USCCB - (SDWP) - The National Housing Trust Fund Fails to Make Final Cut

The National Housing Trust Fund Fails to Make Final Cut

Thanks to all of you who have worked so hard over the past last few weeks trying to get the National Housing Trust Fund passed in the House Financial Services Committee. Unfortunately, we came up one vote short on the final Committee effort to keep the NHTF in the omnibus housing bill. The Housing Bill (HR 3995) goes to the House floor without the Trust Fund.

Here ‘s what happened.

In the middle of June, the Financial Services Committee amended an omnibus housing bill (HR 3995) to include the National Housing Trust Fund on a party line vote. (See ALERT of 6/21) The Amendment provides funds (profits from the FHA Mutual Mortgage Insurance Program and Ginnie Mae) to build, rehabilitate, and preserve 1.5 million units of housing over the next 10 years for households with very low incomes (at or below 30% of area median income).

As expected, on July 10, the House Financial Services Committee voted to strip the National Housing Trust Fund amendment from the underlying housing bill. In a surprise move, Representative Sue Kelly (R-NY) offered a substitute for the NHTF that would create one-for-one matching grants for state and local housing trust funds, subject to appropriations. Representative Bernie Sanders (I-VT), countered by offering an amendment that would create a National Housing Trust Fund, but would make its funding subject to appropriations, rather than reliant on the FHA surplus. (Using the FHA surplus is a controversial funding source for some Members.)

Although both proposals aimed to produce new rental housing, the Kelly proposal would necessitate local housing trust funds in order to qualify for federal grants. The National Housing Trust Fund, in contrast, would provide a four-to-one federal match of state and local housing spending, whether or not a local trust fund was involved. The Center for Community Change reports that there are 287 state and local trust funds around the country in 41 states.

Ultimately, Mr. Sanders' National Housing Trust Fund amendment failed, 34 to 35; Ms. Kelly's amendment passed on a voice vote. The Kelly amendment, now called the "Kelly-Sanders" amendment, provides federal matching grants to state and local trust funds, of which 75% would be targeted to rental housing for extremely low income families, with 25% distributed for housing for low income families, either rental or homeownership. The funds could be used for production, preservation, or rehabilitation. Further, the bill requires 40% of any funds appropriated go to states and 60% of funds go to localities.

While we are encouraged that the Committee finally recognized the need for new production of rental housing for extremely low income people, the bill is very modest and very limited in scope. The National Housing Trust Fund Campaign plans to continue to work on achieving the passage of a National Housing Trust Fund.

The Housing bill with the Kelly-Sanders Amendment ultimately passed the committee by voice vote, but a vote by the full House of Representatives has yet to be scheduled.

Stay tuned......

Thom Shellabarger
Policy Advisor
United States Conference of Catholic Bishops
202.541.3189
tshellabarger@usccb.org