WASHINGTON — Federal Housing Finance Agency Director Mark Calabria has authorized Fannie Mae and Freddie Mac to contribute a total of $502.2 million to the National Housing Trust Fund and the Capital Magnet Fund — the largest contributions the government-sponsored enterprises will make to the funds to date.
Since 2015, Fannie and Freddie have transferred funds annually to the National Housing Trust Fund and the Capital Magnet Fund, typically at the beginning of every March. The GSEs set aside 4.2 basis points of each dollar of unpaid principal balance to submit to both affordable housing initiatives each year.
In 2019, Fannie and Freddie contributed a total of $376 million to the two funds, up from $239 million the year before.
The National Housing Trust Fund is managed by the Department of Housing and Urban Development, and provides states with resources to build, preserve and operate affordable housing for extremely low-income households. The Capital Magnet Fund in managed by the Treasury Department and provides grants to community development financial institutions and nonprofit affordable housing organizations.
The Trump administration has proposed eliminating both of the funds in its 2020 and 2021 budget, and argued in this year’s budget that state and local governments “are better positioned” to address housing affordability.
“Housing for low-income families is currently funded by multiple funding sources, including federal, state and local governments, as well as the private and nonprofit sectors,” the White House’s budget said. “The result is a fragmented system with varying rules and regulations that create overlap and inefficiencies, as well as challenges to measuring collective performance.”
But Democrats have long criticized any proposal to cut or overhaul the affordable housing funds, and have called it a nonstarter in any housing finance reform plan.
In his nomination hearing last year, Calabria pledged to Senate Democrats that he would continue funding the National Housing Trust Fund and the Capital Magnet Fund during his tenure as director of the FHFA.