National Housing Trust Fund (NHTF)
Capital Magnet Fund (CMF)
CARH 2015 Annual Meeting & Legislative Conference
June 15, 2015
Offering Financial Advice and
Solutions to Health Care, Senior
Living, and Housing Providers.
National Housing Trust Fund
- Created as part of the Housing and Economic Recovery
Act of 2008 (HERA)
- On 12/11/14 the Federal Housing Finance Agency (FHFA)
directed Fannie Mae and Freddie Mac to begin allocating
funds equal to 4.2bps of their business volume. 48.75%
goes to NHTF and 26.25% to the Capital Magnet Fund.
These are dedicated funds, not subject to appropriations
- States are expected to receive the NHTF allocations in the
summer of 2016. Distributed as block grants by formula
- NHTF will use the HUD HOME regulations where the
NHTF statute does not prescribe specific features
- Program targets ELI renters (greater of 30% AMI or the
federal poverty level)
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Financing Progress
National Housing Trust Fund
- In years where < $1B states must use 80% of their
allocation on ELI renters with no more than 10% going
toward home ownership. Up to 10% may be used for a
state’s administration and planning costs.
- In years where > $1B states must use at least 75% on ELI
rental; no more than 25% VLI rental with no more than
10% ELI going toward home ownership.
- States must select a state agency that will receive and
administer the funds. Each state must prepare a
Consolidated Plan of which the NHTF Allocation Plan is a
part of. “Subgrantees are allowed. 21 states have
designated an administering agency
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Financing Progress
National Housing Trust Fund
- States to “commit” (expected to begin construction or
rehab with one year) funds within 2 years. Uncommitted
funds are recaptured by HUD and reallocated to other
states. Funds must be spent in 5 years.
- Affordability is 30 years with the states having the option
to extend that term
- States can use 1/3 of their annual allocation to be used
for operating cost assistance. Allows for upfront funding
for financial feasibility for the entire affordability period.
- Unofficially HUD has indicated NHTF does not trigger
Davis-Bacon
- NHTF may be loans, grants, interest subsidy, equity
investments, other
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Financing Progress
National Housing Trust Fund – Key Differences from HOME
- Income Targeting:
- NHTF: 75% of funds must benefit ELI renters (30% AMI)
- HOME: 90% of rental units must benefit at incomes at or below 60% AMI
- Eligible Activites:
- NHTF: 90% of funds directed at rental housing; 10% to home ownership
- HOME: wider range of uses and no limits on how much can be used for
home ownership versus rental
- Funding:
- NHTF: dedicated source of funding on the mandatory side of the federal
budget and is not subject to annual appropriations
- HOME: receives funding through annual appropriations
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Financing Progress
National Housing Trust Fund – What Can We Do
- Contact governors as to which state agency should
administer
- Comment on the Allocation Plan before it is finalized
- Make sure ELI and VLI people are aware of the Allocation
Plan process
- Make sure rural areas are considered as well as those of
metro areas
- Advocate at the national level for dedicated funding
- www.nhtf.org
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Financing Progress
Capital Magnet Fund
- Created as part of the Housing and Economic Recovery
Act of 2008 (HERA)
- On 12/11/14 the Federal Housing Finance Agency (FHFA)
directed Fannie Mae and Freddie Mac to begin allocating
funds equal to 4.2bps of their business volume. 48.75%
goes to NHTF and 26.25% to the Capital Magnet Fund.
These are dedicated funds, not subject to appropriations
- Administered by the Treasury Department’s Community
Development Financial Institutions (CDFI) Fund as
opposed to HUD
- Grants to CDFI’s and nonprofit housing organizations
through a competitive process.
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Financing Progress
Capital Magnet Fund
- Used for affordable housing as well as related economic
development and community service facilities (day care
centers, workforce development center, health care
clinics, etc
- Has only had one round of funding and that was in 2010
for $80M (legislation creating the CMF allowed it to be
capitalized through regular appropriations)
- In that round there were 230 applicants. 13 non-profit
housing developers, 9 CDFI’s and on tribal housing
authority were awarded
- Each dollar of CMF attracted over $12 in other capital
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Financing Progress
Capital Magnet Fund
- 70% of CMF must be used for housing. If CMF finances
rental housing then at least 20% of the units at or below
80% AMI with the rest at or below 120% AMI
- Affordability requirement is 10 years
- Like HOME the CMF has a wider range of uses and has
no limits on how much can be used for home ownership
versus rental
- www.cdfifund.com
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Financing Progress