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.
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
Many housing advocates argue that the conditions that
prompted the regulatory agency to suspend payments in 2008 no
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