US Rep Frank Bill Would Use TARP Income For Housing
By Meena Thiruvengadam, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- House Financial Services Committee Chairman Barney
Frank has a plan to funnel income from the government's $700 billion bailout
fund toward the housing sector.
The powerful Massachusetts Democrat last week quietly introduced legislation
that aims to use $1 billion in dividends paid by the recipients of government
aid to provide rental housing opportunities for low-income and homeless
families. The money would go into a national housing trust fund established last
summer in connection with legislation that allowed for Fannie Mae (FNM) and
Freddie Mac (FRE) to be placed under government conservatorship.
The fund currently is empty, however President Barack Obama's fiscal year 2010
budget calls for it to receive $ 1 billion - a sum the Frank legislation would
provide.
"This would be the seed money to get the trust fund up and running," said
Danna Fischer, legislative director for the National Low Income Housing
Coalition.
Fischer said the trust aims to garner $150 billion in total funding over the
next decade.
Frank said it is feasible to use income from the Troubled Asset Relief Fund,
known as TARP, to finance the trust for at least "a couple of years."
Frank's legislation also proposes funneling $1.5 billion in TARP dividend
payments to state and local government efforts to redevelop abandoned and
foreclosed properties.
"We made some money on this. It's now reasonable to use some of that to deal
with these problems," Frank said.
Banks participating in TARP have so far paid the U.S. Treasury more than $4.9
billion in dividends.
Separately, Frank's legislation aims to reallocate some funds from the TARP
itself.
The legislation would divert $2 billion in TARP dollars to an emergency
mortgage relief program administered by the Department of Housing and Urban
Development and another $2 billion for HUD to use for the creation of a program
to cope with foreclosures on multifamily properties.
-By Meena Thiruvengadam, Dow Jones Newswires; 202-862-6629;
meena.thiruvengadam@dowjones.com
(END) Dow Jones Newswires
06-30-091736ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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