FHFA Directs Fannie Mae and Freddie Mac to Begin Making Contributions to the Housing Trust Fund
This morning, the Federal Housing Finance Agency (FHFA) announced it is directing Government-Sponsored Enterprises Fannie Mae and Freddie Mac (the GSEs) to begin setting aside and allocating funds to the Housing Trust Fund and the Capital Magnet Fund (the Funds). Although the Housing and Economic Recovery Act of 2008 (HERA) instructed the GSEs to contribute annually to the Funds, then–FHFA Acting Director Ed DeMarco in 2008 suspended such contributions before the GSEs made any.
NCSHA is a long-time supporter of the Housing Trust Fund and a dedicated funding source for it. States are statutorily designated as the Housing Trust Fund’s administrators. Many HFAs have already been designated by their states as the administrating entity.
Below is a brief description of the terms under which both Funds will receive the GSEs’ contributions and a set of questions and answers about the Housing Trust Fund.
In letters FHFA Director Mel Watt sent the GSEs this morning informing them that he is terminating the suspension, he directs them to begin making contributions under the following terms:
- Starting with the GSEs’ fiscal year 2015, which begins on January 1, 2015, the GSEs will begin setting aside an amount equal to 4.2 basis points of each dollar of unpaid balance of total new business purchases.
- Within 60 days after the end of the fiscal year, in January or February of 2016, the GSEs will transfer the funds, unless the GSEs drew funds from Treasury during the fiscal year or the transfer would cause them to require a draw of funds from Treasury.
- Of the funds being transferred from the GSEs, 65 percent will be allocated to HUD to fund the Housing Trust Fund and 35 percent will be transferred to the Capital Magnet Fund operated by Treasury.