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Independent Living News & Policy from the National Council on Independent Living

The National Housing Trust Fund: Next Steps!

Advocate Holds Fair Housing Symbol at 2011 My Medicaid Matters RallyThis week, NCIL joined the National Low Income Housing Coalition (NLIHC) at their annual conference in Washington, DC to announce a national advocacy campaign to pass legislation that will provide capital for the National Housing Trust Fund (NHTF). In 2008 Congress passed legislation establishing the NHTF, but they did not establish the necessary funding stream.

The purpose of the NHTF is to increase and preserve the supply of rental housing for extremely low and very low income families, including homeless families, and to increase homeownership for extremely low and very low income families. NCIL was a leader in the work to get the NHTF legislation passed and now we continue that leadership with the advocacy campaign to get funding for the program.  Currently, there are 47 states that have state housing trust funds and NCIL members around the country work closely with them to provide housing for people with disabilities.

On Friday, March 15, Representative Keith Ellison (D-MN) introduced H.R. 1213, The Common Sense Housing Investment Act of 2013 in the House. This legislation will reform the Mortgage Interest Deduction (MID) process, not eliminate it. 

According to the NLIHC website, the bill:

  • will lower the cap on amount of interest that can be claimed for tax break from $1millon to $500,000;
  • will eliminate the tax break for up to $100,000 of interest on home equity loans, but allow interest on home equity loans to be included under the $500,000 cap;
  • may or may not allow tax break for interest on mortgages on second homes;
  • will convert tax deduction to non-refundable tax credit between 15% and 20%;
  • will make mortgages for cooperatives eligible for credit; and
  • will phase in both the cap reduction and conversion to credit over five years.

In relation to the NHTF, the bill:

  • Credits the NHTF with amounts determined by Treasury to be equal to the revenue accruing to the general fund due to enactment of changes to MID listed above. It will be mandatory spending, not subject to appropriations. In other words, the savings produced each year for 10 years as determined when the bill is scored will be credited to the NHTF. Legislators may add provisions for what happens after 10 years.
  • Adds the replacement of outdated mobile homes as an eligible use of the NHTF.

Other Changes to the NHTF Statute

The National Low Income Housing Coalition and HUD are suggesting that it is best not to try to include changes to the NHTF statute in the initial bill, but Ellison may want changes related to use of NHTF by Public Housing Authorities (PHAs).

The NHTF Campaign has endorsed reform of the Mortgage Interest Deduction and to direct savings realized from reform to the NHTF. The NHTF campaign supports a proposal for reform of the mortgage interest deduction developed by the National Low Income Housing Coalition that would reduce the size of a mortgage eligible for a tax break from $1 million to $500,000 and convert the deduction to a non-refundable tax credit set at 15%.

The Mortgage Interest Deduction is an expensive and regressive homeowner subsidy that costs the federal government $100 billion a year and benefits only 22% of all taxpayers and just 52% of all homeowners who pay mortgage interest.  The Mortgage Interest Deduction has long been considered a “sacred cow,” but calls for its reform are numerous. It is on the table as part of the debate on deficit reduction, as well as in conjunction with examination of the role of the federal government in subsidizing home ownership.

These changes would mean that all homeowners with mortgages would get a tax break, not just those who have enough income to file itemized tax returns. The number of homeowners with mortgages who would get tax breaks would increase from 37 million to 52 million, with 94% of the increase being households with incomes less than $100,000 a year.

These changes would also save approximately $30 billion a year that could be directed to the NHTF.  An investment of this size would expand the supply of rental homes that the lowest income households can afford by 3.5 million over 10 years, ending the housing shortage for this population.

For more information on this legislation, contact Dara Baldwin, NCIL Policy Analyst, at

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