By Eugene T. Lowe
July 15, 2002

On July 10, the House Financial Services Committee approved a new dollar-for-dollar matching grant program for state and local housing trust funds. The new program is part of a larger bill, H.R. 3995, the "Housing Affordability for America Act of 2002, which would also reauthorize the HOPE VI severely distressed public housing program, the Housing Opportunities for Persons with AIDS (HOPWA) program, and the McKinney Act's homeless housing programs through 2004. H.R. 3995, authored by the housing subcommittee chair Marge Roukema (NJ) , was approved only after considerable controversy and lengthy debate, much of it revolving around the passage of a national housing trust fund program.

The controversy began on June 19 when the committee approved an amendment to H.R. 3995 by Representative Bernie Sanders (VT) to establish a new national housing trust fund program. The Sanders amendment, however, replaced Representative Roukema's original provision in the bill that would have created a new rental housing production/preservation component within the HOME program. When this happened the majority party was determined to get the Roukema's provision back into H.R. 3995 and the Sanders housing trust fund out. On July 10, when the markup of the housing bill continued, the Sanders trust fund was indeed stripped from the bill, but the new production program within HOME did not replace it. Instead, the matching grant program was approved, whThe Bereuter amendment, which was approved, opens up an interesting question concerning the entities eligible to receive a funding allocation. In the Kelly amendment, eligible entities include any public or private nonprofit or for-profit entity, unit of general local government, regional planning entity or any other entity engaged in development, rehabilitation, or preservation of qualified affordable housing.

The Bereuter amendment, which was approved, opens up an interesting question concerning the entities eligible to receive a funding allocation. In the Kelly amendment, eligible entities include any public or private nonprofit or for-profit entity, unit of general local government, regional planning entity or any other entity engaged in development, rehabilitation, or preservation of qualified affordable housing.

The bill notes that there are 280 local and 37 state trust funds spending approximately 500 million dollars each year. The program would provide money for these trust funds as well as for any new trust funds created. Seventy-five percent of the funds would have to be used for rental housing serving households at or below 30 percent of the area median. The other 25 percent could be used for rental housing or homeownership for families up to 80 percent of median.

In addition to the targeting of housing, the matching grant program would have many layers of requirements. Several certifications would be required such as projects being made available for Section 8 voucher holders, and that the projects will adhere to all requirements for at least 40 years. Moreover, the selection criteria for selecting projects must give preference to those which leverage non-federal funds; the extent of local assistance, including financial assistance; the extent to which the applicant has worked to reduce barriers to affordable housing; the extent of which the project promotes mixed income; the extent of employment opportunities for low-income families in the area in which the project is located. To be sure, these are just soThe bill also approved the administration's "American Dream Down payment Assistance "program, and stated that funding for the program would be new money and is not to be taken form the regular HOME program. In addition, the bill authorizes 5,000 Section-8 project-based vouchers to be used for rent subsidies for the production and preservation of housing for families at or below 30 percent of median income. FHA multifamily mortgage limits are also indexed to reflect the rising costs of building, land, and impact fees in the future.

The bill also approved the administration's "American Dream Down payment Assistance "program, and stated that funding for the program would be new money and is not to be taken form the regular HOME program. In addition, the bill authorizes 5,000 Section-8 project-based vouchers to be used for rent subsidies for the production and preservation of housing for families at or below 30 percent of median income. FHA multifamily mortgage limits are also indexed to reflect the rising costs of building, land, and impact fees in the future.