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For frequent updates and more in-depth information on the National Housing Trust Fund, please visit the National Housing Trust Fund Campaign website.

In July 2008, the Housing and Economic Recovery Act was signed into law, establishing a National Housing Trust Fund, among other housing-related provisions. On February 1, 2011, the President announced a Housing Plan, which includes the $1 billion capitalization needed to fund the National Housing Trust Fund. The plan aims to assist homeowners and renters struggling to afford their housing. The President also included $1 billion for the NHTF in his fiscal year (FY) 2013, FY 2012, FY 2011 and FY 2010 congressional budget requests.

On December 18, 2012, Representative Keith Ellison (D-MN) introduced H.R. 6677, the Common Sense Housing Investment Act, which would reform the Mortgage Interest Deduction (MID) and use the generated savings to provide dedicated funding (beyond capitalization) for the National Housing Trust Fund. On March 15, 2013, Mr. Ellison reintroduced his bill, H.R. 1213, in the 113th Congress. Specifically, Rep. Ellison’s proposal would lower the cap on the amount of mortgage for which interest can be deducted from $1 million to $500,000, as well as convert the deduction to a nonrefundable 15 percent tax credit, making it available to all homeowners with mortgages (rather than just those with enough income to itemize). These modifications to the MID would save approximately $197 billion over ten years, the majority of which would be directed to the NHTF.

About the Trust Fund:

The purposes of the NHTF are to increase and preserve the supply of rental housing that is affordable for extremely and very low-income households, including people experiencing homelessness, and increase homeownership opportunities for those households. Since the Trust Fund was designed as a permanent federal program, the $1 billion needed to capitalize it would need to come from dedicated sources of revenue. To prevent funding for the NHTF from competing with existing HUD programs, the NHTF Campaign expects this revenue to be generated separately from the current appropriations process.

The current legislation mandates that at least 90 percent of the Trust Fund’s resources must be used for the production, preservation, rehabilitation, or operation of rental housing, while first-time home buyers can use up to 10 percent for the following home ownership activities: production, preservation, rehabilitation, down payment assistance, closing cost assistance, and assistance for interest rate buy-downs. Additionally, at least 75 percent of the funds for rental housing must benefit extremely low income households and all funds must benefit very low income households.

Advocates are currently examining legislative routes to secure a funding source for this key affordable housing program. Some current options are through reforming the Mortgage Interest Deduction, receiving contributions from Fannie Mae and Freddie Mac, housing finance reform, or Congress meeting the President’s budget request. For more information about the Trust Fund, visit the National Low Income Housing Coalition’s webpage.