This month, the Treasury Department’s Community Development Financial Institutions (CDFI) Fund made its third round of awards from the Capital Magnet Fund (CMF). In the three funding rounds completed by the CDFI Fund, more than $291 million has been made available to 95 highly qualified organizations that competed against hundreds of CDFIs and high-capacity nonprofit housing developers. At a time when the 2017 tax bill cut the value of the Low Income Housing Tax Credit (LIHTC) by as much as 20 percent and Congress continues to debate whether or not to increase the LIHTC allocation – more on that later this week – the CMF and CDFI Fund itself have never been more important.
In total, the CMF will create over 50,000 units of affordable housing, including 6,500 for moderate-income homeowners. Over 33,000 jobs have already been created as a result, and another 16,000 jobs are expected to be created as a result of this year’s round.
This critically important and enormously impactful source of affordable housing investment dollars was created in the Housing and Economic Recovery Act of 2008 (HERA) and is funded by a fee on the new business of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. Just last week, a broad range of housing advocacy organizations issued a statement of principles on GSE reform that strongly endorsed both the CMF and the Affordable Housing Trust Fund (AHTF), created with the same funding mechanism in HERA.
These funds, along with LIHTC, are vitally important sources of affordable housing production and high-quality construction jobs. They are paid for through tax savings, not tax dollars, and are among the most effective housing subsidies in American history.
I am proud to have been a part of the CMF’s inception, along with NHC Board of Governors member Matt Josephs, now with LISC; Andrew Trueblood, currently with the D.C. Office of the Deputy Mayor for Planning and Development; and Scott Berman, currently with Capital Impact Partners. Today, the CMF is under the leadership of Kipp Kranbuhl, deputy assistant secretary of Treasury and CDFI Fund director Annie Donovan, who continue the tradition of rigorous, apolitical review based on well-defined metrics of success.
This latest award will support financing for the preservation, rehabilitation, development or purchase of affordable housing for low-income communities, as well as related economic development and community service facilities such as much needed workforce development centers, day care centers and health care clinics.
NHC strongly supports the continuation and expansion of LIHTC, the CMF and AHTF, and we will continue to defend them in the months and years ahead.