While Thursday’s announcement that the Federal Housing Finance Agency is directing Fannie Mae and Freddie Mac to once again set aside funds for the Capital Magnet Fund and Housing Trust Fund was met with strong condemnation from Republicans and free market advocates, it is being hailed by affordable housing and community development advocates.
Some of the nation’s leading Community Development Financial Institutions, such as Capital Impact Partners, IFF, The Low Income Investment Fund and The Reinvestment Fund, have been pushing Congress to support the reinstatement of funding for the Capital Magnet Fund.
“We applaud the FHFA for funding the Housing Trust Fund and Capital Magnet Fund. The Housing Trust Fund is sorely needed to help address the growing crisis facing low-income renters,” said National Community Reinvestment Coalition President and CEO John Taylor. “This is the first of several steps the FHFA must take to make sure that Fannie Mae and Freddie Mac fulfill the public mission in their charters. We urge the FHFA to now adopt meaningful affordable housing goals to ensure broad access to mortgages for creditworthy borrowers."
Funding has been suspended since 2008 when the GSEs went into conservatorship.
“Capital Impact Partners commends the Federal Housing Finance Agency’s decision to support the Capital Magnet Fund,” said Terry Simonette, president and chief executive officer of Capital Impact Partners. “The Capital Magnet Fund is a unique program that will leverage private and public capital to address critical housing needs and create jobs in our country’s most underserved communities.”
In 2010, Congress appropriated $80 million for the program and the CDFI Fund made 23 awards to CDFIs and nonprofit housing organizations.
The CDFI Fund’s recent report on this first round of awards says they produced nearly 7,000 affordable homes and created or maintained over 5,700 construction and other full-time jobs.
“IFF is thrilled about the FHFA’s decision and that our advocacy efforts with Capital Impact Partners, LIIF and TRF have paid off,” IFF CEO Joe Neri said. “With this tool, we can attract significant amounts of private capital to housing projects in the communities where affordable options are needed most.”
Other advocates likewise lauded the decision.
“The Low Income Investment Fund joins its partners CIP, IFF and TRF in applauding the FHFA for reinstating funding for the Capital Magnet Fund. We are proud of our collective efforts to demonstrate the effectiveness and necessity of these funds,” said Nancy Andrews, president and CEO of LIIF. “The Capital Magnet Fund has proven to be a powerful tool for attracting private sector investment and expanding the availability of affordable housing in low-income communities.”
“The status quo for housing finance in low-income communities was unacceptable, and we thank FHFA Director Mel Watt for this directive,” said Don Hinkle-Brown, CEO of The Reinvestment Fund. “TRF is pleased that the government-sponsored enterprises will again fulfill their mission to help all Americans.”