National Affordable Housing Trust Fund Act of 2007

Floor Speech

NATIONAL AFFORDABLE HOUSING TRUST FUND ACT OF 2007 -- (House of Representatives - October 10, 2007)

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Ms. JACKSON-LEE of Texas. Mr. Chairman, I rise today in strong support of H.R. 2895, the National Affordable Housing Trust Fund Act of 2007. I would like to thank my distinguished colleague, the chairman of the Financial Services Committee, Mr. FRANK, for introducing this legislation, as well as for his leadership in bringing this important issue to the floor.

Mr. Chairman, in recent months we have seen a crisis in subprime mortgage lending, which has threatened the stability of the housing market and the livelihoods of large numbers of Americans. This Democratic Congress is committed to strengthening the housing market and stabilizing the economy, and this legislation is an important step toward these important goals.

Because of the lack of regulation by the Federal Government, many loans were accompanied by fraud, inadequate information and other failures of responsible marketing. With exceptionally high (and rising) foreclosure rates across the country, homeowners all over America are losing their homes. Homeowners are surprised to find out that their monthly payments are spiking and they are struggling to make these increasingly high payments.

The sub-prime mortgage crisis has impacted families and communities across the country. Home foreclosure filings rose to 1.2 million in 2006--a 42 percent jump--due to rising mortgage bills and a slowing housing market. In Iowa, 3,445 families experienced foreclosure last year, up 64 percent from 2005. Nationally, as many as 2.4 million sub-prime borrowers have either lost their homes or could lose them in the next few years. I commend the Democratic-led House Financial Services Committee for its work on this issue, toward achieving a balanced solution that helps stabilize the mortgage market, stops abuses, preserves access to credit, and aids stable homeownership.

H.R. 2895 establishes a National Affordable Housing Trust Fund to build or preserve 1.5 million homes or apartments over the next 10 years, and it does so without increasing Government spending or the Federal deficit. This legislation is a fiscally responsible way of expanding affordable housing and mortgage loan opportunities for families at risk of foreclosure, while also strengthening consumer protections against future risky loans. H.R. 2895 initially allocates between $800 million and $1 billion annually, funded through Fannie Mae and Freddie Mac. This funding is given directly to States and local communities, and is targeted to be used for the construction of affordable housing and support for lower income families, who face the greatest housing affordability challenges.

Mr. Chairman, 17 million households, or one in seven, spend more than 50 percent of their income on housing. On any given night, approximately 750,000 men, women, and children are homeless. Constructing more affordable housing is necessary to help families who have lost their homes in the subprime mortgage crisis or due to a family financial crisis, such as illness or job loss. It will also make significant strides toward reducing homelessness and the number of Americans living in unsafe housing conditions.

The National Affordable Housing Trust Fund, established by this legislation, must be used for low- and moderate-income families, or those below 80 percent of State or local median income. At least 75 percent of funds must go to extremely low-income families, who are below 30 percent of median income. This legislation also helps the families of our Nation's nurses, teachers, firefighters, and police officers by reserving 10 percent of trust fund money for families who earn between 50 and 80 percent of the national median income. H.R. 2895 allows these funds to be used for construction, rehabilitation, acquisition, preservation incentives, and operating assistance to facilitate affordability. These funds may be used for both affordable rental housing and for down payment and closing cost assistance by first-time homebuyers.

Mr. Chairman, provisions in this legislation ensure equitable distribution of funds across our Nation. Of these funds, 60 percent will go to participating local jurisdictions, and 40 percent will go to States, Indian Tribes, and insular areas. All grantees will be required to make funds available in rural areas, proportionate to identified need in such areas. Eligible recipients of these funds can be any organization, agency, or other entity that has demonstrated the experience and the capacity to carry out the proposed trust fund activity, including for-profits, nonprofits, and faith-based organizations. Funds may not be used for administrative costs or expenses, political activities, advocacy, lobbying, counseling, travel expenses, and preparation of or advice on tax returns. Grantees are required to develop systems to ensure program compliance and oversight.

In my home district in Houston, homelessness remains a significant problem. Houston's homeless population increased to approximately 14,000 in 2005, before Hurricanes Katrina and Rita, and hurricane evacuees remaining in the Houston area could result in the homeless population increasing by some 23,000. Approximately 28 percent of homeless Americans are veterans.

In August, I, in coordination with the Texas Department of Housing and Community Affairs, hosted a workshop on the introductory concepts and considerations in applying for Housing Tax Credits in Texas. This workshop was designed to create new incentives for developers to expand business opportunities in housing development, as well as to generate a significant increase in the availability of low-income and affordable housing for the residents of Houston and Harris County. I believe that an increase in affordable housing and job opportunities will help reduce the high rates of homelessness among Houston residents.

Mr. Chairman, the 110th Congress has already demonstrated its commitment to moving America in a new direction. This includes strengthening the housing market and stabilizing the economy, particularly after the recent subprime mortgage crisis. This legislation is an important step toward expanding affordable housing and mortgage opportunities for American families.

I strongly urge my colleagues to join me in supporting this important legislation.

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