Chattanooga Times Free Press

Federal low-income housing grant doubles in size this year


Thanks to a coronaviru­s pandemic-fueled mortgage boom, states will get nearly $700 million in federal grants from a special program for low-income housing, more than double the amount distribute­d last year.

It’s a boost the Department of Housing and Urban Developmen­t says should produce a tangible leap forward in government lowincome housing plans across the country.

The Housing Trust Fund, administer­ed by the department, will disburse the money to state government­s for the constructi­on, maintenanc­e and restoratio­n of low-income housing. This year’s allotment is $689.6 million — more than double the $322.6 million disbursed the previous year, HUD said in a statement.

The grant increase is independen­t of President Joe Biden’s massive COVID-19 relief package and his equally massive infrastruc­ture proposal. But it falls in line with the general tone of Biden’s young presidency, which is responding to the pandemic by disbursing money across the nation in a manner that potentiall­y reshapes the social safety net.

“This past year has reminded us just how important it is to have access to safe and stable housing. But too many Americans are struggling to keep or find an affordable home,” HUD Secretary Marcia Fudge said in a statement.

Establishe­d in 2008, the Housing Trust Fund started making payments to state government­s in 2016, and is fueled by a sliver of the proceeds from the parallel federal mortgage programs, Fannie Mae and Freddie Mac. A HUD senior official said the original idea was to link strong performanc­e in one part of the housing market with increased help for those in vulnerable housing situations.

Interest rates fell to longtime lows last year, prompting a wave of mortgage refinancin­g in the midst of the pandemic.

The grants go directly to state government­s. Each state must use 80% of each annual grant for rental housing, up to 10% for homeowners­hip and the rest for administra­tive and planning costs. The fund can be used for acquisitio­n, new constructi­on, reconstruc­tion or rehabilita­tion of properties.

The HUD senior official, who spoke on condition of anonymity before the program had been officially announced, said many state housing agencies had been tracking the spike in mortgage activity and were already making plans for the funding boost before the actual numbers were announced.

The overall impact, the official said, will be to allow state housing authoritie­s to expand existing plans or move up projects that had been on the back burner awaiting funding.

Diane Yentel, president of the National Low Income Housing Coalition, said the economic upheaval brought on by the pandemic shined a spotlight on how many Americans were a few missed paychecks away from a personal housing crisis.

“The pandemic made it clear that housing is health care,” she said.

 ?? AP PHOTO/ANDREW HARNIK ?? Housing and Urban Developmen­t Secretary Marcia Fudge speaks at a news briefing at the White House on March 18.
AP PHOTO/ANDREW HARNIK Housing and Urban Developmen­t Secretary Marcia Fudge speaks at a news briefing at the White House on March 18.

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