NHTF Allocation Plan Guidance

HUD Issues Final Guidance to States

The U.S. Dept. of Housing and Urban Development (HUD) has posted its National Housing Trust Fund (NHTF) Allocation Plan guidance. Notice CPD-16-07 primarily restates the interim regulations, with a few exceptions.

The statute creating the NHTF requires that:

  • Each state must select a state entity, such as a housing finance agency or housing department, to receive NHTF money and administer the state’s NHTF program. Late last week HUD posted the final two state designations on its NHTF webpage and
  • That these designated entities draft a NHTF Allocation Plan, notify the public about it and provide for public comment – all following Consolidated Plan (ConPlan) public participation regulations.

In New Jersey, the NJ Department of Community Affairs has been selected as the NHTF grantee.

States are required to give priority in awarding NHTF money to applicant organizations based on six factors including geographic diversity. Unfortunately, HUD’s guidance does not help states concerned about how to comply with the geographic diversity requirement given that their 2016 NHTF allocation will likely be very modest (NLIHC estimates that most states will be receiving close to $3 million).

Another priority required is the length of time a NHTF-assisted unit will remain affordable. The Notice goes beyond the interim rule by adding,

“The funding priority in the NHTF allocation plan should consider how project underwriting supports the financial feasibility of the project beyond the required 30-year period.”

The notice directs states to revise the affordable housing section of the five-year Strategic Plan portion of their ConPlan. The revision must include specific objectives that describe the proposed housing accomplishments the state plans to achieve and specify the number of extremely low income families, as defined in the NHTF rule, for whom it will provide affordable housing over a specific period of time.

NLIHC Overview of Guidnace

HUD Notice