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FOR IMMEDIATE RELEASE
National Low Income Housing Coalition Files Suit Against Federal Housing Finance Agency for Failing to Fund Affordable Housing
WASHINGTON - July 9 - Today, the National Low Income Housing Coalition, along with four individual plaintiffs and the Right to the City Alliance, filed a lawsuit against the Acting Director of the Federal Housing Finance Agency, Edward DeMarco, for failing to uphold Fannie Mae and Freddie Mac’s statutory requirement to make contributions to the National Housing Trust Fund.
“The time has long past for Fannie Mae and Freddie Mac to be supporting the National Housing Trust Fund as Congress meant for them to do. The delay caused by the Federal Housing Finance Agency is unconscionable given the growing shortage of housing that is affordable for the lowest income Americans. The National Low Income Housing Coalition is taking this action today in hopes these critical resources can be put to use as soon as possible,” said Sheila Crowley, President and CEO of the National Low Income Housing Coalition.
The Housing and Economic Recovery Act of 2008, signed by President George W. Bush, established the National Housing Trust Fund to build, preserve, rehabilitate, and operate rental housing that is affordable to the lowest income Americans. The law requires that Fannie Mae and Freddie Mac transfer a portion of the value of their new business to the National Housing Trust Fund. This requirement was temporarily suspended by the Director of the Federal Housing Finance Agency when Fannie Mae and Freddie Mac were taken into conservatorship.
The 2012 Securities and Exchange Commission’s filings show that new business activity for Fannie Mae and Freddie Mac in 2012 was approximately $1.4 trillion. Thus in 2012, approximately $382 million of that amount should have gone to the National Housing Trust Fund.
As the National Housing Trust Fund remains unfunded, the state of housing for America’s poorest families continues to worsen. Extremely low income renters, including seniors, people with disabilities, families, and veterans, are suffering the most. Over two-thirds (68%) of our country’s poorest households have to spend more than half of their income on housing costs. For every ten extremely low income households, there are only three affordable and available homes.
Given the strong financial position of both Fannie Mae and Freddie Mac, the conditions that prompted the suspension in 2008 no longer exist. All suspended payments since the first quarter of 2012 should be applied to the National Housing Trust Fund. Federal Housing Finance Agency Acting Director DeMarco has failed to lift the suspensions, thereby neglecting the companies’ statutory obligations to support affordable housing.
Once funded, the National Housing Trust Fund will begin to address the nationwide shortage of 7.1 million rental units that are affordable and available to our poorest households. This shortage is the principle reason why homelessness persists in the United States today.