$100M Unleashed – See Who’s GETTING It!

(TheIndependentStar.com) – According to a statement from the Treasury Department, U.S. Treasury Secretary Janet Yellen is set to unleash $100 million in new financing to boost the availability of affordable housing.

This initiative is part of several efforts by the Treasury to tackle a persistent shortage of housing—an issue concerning voters, contributing to inflation, and a factor in public dissatisfaction with Joe Biden’s economic policies ahead of the November 5 presidential election.

The additional $100 million, spread over three years, comes from funds the Treasury has received from previous COVID-era investments in community lenders supporting small businesses, consumers, and affordable housing projects.

Moreover, the 2021 Emergency Capital Investment Program injected over $8.57 billion into these lenders, who then channeled $1.2 billion into 433 affordable housing initiatives.

The Treasury also plans to establish a new program at the Community Development Financial Institutions (CDFI) Fund, which it estimates could facilitate financing for thousands of affordable housing units.

In excerpts of her remarks at a public housing development project in Minneapolis, Yellen emphasized her expectation that housing cost inflation would ease.

“But we face a very significant housing supply shortfall that has been building for a long time. This supply crunch has led to an affordabilty crunch,” Yellen said. She added that the burden was greatest on low-income and Black households.

Yellen also called on the 11 Federal Home Loan Banks to allocate at least 20% of their net income to housing programs, doubling the current legal requirement of 10% and surpassing the banks’ voluntary commitment of 15%.

Therefore, if this policy had been implemented over the past five years, the 11 government-sponsored enterprises would have contributed nearly $2 billion more to housing programs than legally mandated.

Additionally, the Treasury is providing guidance to state and local governments on how to use their remaining COVID-19 recovery funds to bolster housing supply. This includes a practical guide on utilizing the funds to support construction projects.

Another measure Yellen will announce involves updating a regulation for an existing housing program within the CDFI Fund to reduce administrative burdens, thereby freeing up resources to aid in housing construction and preservation.

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