National Housing Trust Fund.

What HTF does

The National Housing Trust Fund (HTF) is a federal block grant program administered by HUD's Office of Community Planning and Development. Authorized by Section 1131 of the Housing and Economic Recovery Act of 2008, and implemented under 24 CFR Part 93, HTF is unique among major federal housing programs in two ways:

1. It is not funded by congressional appropriations. HTF receives a statutory percentage of new business at Fannie Mae and Freddie Mac, channeled through the Federal Housing Finance Agency (FHFA). This insulates the program from annual budget battles but means funding levels track GSE volumes (and thus mortgage market conditions).
2. It is the only federal program specifically targeted to Extremely Low Income (ELI) households — those earning ≤30% AMI or below the federal poverty line, whichever is higher.

HTF's economics are unusual among federal housing programs: because 30% AMI rents almost never cover operating cost plus debt service, HTF capital subsidies are typically grant-equivalent (deferred-payment soft loans or grants) and are almost always paired with an operating-subsidy layer such as Section 8 PBV/PBRA or Section 811 PRA. The capital and operating subsidies together — not HTF alone — make ELI-targeted units financially feasible.

Program history

HTF was authorized in 2008 but did not actually begin distributing funds until 2016. The delay was a function of the Great Recession and conservatorship of Fannie Mae and Freddie Mac: the GSEs were forbidden from making the statutory contributions while in active financial distress. FHFA suspended the funding requirement in 2008 and reinstated it in 2014 (effective 2016) once the GSEs had returned to profitability.

Since 2016, annual HTF distributions have ranged from approximately $174M (FY2016, the inaugural year) to ~$749M (FY2022, the peak — $748,948,401 per FR doc 2022-13850). FY2023 was $382M, FY2024 was $214M, and FY2025 was approximately $223M (FR notice 2025-22177, Dec 8, 2025) based on 2024 GSE business volumes. Going forward, volume is highly dependent on mortgage market activity at Fannie and Freddie — the GSE assessment is volumetric, not appropriated.

Each state is guaranteed a minimum of $3 million annually regardless of formula outcome — a statutory floor in place since the program's creation under HERA in 2008 (12 U.S.C. §4568(c)(4)(C)) — ensuring small-population states can run viable programs.

How it works

Funding mechanism

Fannie Mae and Freddie Mac contribute a fraction of new business volume (currently 4.2 basis points or 0.042%) to the Housing Trust Fund and the Capital Magnet Fund combined. Of that combined assessment, 65% goes to HTF and 35% to CMF. The contribution is made monthly to FHFA, which transfers to HUD annually.

Formula allocation

HUD distributes HTF funds to states (only states, not local jurisdictions) by a statutory formula that considers:

• Shortage of rental units affordable to ELI renters
• Shortage of rental units affordable to Very Low Income (VLI) renters
• Cost burdens among ELI renter households
• Cost burdens among VLI renter households

Each state receives an allocation; the statutory minimum is $3 million annually. States typically allocate via the same agency that administers LIHTC (the state Housing Finance Agency) through competitive NOFA or QAP-integrated rounds.

Eligible uses

At least 80% of each annual HTF grant must be used for rental housing; up to 10% may be used for homeownership programs; and up to 10% may be used for administrative and planning costs. (The statute at 12 U.S.C. § 4568(c)(10) caps homeownership at 10%; the 80% rental floor is set by regulation under 24 CFR Part 93.)

Eligible activities for rental:

• Acquisition
• New construction
• Rehabilitation
• Operating cost assistance (limited)

Income targeting (the key feature)

100% of HTF rental units must serve households at or below 30% AMI or the federal poverty line, whichever is higher — under current conditions. Per 24 CFR § 93.250, the 100% ELI requirement is conditional on total nationwide HTF funding being below $1 billion. Total HTF funding has never reached $1B (FY2022's ~$749M peak is the closest), so the 100% ELI floor has applied in every year since the program began distributing in 2016. If total HTF allocations exceed $1B in a future year, grantees may direct up to 25% of grant funds to Very Low Income (≤50% AMI) households. This deep-targeting rule is what distinguishes HTF from every other major federal housing program.

Rent restrictions

HTF rents are capped at the lesser of:

• 30% of 30% AMI (or the poverty line, whichever is higher), or
• 30% of the actual household income

These rents alone almost never cover operating costs plus debt service. HTF deals typically require either deep operating subsidies (Section 8 PBV/PBRA), grant equity (no required loan repayment), or both.

Affordability period

HTF rental units must remain affordable for a minimum of 30 years. State HFAs frequently impose longer periods. Affordability runs with the land via deed restriction or restrictive covenant.

