FHFA Authorizes More than $1 Billion for Affordable Housing Funds
The Federal Housing Finance Agency (FHFA) announced today a $1.09 billion disbursement for Fannie Mae and Freddie Mac (the Enterprises) affordable housing allocations for 2020. This is the largest amount ever disbursed and more than double what was provided last year.
Congress established the Housing Trust Fund (HTF) and Capital Magnet Fund (CMF) in the Housing and Economic Recovery Act (HERA) of 2008 to support affordable housing. HERA directed the Enterprises to set aside 4.2 basis points of each dollar of unpaid principal balance of its total new business purchases and then allocate those reserved funds following each fiscal year for.
The funding is divided with the HTF receiving 65% and the CMF receiving 35%.
This year, more than $700 million will go to the U.S. Department of Housing and Urban Development (HUD) for the HTF and $383 million will go to the Department of the Treasury for the CMF.
The HTF, overseen by HUD, allocates money annually to states and state-designated entities for the production or preservation of affordable housing through the acquisition, new construction, reconstruction, and/or rehabilitation of non-luxury housing.
The CMF, overseen by Treasury, competitively awards money to finance affordable housing activities, as well as related economic development activities and community service facilities.
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