Frank Unveils AH Fund Details

House Financial Services Committee Chairman Barney Frank, D-Mass., has introduced legislation that fleshes out the details of how his affordable housing trust fund would distribute $800 million to $1 billion in grants annually.Rep. Frank said he plans to finance the trust fund with mandated contributions by Fannie Mae and Freddie Mac, savings from Federal Housing Administration reforms, revenues from the Expanding Americans' Home Ownership Act, and possibly other sources. (The House has already passed government-sponsored enterprise reform legislation that would require Fannie and Freddie to contribute $600 million, and the committee has approved an FHA bill expected to generate nearly $500 million in new revenues, mainly by expanding the FHA reverse mortgage program.) The fund would provide grants for the construction and rehabilitation of affordable housing for low-income families, with 60% allocated to local communities and the remainder to states, insular areas, and American Indian tribes. The Department of Housing and Urban Development would be required to develop an allocation formula based on factors such as population, housing affordability, percentage of very and extremely low-income families, and cost of construction. Rep. Frank said he plans to hold hearings on the trust fund bill on July 12.