Housing Trust Fund Allocations will increase and preserve the supply of decent, safe, and sanitary affordable housing for extremely low- and very low-income households.
On May 3, the U.S. Department of Housing and Urban Development (HUD) announced the allocation of $382 million to states through the Housing Trust Fund (HTF) to complement existing federal, state, and local efforts that aim to increase and preserve the supply of decent, safe, and sanitary affordable housing for extremely low- and very low-income households, including families experiencing homelessness. Texas was the third biggest recipient of HTFs, with an allocation of $22.4 million.
The Housing Trust Fund is a formula-based program for states and U.S. territories. The funds are financed through fees paid by Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs), on new mortgage guarantees that they make. By law, each state is allocated a minimum of $3 million. Eligible activities include real property acquisition, site improvements and development hard costs, related soft costs, demolition, financing costs, relocation assistance, operating cost assistance for rental housing (up to 30% of each grant), and reasonable administrative and planning costs. One hundred percent of funds must be used for extremely low-income families. This targeting ensures the priority of this program is helping those with the greatest needs.
This year’s total HTF allocation is a significant reduction from the 2022 allocation of $749 million. Last year, Texas received $47.4 million in HTFs which is more than double the amount allocated for 2023. This is probably due to a significant drop in single-family mortgage loan and refinancing purchases by the Government Sponsored Entities (GSEs) in 2022 as a result of the Federal Reserve Board’s decision to raise interest rates repeatedly in 2022 to fight inflation.
The Texas Department of Housing and Community Services (TDHCA) has not yet released a NOFA regarding the $22.4 million in National Housing Trust Funds.