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The National Housing Trust Fund

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Change the mortgage interest deduction and invest in the National Housing Trust Fund
National Housing Trust Fund

UNITED FOR HOMES, the Campaign for the National Housing Trust Fund (NHTF), is gaining momentum.It has received the endorsement of The New York Times in its editorial, “Fight for the Housing Trust Fund,” which called on Congress to make funding it an early order of business in 2013.

A recent national poll shows that Americans approve of reform of the mortgage interest deduction as a means of providing for national housing needs. Rep. Keith Ellison (D-MN) has introduced H.R. 1213, the Common Sense Housing Investment Act of 2013, which would fund the NHTF through mortgage interest deduction reform.

It would modify the Mortgage Interest Deduction and direct $109 billion in savings to the National Housing Trust Fund over 10 years, as well as directing savings to LIHTC, Section 8 and the Public Housing Capital Fund.
Day for Housing 2013: Sheila Crowley, NLIHC, and Representative Stephanie Bolden, Wilmington

The National Low Income Housing Coalition (NLIHC) has launched this major new campaign to reshape U.S. tax policy to make affordable housing more available to the nation’s 10.1 million extreme low-income renter households. The centerpiece of the NLIHC campaign is a proposal to modify the mortgage interest deduction for higher income Americans and invest the savings in the National Housing Trust Fund, which was established to serve low-income housing needs. Also, a new national public opinion poll showing broad, bipartisan support for such a proposal.

The Nation is in the Midst of an Affordable Housing Crisis

In the wake of the financial and mortgage meltdown, there is now a more urgent crisis in affordable housing, which has become increasingly scarce for extreme low-income households, those who make no more than 30 percent of the median family income in their communities. These poor families are now in trouble despite the billions of dollars spent to address the national housing crisis. NLIHC estimates that only 5.6 million housing units exist for the 10.1 million extreme low-income households that need them. The vast majority of these households – 76 percent – are currently spending more than 50 percent of their income on housing costs. Nearly half of these households are families with children, many considered at high-risk for homelessness.

Change the Mortgage Interest Deduction to a Tax Credit Targeted to Those Who Need It Most

The NLIHC proposal would limit the mortgage interest deduction (MID) to the first $500,000 of mortgage debt and convert it to a 15 percent non-refundable tax credit. The change would carefully target the tax benefit to where it is needed the most – low and middle-income Americans, especially those who cannot itemize deductions and thus fail to benefit from the current tax law. Under this proposal, taxes will be reduced for 16 million American households with incomes of $100,000 or less per year.

Invest in the National Housing Trust Fund

The proposed change to the MID would generate approximately $200 billion in savings in the first ten years, which the NLIHC proposal would invest into the National Housing Trust Fund (NHTF). The NHTF was signed into law in 2008 by President George W. Bush with bipartisan support, but has never been funded. The Trust Fund was intended to provide communities with funds to build, preserve, rehabilitate and maintain rental homes that are affordable for extreme and very low income households. Trust Fund dollars would go to states providing grants to qualified housing organizations to provide affordable homes for the people who need the most help.

Americans Strongly Support Efforts to Address Homelessness, Modify MID

A new poll conducted for NLIHC found that 74 percent of respondents believe the nation is not doing enough to end homelessness, and 76 percent support funding a federal government program to make more affordable rental housing available to low-income families. Proposals to modify the mortgage interest deduction also received broad support among respondents, with 60 percent support capping or limiting the tax break or converting the deduction to a tax credit.

NLIHC Launches Historic Campaign – Commits $1 Million

“An overwhelming majority of Americans want to change the way we address the epidemic of unaffordable housing for the nation’s poorest people,” said NLIHC President and CEO Sheila Crowley. “The time for solutions is now. It is time for policymakers to scrap unfair and inefficient tax subsidies for high-income Americans and instead make affordable housing available for those who need it most. NLIHC is committing $1 million toward launching this comprehensive campaign to make this vision a reality. I ask our nation’s leaders to join us. Together, we can find solutions that will improve the lives of millions of the very neediest Americans and thereby strengthen our entire nation.”

The campaign was launched in conjunction with the NLIHC’s annual conference, “United for Action,” held in Washington D.C. on Mar. 17 – 20. More than 1,000 organizations have joined NLIHC to support this historic campaign and to reach out to policy makers in support of this commonsense approach to addressing the housing needs of the nation’s most vulnerable. More information on the campaign is available at

NLIHC also announced its support of the Common Sense Housing Investment Act of 2013, authored by U.S. Rep. Keith Ellison (D-Minn.). The bill would make the modifications to the mortgage interest deduction as proposed by NLIHC and direct all the savings to affordable rental housing, including to the National Housing Trust Fund.

The poll of 802 adults was conducted by Belden Russonello Strategies between Feb. 27 and Mar. 9.The margin of sampling error is ± 3.5 percentage points.

Home is the Foundation

But for the 6.8 million American households for whom even a modest rental home is unaffordable and unavailable, life is a daily struggle for survival. Families in this situation find themselves making impossible choices between food and rent. When illness, job loss or other tragedy strikes, they often become homeless. The National Housing Trust Fund Campaign was formed to support enactment and funding of the NHTF, in order to put decent homes in reach of all Americans.

The National Housing Trust Fund was established as a provision of the Housing and Economic Recovery Act of 2008, which was signed into law by President George W. Bush. The passage of National Housing Trust Fund legislation is a major victory for low income housing advocates and the lowest income people in our country with the most serious needs. The NHTF Campaign is now focused on securing permanent funding for the program.

The NHTF will, once capitalized, provide communities with funds to build, preserve, and rehabilitate rental homes that are affordable for extremely and very low income households. The NHTF’s most important features are:

  • It is a permanent program, and will have dedicated source of funding not subject to the annual appropriations process.
  • At least 90% of the funds must be used for the production, preservation, rehabilitation, or operation of rental housing. Up to 10% can be used for the following home ownership activities for first-time home buyers: production, preservation, and rehabilitation; down payment assistance, closing cost assistance, and assistance for interest rate buy-downs.
  • At least 75% of the funds for rental housing must benefit extremely low income households and all funds must benefit very low income households.