What Happened?

Only 38 rental homes are affordable and available for every 100 of the poorest American renters, according to a federal housing report. A program meant to close that gap is producing results, but its funding swings wildly from year to year.

The Housing Trust Fund, created by Congress in 2008, channels money from mortgage companies Fannie Mae and Freddie Mac into rental housing for people earning less than 30 percent of the local median income. Those are households often earning under $25,000 a year in many parts of the country. The fund received $748.9 million in fiscal 2022, then fell to $214.1 million in fiscal 2024, a drop of more than 70 percent in two years.

Why Does it Matter to Me?

For renters at the bottom of the income scale, this program is one of the few federal tools building new housing specifically for them. Through December 2024, the fund helped create 4,716 new rental units and restore 2,775 more. More than 99 percent of those homes went to renters earning less than 30 percent of area median income.

The fund also stretches federal dollars. For every $1 it puts in, projects pull in $9.81 from other sources, according to the Congressional Research Service (CRS), the nonpartisan agency that researches policy questions for Congress.

For fiscal 2026, the fund distributed $255.5 million to states. That is real money, but it reaches a fraction of the households who need help.

Both Sides, Now

Supporters of the fund point to its track record: units built, dollars leveraged, and a funding stream that does not depend on Congress passing a spending bill each year. Because Fannie Mae and Freddie Mac contribute automatically based on their mortgage activity, the fund can operate without going through the annual budget fight.

Critics and skeptics raise a different concern. The fund's contributions can be suspended if the Federal Housing Finance Agency decides Fannie Mae or Freddie Mac face financial risk. A 5.7 percent automatic spending cut also applies through fiscal 2031. And a temporary rule written in 2015 still governs the program because a final rule has never been issued, even after a public comment period opened in 2021.

Congress could expand the fund through direct appropriations, change who qualifies, or leave the current structure in place. No legislation to do any of those things has passed.

What Happens Next?

The Trump administration and Congress are weighing whether to keep, expand, or restructure the program. One open question is what happens to the fund if Fannie Mae and Freddie Mac exit the government conservatorship they have been under since the 2008 financial crisis, which could affect the automatic contributions that keep the fund running.

The CRS report flags that Congress could act to add direct funding or change the program's rules, but no vote is scheduled. Until lawmakers act, the fund's size will keep rising and falling with the mortgage market, and the gap between available affordable housing and the households who need it will remain.

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