The Bush administration has threatened to veto the bill.
The bill will initially allocate between $800 million and $1 billion annually directly to states and local communities and is funded through fees from Fannie Mae and Freddie Mac (in the House-passed GSE Affordable Housing Fund bill), and the increase in the number of FHA loans generated from the enactment of the Expanding American Homeownership Act (HR 1852).
Unlike the HOME program, the Trust fund targets funds more for the construction of affordable housing and more for lower income families facing the greatest housing affordability challenges.
“We have taken another step forward to the affordable housing crisis by establishing a national affordable housing trust fund that will help many of our working families,” said Rep. Raúl M. Grijalva. “By constructing more affordable housing, we will have helped those who have lost their homes as well as reducing homelessness and Americans living in unsafe housing conditions.”
All Trust Fund monies must be used for low- and moderate-income families (below 80 percent of state or local median income). At least 75 percent of funds must go to extremely low-income families (below 30 percent of median income or national poverty level), with 30 percent of funds for families with incomes below the SSI income limit. On top of helping very low-income families, the bill reserves some trust fund money (10 percent) to families who earn from 50 percent to 80 percent of median income – helping families of nurses, teachers, firefighters, and police officers.
One in seven (17 million) households spend more than 50 percent of their income on housing, and about 750,000 people are homeless on any given night.