FHFA announced that the Housing Trust Fund and Capital Magnet Fund will receive approximately $301 million for affordable housing initiatives from Fannie Mae and Freddie Mac (the Enterprises). This is a 45 percent decrease from last year’s $545 million allocation.
“Affordable housing is one of the greatest challenges facing communities across the country today,” said FHFA Director Sandra L. Thompson. “A portion of every loan purchased by the Enterprises is allocated to the Housing Trust Fund and the Capital Magnet Fund, which provide resources that increase affordable housing options in our communities.”
The Housing Trust Fund, overseen by HUD, will receive $196 million, compared to $354 million last year. The Housing Trust Fund allocates funding annually to states and state-designated entities for the production or preservation of affordable housing through the acquisition, new construction, reconstruction, and/or rehabilitation of non-luxury housing.
The Capital Magnet Fund, overseen by the U.S. Department of the Treasury, will receive $191 million, compared to $191 million last year. The Capital Magnet Fund competitively awards money to finance affordable housing activities, as well as related economic development activities and community service facilities.
By law, amounts allocated to these funds are based on the Enterprises’ new business purchases. Market conditions in 2023, including elevated interest rates, reduced the Enterprises’ total new business purchases compared to the previous year.