Royce Legislation Passes Committee, Eliminates Housing Trust Fund

House Financial Services Committee Republicans Continue GSE Reform Efforts

Washington, DC – July 13, 2011 – (RealEstateRama) — Today, the House Financial Services Committee approved legislation introduced by Rep. Ed Royce (R-CA), the “Housing Trust Fund Elimination Act.” Royce’s legislation eliminates the Affordable Housing Trust Fund established in 2008 as part of the Housing and Economic Recovery Act.

“Most concerning is this fund’s likelihood for fraud and abuse,” said Royce. “According to HUD, the Housing Trust Fund and the HOME program are nearly identical. A recent Washington Post investigation exposed the HOME program’s gross mismanagement, highlighting years of squandering hundreds of millions of tax dollars and a terrible track record of delayed or abandoned projects.”

Originally slated to receive funds from Fannie Mae and Freddie Mac, the Affordable Housing Trust Fund was never capitalized due to the GSE’s losses and subsequent bailout. However, the Administration requested $1 billion to capitalize the fund in its FY12 budget.

“Given our current fiscal situation and the fact that we are funding 86 other programs to address housing and rental affordability, this fund is unnecessary and duplicative,” said Royce.

“Additionally, money is fungible, so while these federal funds may be intended for rental and housing assistance, it may also subsidize the lobbying and campaign related activities of activist organizations. We should eliminate this fund once and for all,” Royce said.

NOTE: Rep. Royce’s legislation is one of several bills put forth by the House Financial Services Committee Republicans to end the bailouts, protect taxpayers and get private capital off the sidelines by reforming the Government Sponsored Enterprises, Fannie Mae and Freddie Mac.