Every year, various interest groups compete for a share of the total budget. Because of the cyclical nature of public and private funding, communities can fall farther and farther behind in addressing the growing need for affordable housing. Yet, decent affordable housing should not be dependent upon an unreliable and highly political budget process.

HTFs provide a stable and steady source of funding for affordable housing. Trust funds enable jurisdictions to design housing programs and provide housing developers with a dependable source of funding to support projects. These funds can be used for a variety of purposes including, but not limited to:

• Creation and maintenance of affordable housing
• Homebuyer assistance: Including counseling, down payment and mortgage assistance, and interest subsidies.
• Subsidized rental housing: Assisting families with rent vouchers or creating below-market rental units.
• Safety net housing: Creating and improving homeless shelters.
• Gap financing: Providing dollars to complete a financial package, when all other funding sources are secured.
• Loan source: Providing start up and dependable cash flow to housing developers (cushioning the less-timely nature of other public funding sources).
• Support for nonprofit housing developers: Providing pre-development funds to secure land and assist with financial packaging, housing design, and management.
• Leverage additional resources: Providing "matching" funds that other public or private resources may require.

Because HTFs are created locally using public revenues, they should be structured to address priority issues in a community. For example, funds initially can be targeted to fix up vacant homes for homeownership opportunities, and later shifted to address other needs. This flexibility in design is one of the most attractive features of a housing trust fund.

In communities planning redevelopment, and in those where private investment is driving gentrification, housing trust funds can provide financing to acquire properties key to preserving affordability. In escalating housing markets, the funds can subsidize renters while other affordable housing opportunities are developed to meet long-term needs.

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