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

Earlier this week, Treasury Secretary Janet Yellen announced new efforts by her department to increase the supply of housing in the United States. Among the initiatives outlined by Secretary Yellen are:

• a new program to be administered by the Community Development Financial Institutions Fund (CDFI) and which will provide $100 million over the next three years to finance affordable housing for low- and moderate-income households;
• an effort to provide greater interest rate predictability to state and local housing finance agencies that borrow from the Federal Finance Bank to support new housing development;
• a call to action for federal mortgage banks to increase their spending on housing programs (from the required 10% of net income to 20% of net income);
• an updated “Practical Guide to Affordable Housing” to assist state and local governments in using unallocated state and local fiscal stimulus funds advanced during the pandemic by the Treasury Department to support their response to and recovery from the COVID-19 public health emergency for housing construction (with a focus on projects supporting the needs of teachers, firefighters, nurses, and other workers excluded from certain markets) by December 31, 2024; and
• an update to a rule for the Capital Magnet Fund of CDFI Funds to reduce administrative burdens to allow the CDFI Fund to focus its energies on housing production and preservation.

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