless Council
Disability Policy Collaboration
National Association of Home Builders
The Jesuits in the United States
Corporation for Supportive Housing
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