WASHINGTON (AP) – Due to the epidemic mortgage boom, states will receive a nearly $ 700 million federal grant from a special low-income housing program, double the amount distributed last year.
This is a stimulus that the Department of Housing and Urban Development says should make a significant leap forward in the country’s low-income government programs.
The Housing Trust Fund, run by the department, will transfer the money to state governments to build, maintain, and restore low-income housing. This year’s grant is $ 689,565,492, more than $ 322,564,267 last year, according to a HUD statement.
The grant increase is independent of President Biden’s COVID-19 stimulus bill and his proposal for an equally massive infrastructure package. But this coincides with the general tone of Biden’s young presidency, which is responding to the epidemic by providing money to the entire nation through a potential transformation of the social security network.
“This past year has reminded us of the importance of access to safe, sustainable housing. “But too many Americans are struggling to keep or find an affordable home,” said HUD Secretary Marcia Fadge.
Founded in 2008, the Housing Trust Fund began making payments to state governments in 2016, feeding on a portion of federal mortgage proceeds, including Fannie Mae and Freddie Mac. A senior HUD official said the initial idea was to link strong performance in some parts of the housing market to increased assistance to those in vulnerable housing.
Interest rates fell to a long-term low last year, sparking a wave of mortgage refinancing amid an epidemic.
Grants are awarded directly to state governments. Each state must use 80% of each annual grant for rental housing, up to 10% for home ownership, and the rest for administrative and planning costs. The fund can be used for property acquisition, new construction, reconstruction or restoration.
A senior HUD official, speaking on condition of anonymity before the plan was officially announced, said many state-owned housing agencies were lagging behind in mortgage growth and were already making plans to raise funding before the actual figures were announced.
According to the official, the overall impact will be to allow state housing authorities to expand existing projects or relocate projects that have been delayed until funding.
Diane Yentel, president of the National Coalition for Low-Income Housing, says the economic turmoil caused by the epidemic has focused on how many Americans are missing out on personal wages from the personal housing crisis.
“It became clear from the epidemic that housing is health care,” he said. “These are very necessary resources to build and maintain housing in our most vulnerable areas.”
Yentel said the Housing Trust Fund got off to a good start in its first few years. But he and other housing advocates are pushing for the program to be scaled up, lobbying Congress to raise up to $ 40 billion a year.