New Federal Program Will Bring New Resources to Iowa
National Housing Trust Fund finally funded
In an environment of declining federal support for affordable housing, a program left unfunded since the Great Recession is revived. Before the housing meltdown last decade, a more bipartisan Congress fashioned the National Housing Trust Fund program to address the severe rental housing shortage for households that make less than 30% of area median income. Funding for the program was delayed for years due to the state of the economy – but with a recent announcement from Federal Housing Finance Agency Director Mel Watt, the program will finally move forward.
Like most areas of the country, Central Iowa demonstrates a severe shortage of rental units for our lowest-income neighbors, those making less than 30% of area median income (or about $22,400 for a family of 4). Other federal programs designed to address affordable housing are not targeted at this group of Extremely Low Income Households, who are the most in need and the most expensive to serve. The Urban Institute estimates that in Polk County, there are only 30 affordable units for every 100 households in this income level, a number typical of metro areas across the nation.
Using a percentage of the volume of business done by Fannie Mae and Freddie Mac, the National Housing Trust Fund sends an annual allocation to states to create and sustain this needed rental inventory. The amount of funding depends on the continued success of these two government-sponsored enterprises. Based upon historical data, it could mean millions of dollars in additional, targeted funding for Iowa.
The NHTF allocation will be managed by the Iowa Finance Authority consistent with a Rule proposed by HUD in 2010. The first dollars are expected to reach Iowa in 2016.
For additional information on the NHTF click HERE.