Housing trust funds give Habitat affiliates the chance to plan for longer-term projects, leverage funding sources — and serve more families.

United States
Ensuring housing opportunities for the present and the future

By Rebekah Daniel

With a spectrum of methods for achieving land ownership and a stable legal system, the United States currently does not struggle with tenure security issues to the extent that developing-world nations do. But while unjustified evictions and slum settlements are relatively rare, families who are unable to afford housing are not — and Habitat has been working toward a solution to benefit not only the families Habitat builds with but other nonprofit organizations, as well.

Housing trust funds are state, city or county government accounts separate and apart from general funds that support affordable housing initiatives, often with a dedicated source of funding. Revenue for housing trust funds comes from a variety of sources ranging from document recording fees to private contributions. At the local level, developer fees are a common source of funds, while at the state level, real estate transfer taxes can provide needed monies. Nonprofit and private developers, tribal authorities, government agencies and housing authorities are typically eligible for housing trust fund loans and grants, and they are usually administered by either a housing finance agency or equivalent board or a state, city or county housing authority.

One of the major opportunities provided by housing trust funds is the chance for affiliates to serve more families without a significant ongoing investment of time or money, says John Snook, Habitat for Humanity International’s state and local relations director.

“A well-functioning housing trust fund allows affiliates to plan for longer-term projects, significantly leverage other funding sources, and, ultimately, to spend less time fundraising and more time building and serving families,” he says. “They regularly provide substantial grants and loans for projects to support the creation of affordable housing stock — projects like those of Habitat affiliates. Housing trust funds also represent a commitment on the part of state and local government officials to address their constituency’s affordable housing needs.”

Housing trust funds are by nature flexible in terms of the housing needs they can help meet. Organizations have used them to fund not only affordable housing construction but also rehabilitation and preservation of existing affordable housing stock, transitional housing, down-payment assistance, weatherization, and green housing. Numerous Habitat affiliates throughout the United States have benefited from state and local housing trust funds. For example, Habitat affiliates in Ohio received a $200,000 grant from the Ohio Housing Trust Fund in August 2006 to build 20 houses, and affiliates in Tennessee received $500,000 from the Homes for Tennessee Initiative in 2008 to build 20 houses.

At the state level, Habitat state support organizations are advocating for effective housing trust funds in Michigan, Louisiana, Hawaii, Alabama, Colorado, Tennessee, Virginia, Maryland and New York. In addition to advocating on the state and local level, Habitat has been gathering support for a national housing trust fund with four main criteria: be targeted to low-income households; be flexible enough to meet local needs with both rental and ownership units; be crafted to ensure compatibility with other federal housing programs; and encourage responsible efficiency standards and green building principles.

“From an on-the-ground perspective, housing trust funds are a ‘hot’ legislative initiative,” Snook says. “States and localities all across the country are adopting or updating existing housing trust legislation, and crafting them based on the needs of those advocating. [But] if Habitat affiliates are not involved, the needs of the families they serve may be overlooked as the fund is created. A fund without Habitat input may unintentionally create roadblocks to our participation, for example, by focusing solely on populations that Habitat does not typically serve, such as extremely low or upper middle-income families.”