State HTF Allocations Increase
The U.S. Department of Housing and Urban Development (HUD) last week released its fiscal year (FY) 2018 allocations for various block grant programs, including for the Housing Trust Fund (HTF). Earlier this year, Novogradac detailed expected 2017 contributions to the HTF and Capital Magnet Fund (CMF). Both funds were expected to receive larger contributions over 2017 and the HUD grant allocations bear this out for the HTF.
The final FY 2018 allocation of $266.8 million is a 22 percent increase over the 2017 allocation of $219.2 million. That increase was possible because Treasury did not divert 25 percent of the HTF and CMF contributions to the HOPE Reserve Fund. Each state and the District of Columbia receives at least $3 million, the small state minimum. Twenty-four states and D.C. will receive the small state minimum, a total of $75 million. The remaining $192 million in HTF funding will be distributed to states and U.S. territories based on the HTF formula.
The graphics below detail HUD’s actual HTF allocation to each state:
While the increase in HTF funding is good news, it is important to remember that the fate of future allocations is uncertain. The president’s FY 2019 budget request calls for the elimination of the HTF and CMF. Although unlikely to be heeded by Congress because it lacks support from Senate Democrats, nine of which at a minimum would be needed to repeal the HTF and CMF, it does not represent the only threat. The term of Federal Housing Finance Agency Director Mel Watt, who oversees Fannie Mae’s and Freddie Mac’s contributions to the HTF and CMF, ends in January; his replacement could choose to suspend those contributions.