Frequently asked questions – housing trust funds

What can housing trust funds provide to Habitat affiliates?

• Substantial grants and loans for affordable housing projects.
• A reliable, consistent source of funding.
• Freedom from significant fund-raising efforts and expenditures.
• A permanent solution that does not need to be renewed every legislative cycle.

What forms can housing trust fund awards take?
Grants, loans (forgivable or deferred), lines of credit, or rental assistance.

How are housing trust fund grants or loans awarded?

• Most HTFs have an open application. In many cases, you can apply for many sources with the same application.
• Many distribute funds through a request for proposal process or notice of funding availability.
• Some programs award funding to those who meet specific objectives and requirements.
• Other HTFs use a formula to distribute funds throughout the state or to specified jurisdictions to address specific rural and urban needs or other equity issues.

What activities are eligible to be funded by a housing trust fund?

• Most HTFs support new construction, rehabilitation, acquisition and permanently supportive housing.
• Some also support transitional housing, emergency rental assistance and repairs, accessibility, first-time home purchase or green building.
• There are currently 20 state HTFs that support capacity building through technical assistance, overhead and staff costs, planning costs, studies, appraisals or organizational development.

How have Habitat affiliates benefited from housing trust funds?
Habitat affiliates nationwide have received grants from local and state housing trust funds. Some examples are:

• Sea Island, South Carolina receives unrestricted local funds for each completed approved home.
• Ohio’s state support organization receives over $200,000 in state grants each year.
• Texas affiliates receive state grants for capacity building and loans for predevelopment work.

Why is a dedicated source of revenue for a housing trust fund so important?

• It removes the need to spend time and money seeking new revenue from the legislature each year.
• It provides a reliable source of financial support. This allows for longer term planning and more consistent program design.
• Without it, a community’s affordable housing projects can become secondary to programs that receive legislative funding.

What are the most popular funding sources for housing trust funds?

• The most common is the real estate transfer tax. Because of its ties to housing, it more easily garners the support of voters and legislators.
• Other examples are document recording fees, taxes on alcohol or tobacco, interest on escrow accounts, and funds from unclaimed property.
• There is room for creative funding sources. For example, if your area has a large entertainment sector whose employees require affordable housing, consider tying funding to restaurant receipts.

Why must Habitat affiliates become involved in housing trust funds advocacy?

• HTFs are shaped based on the needs of those advocating for them.
• A HTF created without your input may only cater to populations your affiliate does not typically serve, such as extremely low- or upper-middle income families.
• Habitat affiliates who have formed coalitions with other housing advocates have proven success in creating HTFs that address the needs of the families they serve.

Which Habitat affiliates have joined coalitions or are currently advocating for HTFs?
See Statewide Housing Trust Funds for a list of Habitat affiliates and related advocacy coalition contacts.

Should I coordinate my advocacy efforts with other nearby Habitat affiliates or my support organization?
Yes! When your affiliate gets involved with any local advocacy issue, you should inform your surrounding affiliates and support organization (if applicable). State-level advocacy issues should be coordinated by the state support organization in consultation with the affiliates it represents. If no state support organization exists, you should consult with other affiliates in the state before taking a position.

Where can I find the tools I need to advocate for housing trust funds?
Download the State and Local Housing Trust Funds Affiliate Tool Kit (.pdf)