National Housing Trust Fund

In 2008, the National Housing Trust Fund was established as part of the Housing and Economic Recovery Act. However, the Trust Fund has not yet been funded, and concerted advocacy efforts are underway to change that.


For frequent updates and more in-depth information on the National Housing Trust Fund, please visit the United for Homes 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. Although the Housing Trust Fund has been established, a permanent funding stream has not been secured. The President also included $1 billion in mandatory funding to capitalize the NHTF in his fiscal year (FY) 2015, 2014, 2013, 2012, 2011, and 2010 congressional budget requests; however, Congress has yet to provide these funds. HUD estimates that $1 billion would create 16,000 affordable units for extremely low and very low income households, and Secretary Donovan referred to the $1 billion for the NHTF in the President’s FY 2015 budget proposal as a “down payment.”

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, the Common Sense Housing Investment Act of 2013, in the 113th Congress.

Specifically, Rep. Ellison’s proposal would lower the cap on the amount of mortgage from which interest can be deducted from $1 million to $500,000, as well as convert the deduction to a 15 percent non-refundable mortgage interest tax credit, making it available to all homeowners with mortgages (rather than just those with enough income to itemize); these changes would be phased in over five years. Under this proposal, the number of homeowners with mortgages who would get a tax break would increase from 39 million to 55 million, with 99% of the increase representing households with incomes of less than $100,000 a year. These modifications to the MID would save approximately $197 billion over ten years, and the majority of the revenue would be directed to the NHTF, while some would also be directed to the Low Income Housing Tax Credit, Section 8 and the Public Housing Capital Fund. An investment of this size would greatly expand the supply of rental homes that the lowest income households can afford. It is possible that there will be opportunities for passage of the bill in the future.

Senate Banking Committee Chair Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) have co-sponsored a bill (as an amendment to the Corker-Warner bill) which, if passed, would result in increased funding for the NHTF. The NHTF would receive a hefty investment of $3.75 billion annually, and the bill would also wind down Fannie Mae and Freddie Mac and establish the Federal Mortgage Insurance Corporation. Passage of the bill was held up in the Senate Committee on Banking, Housing, and Urban Affairs, particularly by six key Democratic Senators who agreed with the NHTF provisions, but not other provisions included in the legislation. It is unlikely that the Senate will take up the bill in this Congress. Other housing finance reform proposals that have been introduced this year which would increase funding to the National Housing Trust Fund include Maxine Waters’ draft Housing Opportunities Move the Economy (HOME) Forward Act and H.R. 5055, the Partnership to Strengthen Homeownership Act. You can learn more about efforts to fund the National Housing Trust Fund through the National Low Income Housing Coalition’s United for Homes campaign.

About the Trust Fund:

The goal of the Trust Fund is to provide ongoing, permanent, dedicated, and sufficient sources of revenue to build, rehabilitate, and preserve 1.5 million units of housing for the lowest-income families, including people experiencing homelessness, over the next 10 years. The NHTF particularly aims to increase and preserve the supply of rental housing that is affordable for extremely and very low-income households, and increase homeownership opportunities for those households. To prevent funding for the NHTF from competing with existing HUD programs, the United for Homes 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. Up to 10 percent can be used for the following homeownership activities for first-time homebuyers: production, preservation, rehabilitation, down payment assistance, closing cost assistance, and assistance for interest rate buy-downs. At least 75 percent of the funds for rental housing must benefit extremely low income households (30 percent of AMI or less) or households with incomes below the federal poverty line, whichever is greater. All funds must benefit very low income households (50 percent of AMI or less).



Library Resources

Federal Policy Brief | August 28, 2008
This document contains the text of the National Housing Trust Fund section of the recently enacted Housing and Economic Recovery Act. The Trust Fund provides resources that will primarily develop rental housing affordable to extremely low income households.