FHFA Protects Funding to the National Housing Trust Fund

The Federal Housing Finance Agency (FHFA) announced that it would protect funding for the National Housing Trust Fund in 2018. The recently passed tax law made funding for the trust fund uncertain. The tax legislation caused a devaluation of Fannie Mae and Freddie Mac’s deferred assets, forcing the enterprises to take a draw from the Treasury. The Trust Fund is capitalized through contributions from Fannie and Freddie. However, under federal law, the FHFA director has the broad authority to suspend contributions to the Trust Fund if the contributions would have a negative impact on the financial stability of Fannie and Freddie.

In January, advocates urged FHFA to continue contributions from Fannie Mae and Freddie Mac to the Trust Fund making the case that the financial stability of Fannie and Freddie were not at issue under the unique circumstances caused by tax reform.

With FHFA’s decision to maintain the contributions, Fannie Mae and Freddie Mac are expected to provide nearly $269 million to the Trust Fund in 2018. Massachusetts should expect to receive a distribution from the National Housing Trust Fund in 2018.

In the past two years, Massachusetts has received $8 million from the Trust Fund. The Department of Housing and Community Development has used these funds the previous two years to fund affordable supportive housing.