Tags: u.s. treasury | affordable housing

US to Devote Extra $100M for Affordable Housing Over 3 Years

US to Devote Extra $100M for Affordable Housing Over 3 Years
The U.S. Treasury is announcing on June 24, 2024 it will commit another $100 million over three years for affordable housing. Pictured here is College Park building in College Park, Maryland, one of Amazon's affordable housing units. (Jacquelyn Martin/AP)

Monday, 24 June 2024 09:30 AM EDT

U.S. Treasury Secretary Janet Yellen will announce $100 million in new financing Monday to increase the supply of affordable housing, the Treasury department said in a statement.

The measure is one of several moves by the Treasury to try to address a chronic housing shortage — a concern of voters, a contributor to inflation and a source of dissatisfaction with President Joe Biden's handling of the economy ahead of the Nov. 5 presidential election.

The additional $100 million over three years comes from payments that the Treasury is receiving from prior COVID-era investments in community lenders to support small businesses, consumers and affordable housing projects. The 2021 Emergency Capital Investment Program injected over $8.57 billion into community lenders, who in turn invested $1.2 billion in 433 affordable housing projects, the Treasury said.

It said it will create a new program at the Community Development Financial Institutions (CDFI) Fund that it estimates could support the financing of thousands of affordable housing units.

In excerpts of remarks at a public housing development project in Minneapolis, Yellen said she expects shelter inflation to moderate.

"But we face a very significant housing supply shortfall that has been building for a long time. This supply crunch has led to an affordabilty crunch," Yellen said in excerpts of remarks. She added that the burden was greatest on low-income and Black households.

Yellen also is calling on the 11 Federal Home Loan Banks to devote at least 20% of their net income to housing programs, up from the legal requirement of 10% and the banks' voluntary commitment of 15%.

Had this commitment been in place over the last five years, the 11 government-sponsored enterprises would have contributed nearly $2 billion more to housing programs than legally required, the Treasury said.

The Treasury is also providing state and local governments with guidance on using their remaining COVID-19 recovery funds to increase the supply of housing. This includes a "how-to guide" on using the funds to support construction.

Another step Yellen will announce is the update of a rule for an existing housing program in the CDFI Fund that reduces the administrative burden, allowing more resources to support construction and preservation of housing.

© 2024 Thomson/Reuters. All rights reserved.


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U.S. Treasury Secretary Janet Yellen will announce $100 million in new financing Monday to increase the supply of affordable housing, the Treasury department said in a statement.
u.s. treasury, affordable housing
363
2024-30-24
Monday, 24 June 2024 09:30 AM
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