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HOUSING Aug-4-2008 (830 words) With photo. xxxn
New national Housing Trust Fund to help low-income Americans
By Mark Pattison
Catholic News Service
WASHINGTON (CNS) -- Wrapped inside the foreclosure relief bill passed by Congress to help hard-pressed homeowners was legislation to help similarly hard-pressed renters.
The creation of a national Housing Trust Fund was included in the Housing and Economic Recovery Act of 2008, signed July 30 by President George W. Bush.
The amount to be set aside for the fund this year -- $300 million -- is modest compared to the billions at stake in the foreclosure relief provisions of the law, but it was seen as welcome relief by housing advocates.
"The (U.S.) bishops' conference has worked for years to enact a national Housing Trust Fund because affordable housing is vitally important to the stability and sustainability of families and communities throughout the country," said an Aug. 1 statement by Bishop William F. Murphy of Rockville Centre, N.Y., chairman of the bishops' Committee on Domestic Justice and Human Development.
"Many other bishops and I have supported initiatives of this sort in our own communities," he added. "I am pleased to see this national effort succeed and become a possible model for state and local efforts."
Greg White, housing policy analyst for the Washington-based National Low-Income Housing Coalition, said in an Aug. 4 telephone interview with Catholic News Service that the lion's share of the money for the fund will come off the top from Fannie Mae and Freddie Mac based on the amount of business they do.
Both entities are federally chartered institutions. The first is the Federal National Mortgage Association, which helps provide money for home mortgages; the second, the Federal Home Loan Mortgage Corp., provides money for mortgages by buying mortgages from lenders such as banks.
And while both institutions have had their own financial woes of late, White said the fund is not harmed since the revenue doesn't come out of their profits.
In fact, White said, he expected more money to come into the trust fund down the road.
"As there are fewer options out there in terms of the mortgage market -- most subprime lenders are out of business now -- the new business for Fannie and Freddie will expand over the next few years," he said.
He predicted that up to $900 million could come from Fannie Mae and Freddie Mac. The legislation also permits the trust fund to pursue additional funding sources.
Ninety percent of the fund's initial $300 million would help preserve, rehabilitate, build and operate about 3,400 units of rental housing, according to White. The other 10 percent is reserved for first-time homebuyer help.
The federal Department of Housing and Urban Development will make grants to states, which then will distribute the money to qualified groups to build and operate affordable rental housing for low-wage earners and low-income elderly and disabled people.
Adam Gaeddert, a policy advocate for the National Coalition for the Homeless, said the foreclosure crisis worsened the homelessness situation, but told CNS in an Aug. 4 telephone interview the situation has been bad for 20 years.
"Enough affordable homes simply do not exist," Gaeddert said. "While there's been no single comprehensive study on the topic, there have been many smaller studies that have given every indication that the foreclosure crisis has had a negative impact on homelessness," he added.
If there is a silver lining to be found in the foreclosure crisis, Gaeddert said, it's that "it's brought homelessness into the national debate." A HUD report to Congress in July estimated that on a single night in January 2007, there were 671,888 homeless people in the United States.
"Seriously tackling the problem of homelessness is going to require taking a look at living wages adjustable to the cost of housing for every working American and will have to require a solution that allows every American to have health insurance," he said.
"Too many times people have to choose between ... paying for the next meal or putting a roof over their heads. When people start having to make that choice too often they wind up in the shelter system or, worse yet, they wind up in the streets," he said.
"Because of a housing slowdown and a foreclosure increase, we've got more families competing for rental housing in a stagnant development market," said Chris Estes, executive director of the North Carolina Housing Coalition, in an Aug. 4 telephone interview with CNS.
The elderly, people with disabilities and those trying to escape homelessness have been "especially hard-hit," he added. The poor once had a safety net through Section 8 housing vouchers, "but those are almost impossible to come by these days," Estes said. "They're trapped."
Poor families have headed out of North Carolina's large cities into less densely populated areas where housing was cheaper, he said. But, he added, "this has been made worse by rising gas prices," making it harder for people to find places close to where they want to live with access to work.
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Copyright (c) 2008 Catholic News Service/USCCB. All rights reserved.
This material may not be published, broadcast, rewritten or otherwise distributed.
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