Treasury Secretary Steve Mnuchin Testifies Before Senate Banking Committee

Steve Mnuchin: HTF funding Could be Jeopardized if Fannie Mae or Fannie Mac Draws from the Treasury

On May 18, 2017, Treasury Secretary Steve Mnuchin testified before the Senate Banking Committee that the Trump administration would take up housing finance reform in the second half of the year.

He said that at that time, the administration will put forward a clear outline of its recommendations, and that they plan to reach out to different stakeholder groups, including consumers, mortgage bankers, and realtors, for their input. He stressed that reforming the housing finance system will require a bipartisan effort.

Mr. Mnuchin said that Treasury and the Federal Housing Finance Agency (FHFA), the federal conservator of Fannie Mae and Freddie Mac, were not working together to prevent the mortgage giants from needing to take another draw from the government.

Mr. Mnuchin said that the Treasury was committed to working with FHFA and Congress to reform the housing finance system. He added that the administration supports the shareholder agreement that requires all of Fannie and Freddie’s profits be “swept” into the Treasury as dividends to the taxpayers, reducing Fannie and Freddie’s capital buffers.

The national Housing Trust Fund is funded by a small annual assessment on Fannie and Freddie’s new book of business each year. The HTF’s funding could be jeopardized if, and when, one or both of the entities needs an additional draw from Treasury.  

The national Housing Trust Fund is the first new housing resource in a generation. It is exclusively targeted to help build, preserve, and rehabilitate housing for people with the lowest incomes.

In 2016, the first $174 million in Housing Trust Fund dollars were allocated to states. This is an important step, but far more resources are needed.

In advance of the first allocations of the national Housing Trust Fund (HTF), NLIHC is working with leaders in each state and the District of Columbia who will mobilize advocates in support of HTF allocation plans that benefit ELI renters to the greatest extent possible. The New Jersey Department of Community Affairs is the state designated agency.

Our previous article provides options to Protect and Expand the National Housing Trust Fund.

More About the Hearing

National Housing Trust Fund

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