Mortgage financing giants Fannie Mae and Freddie Mac are pledging to help increase affordable housing as they look to curb a nationwide housing shortage. The government-sponsored enterprises are offering their largest amount ever toward affordable housing, contributing $1.14 billion to the Housing Trust Fund and the Capital Magnet Fund.
The “announcement of record funding for additional housing production will help increase access to affordable, sustainable housing options,” Sandra Thompson, the FHFA’s acting director, said in an announcement.
The Department of Housing and Urban Development oversees the Housing Trust Fund and provides grants to states and other state entities to promote and preserve affordable housing and to encourage new construction of affordable housing throughout the country. The program will receive $740 million, a $29 million increase from last year.
The Capital Magnet Fund offers grants to financial institutions and nonprofit developers for community development. The fund, overseen by the Treasury Department, will receive $398 million, a $15 million increase.
Housing shortages have been a well-documented problem in the real estate industry in recent years, particularly in the affordable housing sector. The National Association of REALTORS®, partnering with the Rosen Consulting Group, published a study last year calling for a “once in a generation” response to address decades of underinvestment and underbuilding in the housing market. Read the paper: Housing Is Critical Infrastructure: Social and Economic Benefits of Building More Housing.