	Introduction

The Housing Trust Fund (HTF), administered by the Department of Hous ing and Urban Development (HUD ) , provides formula funds to states to use for certain affordable housing activities. The HTF was established by the Housing and Economic Recovery Act of 2008 (HERA, P.L. A majority of funds must be used to benefit extremely low-income households (households with incomes at or below 30% of area median income), and all funds must be used for extremely low- or very low-income households (households with incomes at or below 50% of area median income). Rather than being funded through appropriations, the Housing Trust Fund (along with the Capital Magnet Fund, another new affordable housing fund established by HERA) is funded through contributions from two government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. After its creation in 2008, the HTF did not receive any funding for several years. In September 2008, there were concerns about Fannie Mae's and Freddie Mac's finances. In November 2008 FHFA suspended Fannie Mae's and Freddie Mac's contributions to the affordable housing funds before any had been made. Background

Many states and localities across the nation have created housing trust funds, which provide dedicated sources of state or local funding for affordable housing activities. 110-289 ) was enacted. However, because these contributions were suspended for several years, the Housing Trust Fund received its first funding in 2016. To date, no other source of funding has been provided to the HTF. By statute, the formula for allocating funds to states is based on the following factors:
the ratio of the shortage of standard rental units affordable and available to extremely low-income renter households in a given state to the aggregate shortage of such rental units in all states (this factor is given "priority emphasis"); the ratio of the shortage of standard rental units affordable and available to very low-income renter households in a given state to the aggregate shortage of such rental units in all states; the ratio of extremely low-income renter households living with incomplete kitchen or plumbing facilities, more than one person per room, or spending more than 50% of income on housing costs in a given state to the aggregate number of such households in all states; and the ratio of very low-income renter households spending more than 50% of income on rent in a given state to the aggregate number of such households in all states. By law, at least 80% of HTF funds must be used for rental housing activities. ELI households are defined as households with incomes that do not exceed 30% of area median income, and VLI households are defined as having incomes no higher than 50% of area median income. The total amount transferred to the HTF was $174 million. Current Issues

This section discusses current issues related to the Housing Trust Fund, namely, arguments that are commonly made for and against the Housing Trust Fund; the current status of Fannie Mae and Freddie Mac and its potential implications for the Housing Trust Fund; legislative proposals that would provide additional funding to the Housing Trust Fund; and legislative proposals that would limit funding for the Housing Trust Fund or eliminate the program entirely. Arguments Made For and Against a National Housing Trust Fund

The idea of a national affordable housing trust fund has been controversial. Supporters have advocated for such a fund for years, arguing that it is needed to address a shortage of affordable housing for extremely low-income households. Finally, since it was announced that Fannie Mae and Freddie Mac would be beginning their contributions to the Housing Trust Fund and the Capital Magnet Fund, some have criticized the decision to require Fannie Mae and Freddie Mac to make contributions to the housing funds while they remain in conservatorship and subject to agreements with Treasury. Efforts to Eliminate or Limit Funding for the HTF

As noted earlier, some in Congress criticize the Housing Trust Fund as being duplicative of other programs or express concerns that it is funded outside the appropriations process or could be vulnerable to misuse.
The Housing Trust Fund (HTF) was established by the Housing and Economic Recovery Act of 2008 (HERA, P.L. 110-289) to provide funds to states to use for affordable housing activities, with a focus on producing rental housing for extremely low-income households. It is administered by the Department of Housing and Urban Development (HUD) and funded through contributions from two government-sponsored enterprises, Fannie Mae and Freddie Mac, rather than through appropriations. Due to concerns about Fannie Mae's and Freddie Mac's financial position, their contributions to the HTF were suspended for several years before the program had ever received any funding. More recently, however, their contributions to the HTF have begun. The first funding was transferred to the HTF in early 2016.
In general, affordable housing trust funds provide dedicated, permanent sources of funding for affordable housing that do not require annual appropriations. Many states and localities across the United States have their own affordable housing trust funds, and for years affordable housing advocates had worked to get such a fund created on a national level. Opponents of a national affordable housing trust fund argued, among other things, that it would be duplicative of other affordable housing programs.
The Housing Trust Fund created by HERA provides funding for formula-based grants to states to use for affordable housing activities. By statute, most of the funding must be used for rental housing; states can use up to 10% of their grants for certain homeownership activities. Furthermore, all of the funds must benefit very low- or extremely low-income households, with at least 75% of the funding for rental housing being used exclusively for the benefit of extremely low-income households (defined as households with incomes that do not exceed 30% of area median income) or households with incomes no greater than the federal poverty line.
In the years since the HTF was established, supporters of the Housing Trust Fund have searched for additional sources of funding for the program, and have argued for the beginning of Fannie Mae's and Freddie Mac's contributions to the Housing Trust Fund as those entities returned to profitability. (The contributions began in 2015, with the first funds transferred to the HTF in 2016.) At the same time, policymakers who oppose the Housing Trust Fund have made efforts to repeal it or to prevent Fannie Mae and Freddie Mac from contributing to it while they remain in conservatorship. In recent Congresses, legislation has been introduced to fund the HTF through alternate sources, as well as to eliminate it entirely. The HTF has also been debated in the context of broader housing finance reform efforts, which are largely concerned with proposals for how to reform, eliminate, or replace Fannie Mae and Freddie Mac. However, no legislation to either fund the HTF through a different source or to eliminate it entirely has been enacted to date.