Treasury Secretary Janet L. Yellen Announces New Initiatives to Lower Housing Costs on Behalf of the Biden Administration

Earlier this week, Treasury Secretary Yellen announced new efforts by the Treasury Department to increase the nation’s housing supply. Some of the initiatives Secretary Yellen discussed included: 

• a new program to be administered by the Community Development Financial Institutions (CDFI) Fund that will provide $100 million over the next three years for the financing of housing that is affordable to low- and moderate-income households;
• an effort to provide greater interest rate predictability to state and local housing finance agencies borrowing from the Federal Financing Bank to support new housing development;
• a call to action for the Federal Home Loan Banks to increase their spending on housing programs (from the required 10% of net income to 20% of net income);
• an updated “Affordable Housing How-To Guide” to support state and local governments in using unallocated State and Local Fiscal Recovery Funds advanced during the pandemic by the Treasury Department to support their response to and recovery from the COVID-19 public health emergency for the construction of housing (with a focus on projects supporting the needs of teachers, firefighters, nurses, and other workers priced out of certain markets) by December 31, 2024; and
• an update to a rule for the CDFI funds’ Capital Magnet Fund to reduce administrative burdens so as to permit the CDFI Fund to focus its energies on the production and preservation of housing.

Secretary Yellen also urged Congress to pass bipartisan legislation to expand the Low-Income Housing Tax Credit, one of several of the Biden Administration’s legislative proposals that would build and preserve over 2 million homes.