FHFA Announces Largest Allocation Yet to Housing Trust Fund and Capital Magnet Fund
Today, Federal Housing Finance Agency Acting Director Sandra L. Thompson announced the Housing Trust Fund (HTF) and the Capital Magnet Fund (CMF) will receive a total of $1.138 billion for affordable housing initiatives from Fannie Mae and Freddie Mac (the Enterprises). HTF will receive $740 million, an increase of $29 million from the previous year, and CMF will receive $398 million, an increase of $15 million from the previous year. These are the largest amounts ever provided to these programs from the Enterprises.
The Housing Trust Fund, overseen by the U.S. Department of Housing and Urban Development (HUD), allocates funding annually to states and state-designated entities, including 39 state HFAs. HTF funds can be used for the acquisition, new construction, reconstruction, and/or rehabilitation of affordable housing for very low-income families — families with incomes not greater than 50 percent of area median income (AMI) — and extremely low-income families — families with incomes not greater than 30 percent of AMI.
According to regulations, if HTF receives less than $1 billion in a single year (as has been the case to date), all HTF resources must be used to benefit extremely low-income families. Since 2016, the year states received their first HTF allocations, approximately 3,300 rental homes have been produced and placed in service for extremely low-income families. HUD will announce state-level allocations soon.
The Capital Magnet Fund, overseen by the U.S. Treasury Department, provides competitive grants to Community Development Financial Institutions, housing finance agencies, and other eligible nonprofit organizations to support the development, rehabilitation, purchase, and preservation of affordable housing, as well as related economic development activities and community service facilities. In 2020, five HFAs (Colorado Housing and Finance Authority, Connecticut Housing Finance Authority, MassHousing, New Mexico Mortgage Finance Authority, and Rhode Island Housing) received at total of $22.3 million through CMF awards.
