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WASHINGTON, DC-National Low Income Housing Coalition president Sheila Crowley testified yesterday before the House Financial Services Committee to urge Congress to create the proposed Affordable Housing Fund. The fund would produce or preserve homes affordable to extremely low- and very low-income households, with extremely low-income households defined as incomes at or below 30% of the area median. The fund is part of the proposed HR 1427, the Federal Housing Finance Reform Act of 2007.

Under this bill, Fannie Mae and Freddie Mac would be required to contribute to the fund revenue equal to 1.2 basis points for each dollar of their average total mortgage portfolios for the preceding year. In the first year, the money would go to Gulf Coast states, which are still struggling with housing problems after the 2005 hurricanes.

Crowley noted that the fund is not an entirely new concept. It “is the conceptual cousin of the highly successful Affordable Housing Program of the Federal Home Loan Banks, through which 10% of their profits must go into a grant program to support affordable housing activities,” she told the committee.

She also noted that this bill makes clear what can and cannot be done with these funds. An earlier version of the bill introduced in the last Congress generated some controversy when questions arose whether the funds could be used for other activities than building capital costs.

“Let me assure all members of the committee who are concerned about other potential uses or misuses of these funds that there is no one more dedicated to assuring that does not happen than those of us at NLIHC,” Crowley said.

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