(Corrects in lead paragraph to show appropriation request
instead of Fannie, Freddie funding)
By Margaret Chadbourn
WASHINGTON, March 4 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.
Under the legislation that established the affordable
housing fund, Fannie and Freddie were meant to be the source of
capital. However, 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 the conditions that prompted
the regulatory agency to suspend payments in 2008 no longer
A new regulator, Melvin Watt, took charge of the agency in
January, but he has yet to say whether the companies should now
move to capitalize the fund after a group of more than 30
Democrats in the U.S. Senate earlier this year called on him to
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.
But they have since return 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 bailout funds.
(Reporting by Margaret Chadbourn; Editing by Susan Heavey and