WASHINGTON A House subcommittee is attempting to redirect Fannie Mae and Freddie Mac funds from an affordable housing trust program into a different project run by the Department of Housing and Urban Development.
The House subcommittee for Transportation-HUD approved a bill Wednesday that includes a provision to take money dedicated to the National Housing Trust Fund to cover a shortfall in funding for the HOME program.
The subcommittee approved the overall 2016 fiscal appropriations bill by voice vote.
During the markup, Rep. Nita Lowey, D-N.Y., raised objections to the Housing Trust Fund proposal but did not seek to strike the provision from the bill.
"The Housing Trust Fund targets the lowest of the low- income people while the HOME program focuses on low- and moderate incomes," Lowey said. "We have a lack of supply of affordable housing at all income levels. But I am concerned that by taking money dedicated to the Housing Trust Fund we will perpetuate another gap in the spectrum of affordable housing."
Lowey noted that Republican leaders are operating on strict budget constraints due to their adherence to "draconian sequestration" funding levels. She called on GOP members to agree to a bipartisan budget proposal that provides relief from sequestration.
Sheila Crowley, the president and chief executive of the National Low Income Housing Coalition, said GOP appropriators are raiding the Housing Trust Fund to fund the HOME program at its current $900-million level.
The bill provides just $767 million for the HOME program in fiscal 2016. Committee staff estimated that the Housing Trust Fund will generate $133 million in its first year of operation to fill the hole.
"It is not providing any new money" for affordable housing, Crowley said in an interview.
Congress created the National Housing Trust Fund in 2008, but it wasn't funded because Fannie and Freddie were seized by the government later that year due to their deteriorating financial condition and placed into conservatorship.
In December, FHFA Director Mel Watt decided to stand up the trust housing fund, which angered Republicans on the House and Senate banking committees.
During 2015, the GSEs will set aside 4.2 basis points for each dollar of loans they purchase from lenders. HUD will distribute the House Trust funds to the states in early 2016.