WASHINGTON President Barack Obama proposed spending $1 billion next year for the U.S. Department of Housing and Urban Development to fund a federal affordable housing trust fund established by Congress six years ago, according to the 2015 White House budget.
The fund was originally mandated to be capitalized by government-run Fannie Mae and Freddie Mac. If given budget authority, it would be the first contribution to the National Housing Trust Fund that was set up in 2008.
Over time, the White House predicted the money would provide for 16,000 affordable units using a mix of funding sources, including other public funds, tax credits and private debt.
The housing trust fund was established to provide "grants to states to increase and preserve the supply of affordable rental housing and homeownership opportunities for extremely low- and very low-income families," the budget proposal said.
Under the legislation that established the affordable housing fund, Fannie and Freddie were meant to be the source of capital. But the previous head of the Federal Housing Finance Agency, Edward DeMarco, kept them from paying into the fund after they were bailed out by taxpayers at the height of the financial crisis.
Many housing advocates argue that the conditions that prompted the regulatory agency to suspend payments in 2008 no longer exist.
A new regulator, Melvin Watt, took charge of the agency in January, but he has yet to say whether the companies should move to capitalize the fund after a group of more than 30 Democrats in the U.S. Senate called on him earlier this year to do so.
Fannie Mae and Freddie Mac, which own or guarantee 60 percent of all U.S. home loans, were seized by the government in 2008 as mortgage losses threatened their solvency.
They have since returned to profitability, and by the end of March will have sent taxpayers $202.9 billion for their support, $15.4 billion more than the $187.5 billion they received in bailout funds.