National Housing Trust Funds Remain Essential Source of Gap Financing

Date Published: 
September 14th, 2022

The National Low Income Housing Coalition (NLIHC) issued a new report to document the impact of the $219 million allocated in 2017 to each state and the District of Columbia by the national Housing Trust Fund (HTF). The national HTF provides block grants to states to build, preserve, or rehabilitate housing affordable to extremely low-income households – those with income at or less than 30% of the area median income (AMI), or at or less than the federal poverty line (whichever is greater). The statute authorizing the HTF requires 90% of any funds awarded to a state to be used for rental housing.

NLIHC’s latest report expands upon prior research that examined early allocations of HTFs and found that, in 2016, states were utilizing most of their HTF resources to target projects that serve people experiencing homelessness, people with disabilities, elderly people, or other special-needs populations. NLIHC detailed in its new report that, as in 2016, states continued in 2017 to utilize most of their HTF resources to target vulnerable populations. For example, 26% was to be devoted to projects serving homeless households, 23% to projects serving people with disabilities, 19% to projects serving elderly people, 8% to projects serving veterans, and 2% to projects helping to house domestic violence survivors or previously incarcerated people. The remaining 22% of funds were devoted to projects in the category of “general occupancy” or “family."

NLIHC also reports that 43 states allocated some or all their 2017 HTF funds, amounting to $144,049,700, for 118 new construction projects estimated to have 1,154 HTF-assisted units among 6,525 total units. The HTF was used as gap financing for 123 projects also using the Low-Income Housing Tax Credit (LIHTC) program’s equity investments in 2017, meaning that some units in LIHTC projects will serve extremely low-income households.

The reports concludes that the HTF “remains an essential source of gap financing,” used in conjunction with the HOME Investment Partnerships Program (HOME), the Federal Home Loan Banks’ Affordable Housing Program (AHP), and other state affordable housing programs, including state or local Housing Trust Funds.


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