POTENTIAL DEAL ON SENATE HOUSING BILL WOULD STEAL FROM THE POOR

May 16, 2008

FOR IMMEDIATE RELEASE: May 16, 2008

POTENTIAL DEAL ON SENATE HOUSING BILL WOULD STEAL FROM THE POOR

WASHINGTON, DC - Responding to pressure from Ranking Member Senator Richard Shelby (R-AL), the Senate Banking, Housing, and Urban Affairs Committee appears to be on the verge of diverting funds designated for a housing trust fund for housing for the poorest Americans to pay for Committee Chairman Christopher Dodd’s (D-CT) new program to refinance homeowners facing foreclosure.

In his bill “The Federal Housing Finance Regulatory Reform Act of 2008,” Chairman Dodd proposes to allow the Federal Housing Administration to insure refinanced mortgages of homeowners who face foreclosure. The Congressional Budget Office estimates this new program creates a potential liability for the federal government of $1.7 billion.

Reports are that Senator Shelby will only agree to the new FHA program if it is paid for by non-taxpayer funds. Senator Dodd’s bill also creates a housing trust fund with resources from Fannie Mae and Freddie Mac to build or preserve rental housing for extremely low and very low income people. Senator Shelby wants those funds to be used to pay for the new FHA program instead.

“After the $30 billion taxpayer guaranteed bail out of Bear Sterns and the $25 billion Senate-passed taxpayer funded bail out for homebuilders, for Committee Republicans to insist that the taxpayers should not pay $1.7 billion to prevent homeowners from losing their homes, has to be called what it is - hypocrisy,” said Sheila Crowley, President of the National Low Income Housing Coalition.

In a letter today to Chairman Dodd, the National Housing Trust Fund Campaign urged him to “identify other resources to pay for the new FHA program besides the only ones in this broad housing package that are dedicated to serving the poorest families in our country.”

A provision in the Federal Housing Finance Regulatory Reform Act that was authored by Senator Jack Reed (D-RI) would establish a housing trust with funds generated by Fannie Mae and Freddie Mac estimated to be about $500,000,000 a year. Trust fund dollars would go to the states to distribute to housing providers to build and operate rental housing that is affordable to families in the low wage work force and to seniors and disabled people on fixed income. Today, 71% of extremely low income renter households spend more than half of their income for housing, leaving them at risk of homelessness.

The Banking Committee will mark-up the Federal Housing Finance Regulatory Reform Act of 2008 on Tuesday, May 20. The National Housing Trust Fund Campaign calls on the members of the Banking Committee to reject the Shelby proposal and preserve the housing trust fund to help the people with the most serious housing problems, including those who have no home at all.

The National Low Income Housing Coalition is a membership organization dedicated solely to ending America’s affordable housing crisis. NLIHC educates, organize and advocates to ensure decent, affordable housing within healthy neighborhoods for everyone.

The National Low Income Housing Coalition recognizes journalists who do an exemplary coverage of the affordable housing crisis. For more information, go to www.nlihc.org/cndma.