Two organizations synonymous with the 2008 financial crisis could play vital roles in helping America’s most vulnerable residents get off the streets. ThinkProgress reported that Fannie Mae and Freddie Mac — two government-backed mortgage companies whose buying and guaranteeing of risky mortgages contributed to the Great Recession — are now able to contribute to the National Housing Trust Fund. The fund was created in 2008 to support affordable housing initiatives nationwide but had laid dormant until now, as the Federal Housing Finance Agency (FHFA) announced in December that “both [Fannie Mae and Freddie Mac] are financially fit” to contribute. The two organizations were …
Two organizations synonymous with the 2008 financial crisis could play vital roles in helping America’s most vulnerable residents get off the streets.
ThinkProgress reported that Fannie Mae and Freddie Mac — two government-backed mortgage companies whose buying and guaranteeing of risky mortgages contributed to the Great Recession — are now able to contribute to the National Housing Trust Fund.
The fund was created in 2008 to support affordable housing initiatives nationwide but had laid dormant until now, as the Federal Housing Finance Agency (FHFA) announced in December that “both [Fannie Mae and Freddie Mac] are financially fit” to contribute.
The two organizations were barred from setting aside money for the fund previously due to the financial crisis.
While the fund falls short of solving America’s shortage of affordable housing, it’s a welcome step advocates across the country have been waiting for, TakePart reported. The fund is expected to raise $250 million to $350 million in 2015, and will be distributed to states next year.
The funds will mostly be used to alleviate extremely low-income renters.
In the U.S., there were 578,424 people experiencing homelessness on any given night in January 2014, according to the National Alliance to End Homelessness. And while that figure is large, it doesn’t include the millions of Americans who are “housing insecure,” as Terri Ludwig, Huffington Post blogger and CEO of Enterprise Community Partners, wrote in December.
And the number of those on the brink of homelessness may be rising.
As CBS News reported, housing is unaffordable when mortgages or rent comprise 30 percent or more of a family’s income, and 9 million more households fell into that category in 2012 than did in 2002, a report from The Joint Center for Housing Studies at Harvard University found. What’s more, the poorer the family, the more likely it is to live in circumstances where housing costs demand a larger sum of monthly income: 82 percent of those earning less than $15,000 annually paid more than 30 percent in housing costs in 2012.
But the National Housing Trust Fund is aiming to lessen the burden.
Fannie Mae and Freddie Mac’s ability to support the fund will be like “turning on the spigot,” Rachael Myers, executive director of the Washington Low Income Housing Alliance, told ThinkProgress. And while it’s a far cry from an end-all, be-all answer to homelessness, the fund marks a shift in the federal government’s prioritizing of affordable housing.
“It does feel like the first step in moving the debate and moving the national government back into the business of creating affordable homes for extremely low-income people,” Myers told ThinkProgress.
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Fannie Mae And Freddie Mac May Help End Homelessness In America
