The Democrats may be headed for another showdown with President Bush as the House passed the National Affordable Housing Trust Fund Act Wednesday by a commanding 264 to 148 vote, a measure the administration was on record threatening to veto earlier this week.
The housing trust seeks to provide funding for the construction, rehabilitation, and preservation of 1.5 million units of affordable housing over the next 10 years. The concept was originally proposed in 2000 by Sen. John Kerry (D-Mass.), but had never seen the light of day until the Democrats took control of Congress this year.
Three of the major housing trade groups are now supporting the housing trust fund, including National Association of Home Builders, Mortgage Brokers Association, and the National Association of Realtors.
While Republican critics of the bill such as Randy Neugebauer (R-Texas) claim the measure will create another layer of bureaucracy, the Democrats, led by Rep. Barney Frank (D-Mass.), chairman of the House Committee on Financial Services, say the trust fund will be self-supporting, raising roughly $1 billion annually from housing-related revenues from Fannie Mae and Freddie Mac and surplus receipts from the FHA.
"There's no chance we're creating another layer of bureaucracy because all the money will be funneled to state and local agencies," said Frank, speaking on the floor before the House voted today. "This is a flat funding source that will create no budget deficits at all," he added.
According to press materials released by the House Financial Services Committee, all of the money from the trust fund must be used to assist low-income families earning below 80 percent of state or local median income. Sixty percent of the monies will go to participating local jurisdictions and 40 percent to states, Indian tribes, and insular areas.