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President Bush Signs Kerry Affordable Housing Trust Fund Into Law

Press Release

Location: Boston, MA


Trust Fund, 3 other Kerry provisions will help thousands of Massachusetts homeowners survive declining housing market

Senator John Kerry issued the following statement on the Housing Bill signed into law today by President Bush. The bill contains four key provisions, introduced by Kerry, which will help thousands of Massachusetts homeowners survive the nation's unstable housing market.

One of the provisions included in the bill establishes a National Affordable Housing Trust Fund, which requires Fannie Mae and Freddie Mac to set aside a portion of their profits of which, 65 percent will be used for the Housing Trust Fund (approximately $3.4 billion over ten years), and 35 percent will go toward a Capital Magnet Fund to leverage affordable housing development and community development activities. Senator Olympia Snowe (R-Maine) introduced the bill along with Kerry.

In 2000, Kerry wrote the first National Affordable Housing Trust Fund legislation to construct, rehabilitate, and preserve 1.5 million units of housing over the next 10 years.

"For too long, our nation's poorest citizens have gotten the short of the stick when it comes to housing. By establishing the National Affordable Housing Trust Fund we will help our most vulnerable families live in decent, safe and affordable rental housing," said Senator Kerry. "Foreclosures are devastating thousands of families across Massachusetts each and every day and this housing bill will finally help them stay in their homes and help put our economy on the road to recovery."

"The National Housing Trust Fund campaign began under Senator Kerry's leadership when he introduced a bill to establish a National Affordable Housing Trust Fund in 2000. With the enactment of the Housing and Economic Recovery Act of 2008 today, together we have achieved success. The result is a renewed commitment by the Federal government to solving the housing problems of the very poorest families in our nation, who have been overlooked and neglected for too long," said Shelia Crowley, President and CEO of the National Low Income Housing Coalition.

Three other key provisions introduced by Senator Kerry were also included bill:

* Kerry worked with Senator Gordon Smith (R-Oregon) to include the Mortgage Revenue Bond Provision, which provides an additional $11 billion of tax-exempt private activity bonds to housing finance agencies. The provision would allow the proceeds from the bonds to be used to refinance subprime loans, provide mortgages for first time homebuyers and for multifamily rental housing. This means that approximately $209 million in targeted mortgage relief will be available to the homeowners of Massachusetts, which could result in as may as 1,000 new loans in Massachusetts. Nationwide this would result in close to 87,000 additional loans.
* The bill also contains provisions to amend the Service Members Civil Relief Act (SCRA) by extending the period a lender must wait before starting disclosure procedures from 90 days to nine months after a service member has returned from active duty and capping interest on mortgages at 6 percent for one year after a serviceperson completes his/her services.
* The bill includes $3.92 billion for the Community Development Block Grant (CDBG) program which will help local communities fight the effects of foreclosure. Earlier this year, Kerry, along with Senator Edward Kennedy, sent a letter to the Senate leadership underscoring the need for $2 billion in additional funding for CDBG in the upcoming housing legislation.

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