As Americans prepare to head to the polls in the fall, one subject will be on the mind of almost every voter in November: housing. As the country faces an affordability crisis and a historical lack of housing inventory, bold solutions are necessary to fix our current housing market.
In June, the Treasury Department put another marker down in the Biden administration’s plans to help lower housing costs. In remarks from Minneapolis, Minnesota, U.S. Treasury Secretary Janet Yellen presented five new National Association of REALTORS® (NAR)-supported proposals to assist the housing market.
Secretary Yellen first unveiled a new $100 million fund. This fund will be dispersed over three years to the Community Development Financial Institutions (CDFI) Fund, which will assist in financing thousands of new affordable housing units.
Second, Secretary Yellen detailed a plan that would reduce the costs of state and local housing finance agencies and allow them to borrow funds at the same rate as the federal government. This will enable the housing agencies to offer FHA-insured multifamily loans at more desirable interest rates.
Next, the Secretary called on the 11 Federal Home Loan Banks (FHLBs) to devote 20% of their net income to housing programs. The FHLBs recently committed to increasing their allocation to 15%. NAR has been a vocal proponent of using more FHLB funds to assist with affordable housing, both in new construction and through consumer-focused initiatives, such as down payment assistance.
The Treasury Department is also updating an “Affordable Housing How-To Guide” that will give states and localities additional guidance about how to use COVID-era recovery funds to help the supply of housing. Treasury notes that fund recipients have already aided over 25,000 housing units in construction, preservation and stabilization.
Lastly, the Secretary announced updates to a rule for the Capital Magnet Fund. Treasury hopes this important affordable housing investment plan will reduce administrative burdens and focus their time and capital on producing and maintaining affordable housing.
With home prices reaching another historical high in May, NAR continues to advocate fiercely for solutions to the current affordability crisis. While these new reforms will not solve all the problems, we are encouraged by the administration’s commitment to housing. As election season heats up, we will press candidates on both sides of the aisle for bold affordability solutions to aid current and future homeowners.
For more information, visit https://www.nar.realtor/.