One-for-one replacement and tenant protections

HTF includes strong displacement protections. Existing low-income tenants cannot be displaced by HTF-funded acquisitions or rehabilitations without relocation assistance under the Uniform Relocation Act. HTF projects involving demolition of existing affordable housing must include one-for-one replacement of demolished units.

State administration

Each state designates a single agency to administer HTF. In most states this is the Housing Finance Agency that administers LIHTC. State HTF programs are integrated into state QAPs in many cases, allowing developers to apply for LIHTC + HTF in a single round.

State allocation plans must address:

• Priority populations within the ELI cohort (e.g., persons with disabilities, persons experiencing homelessness, supportive housing populations)
• Geographic distribution within the state
• Methods for ensuring deep affordability is durable beyond the 30-year period

There is no federal statutory nonprofit set-aside in HTF (the 15% CHDO set-aside belongs to HOME, not HTF). State HFAs may impose nonprofit preferences as a matter of state policy in their allocation plans.

Labor standards — Davis-Bacon

Davis-Bacon prevailing-wage requirements do not apply to HTF. The Housing and Economic Recovery Act of 2008 (P.L. 110-289, Section 1131), which authorized HTF, did not make Davis-Bacon applicable, and HUD did not impose it in the implementing regulations (24 CFR Part 93). Note: 24 CFR § 93.354 addresses the Federal Funding Accountability and Transparency Act (FFATA), not labor standards. State or local prevailing-wage laws may apply independently.

LIHTC pairing

HTF is frequently paired with 4% or 9% LIHTC, with HTF serving as the deep-affordability capital layer (typically grant-equivalent), LIHTC equity covering the bulk of capital costs, and an operating-subsidy layer (Section 8 PBV/PBRA or Section 811 PRA) bridging the rent-vs-operating-cost gap that 30% AMI rents cannot fill on their own. HTF-restricted units typically map to the lowest-AMI designations in income-averaged LIHTC buildings. HTF's 30-year affordability outlasts LIHTC's 15-year compliance period and runs concurrent with the LIHTC extended-use period.

For the full deal-structure detail — capital-stack math, income-averaging interactions, operating-subsidy layering, and program-by-program compliance overlay — see the dedicated guide: LIHTC Deal Structures Guide.

Recent program developments

OBBBA impact

The One Big Beautiful Bill Act did not directly amend HTF. The GSE assessment that funds HTF continues unchanged. OBBBA's LIHTC enhancements (permanent 12% increase, 25% PAB threshold) indirectly benefit HTF-LIHTC stacked deals by increasing tax credit equity available to those projects.

Annual allocation trends

FY2025 HTF allocations were approximately $223 million based on 2024 GSE volumes (FR notice 2025-22177, Dec 8, 2025) — a modest increase from FY2024's $214M but well below the FY2022 peak of ~$749M, reflecting suppressed GSE mortgage volume in the higher interest-rate environment. FY2026 projections depend on the mortgage market and would only return to peak ranges with a significant rate-driven refinancing cycle.

How to apply (developer's perspective)

1. Confirm your state HFA's HTF program structure (most integrate with LIHTC QAP)
2. Identify the operating subsidy layer (Section 8 PBV, 811 PRA, state program) you will pair with HTF
3. Structure deal economics around 30% AMI rents — assume no rent revenue contribution from the HTF-restricted units toward debt service or developer fee
4. Apply through state HFA's HTF round (often coordinated with LIHTC and HOME)
5. Execute restrictive covenant for 30-year affordability period
6. Comply with state HFA monitoring and HUD reporting through the affordability period

Pairing with other programs

• LIHTC (4% or 9%): Most common pairing; HTF fills the 30% AMI gap that LIHTC alone cannot reach
• HOME: HOME for 50-60% AMI units; HTF for 30% AMI units in mixed-AMI buildings
• Section 8 PBV / PBRA: Essential operating subsidy layer; HTF capital + Section 8 operating is the standard deep-affordability structure
• Section 811 PRA: Operating subsidy for HTF units serving non-elderly persons with disabilities
• State affordable housing trust funds: Many states layer state trust fund grants with federal HTF for additional gap financing

Practitioner resources

• HUD CPD HTF program homepage
• 24 CFR Part 93 — HTF implementing regulations
• Your state HFA's HTF Allocation Plan
• HUD's annual HTF formula allocation tables (published shortly after FHFA transfer)
• FHFA Housing Trust Fund quarterly assessment reports
• Industry resources: NLIHC (National Low Income Housing Coalition) HTF resources, NCSHA, Enterprise Community Partners