Urge Your Senators to Oppose Rescissions to Affordable Housing
Reach out to your senators to oppose rescissions to affordable housing and community development programs, including the Capital Magnet Fund (CMF).
The House has already passed a bill “Spending Cuts to Expired and Unnecessary Programs Act” (H.R. 3) that would recapture $141 million from CMF, $40 million from the Public Housing Capital Fund, and $40 million from the USDA Section 521 Rental Assistance Program. The Senate is planning to vote on their rescission bill (S. 2979) this week. Enterprise strongly opposes rescissions to these vital affordable housing and community development programs.
The rescission mechanism is intended to recapture unspent funds from appropriated accounts from prior fiscal years, typically for programs that are poorly performing or that have been eliminated. However, CMF does not fall in to this category:
- CMF is not an appropriated program but is rather funded through a small fee on total new business purchases of Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac. The CMF was intentionally designed to be an enduring source of investment in affordable housing and other economic development projects in low-income communities that is not reliant on the annual Congressional appropriations process.
- CMF dollars proposed for rescission were not sitting unspent and in fact were not released to the Treasury Department until May 1, 2018, a week before the Administration proposed its rescission package. If prior CMF rounds are predictive, the $141 million will be obligated to awardees before the end of the 2018 calendar year. Additionally, in 2017, the program received applications for more than 3.5 times the amount awarded.
- CMF is a highly innovative and cost-effective program, and organizations that receive CMF grants are required to leverage their funding 10:1 with other sources of capital, although grantees often exceed this. The 2017 funding round awarded $120 million to enable 40 grantees to serve 41 states, create 17,000 jobs, produce 21,000 affordable homes, and attract more than $3.2 billion in additional investment—with over three-quarters of this capital coming from the private sector. Additionally, one-fifth of 2017 grantees plan to invest the majority of their awards in rural areas.
The need for affordable housing investments is tremendous. While the economy has strengthened since the Great Recession, housing costs have increased faster than wages. In 2017, nowhere in the country can full-time minimum wage workers afford a modest two-bedroom rental home. All investments in affordable housing are necessary.
Contact your senators today and urge them to reject these misguided rescissions to affordable housing.