FHFA Director Sued For Cutting Funding To National Housing Trust

Posted by Patrick Barnard on July 11, 2013 No Comments
Categories : Residential Mortgage

The National Low Income Housing Coalition (NLIHC), along with the Right to the City Alliance and four individual plaintiffs, has filed a lawsuit against Edward DeMarco, acting director of the Federal Housing Finance Agency (FHFA), alleging that he prevented government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac from contributing to the National Housing Trust Fund after they were transitioned into conservatorship in 2008.

‘The delay caused by the FHFA is unconscionable given the growing shortage of housing that is affordable for the lowest income Americans,’ said Sheila Crowley, president and CEO of the NLIHC, in a statement.

Established as part of the Housing and Economic Recovery Act of 2008, the National Housing Trust Fund was intended ‘to build, preserve, rehabilitate and operate rental housing that is affordable to the lowest income Americans.’ Originally, Fannie and Freddie were to transfer a portion of the value of their new business to the fund, however, DeMarco suspended that provision following the government takeover of the two GSEs, according to the coalition.

"The time has long past for Fannie Mae and Freddie Mac to be supporting the National Housing Trust Fund as Congress meant for them to do,’ Crowley said.

The coalition wants all of the suspended payments since the first quarter of 2012 applied to the Fund. Once that happens, the fund can begin to address the nationwide shortage of 7.1 million rental units for the country's poorest individuals and families.

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