HUD Publishes Housing Trust Fund State Allocations

HUD recently published the state-by-state 2016 allocations for the Housing Trust Fund (HTF). The total 2016 HTF funding is approximately $174 million. The HTF is an affordable housing production program that’s intended to complement existing federal, state, and local efforts to increase and preserve the supply of decent, safe, and sanitary affordable housing for extremely low- and very low-income households, including homeless families. It was established under Title I of the Housing and Economic Recovery Act of 2008, Section 1131 (Public Law 110-289). Section 1131 of HERA amended the federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) to add a new Section 1337, entitled “Affordable Housing Allocation” and a new Section 1338, entitled “Housing Trust Fund.”

Pursuant to the HTF Interim Rule, state allocations are determined by a formula based on four factors: (1) a state’s relative shortage of rental housing available nationwide to extremely low-income (ELI) families—that is, persons with incomes at 30 percent of area median income (AMI) or less; (2) a state’s relative shortage of rental housing available nationwide to very low-income (VLI) families—that is, persons with incomes at 50 percent of AMI or less; (3) a state’s relative number of ELI renter households living in substandard, overcrowded, or unaffordable units in that state; and (4) a state’s relative number of VLI renter households living in substandard, overcrowded, or unaffordable units in that state. In addition, construction costs in each state are factored into the formula. The HTF statute establishes a $3 million minimum allocation for each of the 50 states and the District of Columbia.

To be eligible to receive HTF funds, states must prepare and submit their HTF allocation plans by August 16, 2016. The HTF Allocation Plan must set forth the criteria for the selection of applicants based on factors including geographic diversity, applicant capacity, the extent to which the project has project-based rental assistance, duration of affordability, priority housing needs of the state, use of non-federal funding sources, eligible activities, and other priorities detailed in HUD Notice CPD-16-07. This recently issued notice provides guidance to HTF grantees on the submission requirements for Fiscal Year (FY) 2016 HTF Allocation Plans. The notice also details the process by which HUD will review and approve or disapprove of HTF allocation plans.