Industry News

HUD knocks funding mechanism for rental-housing trust fund

Bush administration: GSEs, FHA shouldn't pay for rental housing

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The Bush administration opposes a plan to tap Fannie Mae, Freddie Mac and the Federal Housing Administration to fund affordable rental units and down-payment assistance for first-time home buyers. A bill introduced last month, HR 2895, would create a National Affordable Housing Trust Fund to be administered by the Department of Housing and Urban Development (HUD), and provide up to $1 billion a year in funding. Backers say the fund would be used to build, rehabilitate and preserve 1.5 million units of affordable rental housing, and to provide down-payment and closing-cost assistance for first-time home buyers. But HUD Assistant Secretary Brian Montgomery told members of the House Financial Services Committee Thursday that the bill's reliance on projected revenue from the FHA would "essentially be robbing Peter to pay Paul," because such diversions would have to be offset by Congress. "We could find ourselves in a position where the affordable-housing trust fund is funded, b...