Mel Watt’s FHFA Must Restore Funding for Rental Housing Programs for Vulnerable Latino Renters

(Guest blog post from MyHomeForGood.com)

HFG_LOGO-FullColor-horiz 6 4 12At the height of the foreclosure crisis, which claimed the homes of over one million Latino families, Congress authorized the creation of affordable rental housing funding streams via the National Housing Trust Fund (NHTF) and the Capital Magnet Fund (CMF) as part of the Housing and Economic Recovery Act of 2008.

Under Ed DeMarco, Acting Director of the Federal Housing and Finance Agency (FHFA), these crucial rental housing funding sources remained unfunded for more than five years!  However, the FHFA’s newly confirmed director, Mel Watt, has the authority to restore funding to these programs and provide essential affordable housing for the disproportionately vulnerable Latino community.

Keep up with the latest from UnidosUS

Sign up for the weekly UnidosUS Action Network newsletter delivered every Thursday.

Since the programs’ creation in 2008, the availability of affordable homes for extremely-low-income households—those struggling at or below 30 percent of the federal poverty level—has plummeted by more than one million units.  For these most vulnerable families, a massive shortage of nearly five million affordable housing units exists today.

With full funding restored by the FHFA, the National Housing Trust Fund would immediately begin to remedy this shortage.  Nearly 90 percent of NHTF funding would go directly toward the construction or renovation of rental housing for extremely-low-income households.  Fanning out across the country as block grants to every state and Washington, DC, the funds would bring tangible relief to the Latino community and America’s hardest-hit populations.

Sold Home For Sale Sign in Front of New HouseSimilarly, a fully funded Capital Magnet Fund would award grants to U.S. Department of Treasury–certified community development financial institutions (CDFIs) and nonprofits focused on the development of affordable housing.  These organizations could use the funds to build affordable housing geared toward low-income households.  Unlike the NHTF, funds from the CMF can also be used to stabilize underserved communities through building health care, day care, and workforce development centers.

With an estimated 1.3 million Latinos having lost their homes between 2009 and 2012 due to foreclosure, this reform is desperately needed in the community to prevent homelessness and give every family a chance at basic housing security.

With our families struggling for far too long under the inaction of FHFA, Mr. Watt has a chance to offer real relief to working families of color by reinstating contributions from Fannie Mae and Freddie Mac toward the National Housing Trust Fund and the Capital Magnet Fund.  For the good of America’s economy as a whole, we urge Mr. Watt to make the right choice.

You might also be interested in: