Two days ago The National Low Income Housing Coalition released this promising news out of the Senate Banking Committee:
Senate Banking Committee Chair Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) released the legislative text of their bipartisan housing finance reform proposal. The bill as drafted would provide the most significant new investment in rental housing affordable to America’s neediest families in forty years. It could provide over $3.5 billion a year for the National Housing Trust Fund.
Getting into the weeds of the bill:
The Johnson-Crapo bill, which builds on the framework developed by Senators Mark Warner (D-VA) and Bob Corker (R-TN), would wind down Fannie Mae and Freddie Mac and create the new Federal Mortgage Insurance Corporation (FMIC) to regulate the secondary mortgage market, similar to the way the FDIC regulates banks.
All FMIC covered securities will be assessed ten basis points to be used to fund affordable housing activities. The total fund could be as high as $5 billion annually. The draft bill calls for 75% to go to the National Housing Trust Fund and 15% to the Capital Magnet Fund. Both were created in 2008 and were to be funded by an assessment on Fannie Mae and Freddie Mac, which was suspended before it could be implemented. The remaining 10% would go to a new Market Access Fund provided for in the draft bill.
The LA Times reports that the White House is supportive, but House Republicans are looking to replace Fannie and Freddie with a private sector solution.
We’ll know more in the beginning of April when the committee is expected to take up the bill prior to the congressional recess.
And learn more about the National Housing Trust Fund at: www.nhtf.org