On December 11, 2014, Federal Housing Finance Agency (FHFA) Director Melvin L. Watt instructed Fannie Mae and Freddie Mac to begin setting aside and allocating funds for the Housing Trust Fund and the Capital Magnet Fund. Fannie Mae and Freddie Mac will set aside payments beginning January 1, 2015.
Congress created the Housing Trust Fund and the Capital Magnet Fund in 2008 under the Housing and Economic Recovery Act of 2008 (HERA). However, they have been empty since they were created six years ago due to a temporary suspension. Director Watt indicated in letters to the government-sponsored enterprises (GSEs) that “circumstances have changed and the temporary suspension is no longer justified.”
FHFA sent to the Federal Register an Interim Final Rule to address the statutory requirement that the allocations may not result in transferring their expense to originators or other Enterprise counterparties. The Interim Final rule is effective upon publication and has a 30-day comment period.