Approximately $93.5 million in grants will be awarded to Community Development Financial Institutions (CDFIs) and nonprofit housing organizations through the much anticipated Capital Magnet Fund in September.
This will be in the inaugural round with funding from Fannie Mae and Freddie Mac, says Annie Donovan, director of the CDFI Fund, which administers the program.
The Capital Magnet Fund had one previous round in 2010, awarding $80 million appropriated from Congress to 23 organizations.
In the latest round, the CDFI Fund has received 125 applications requesting $609 million, far exceeding the available supply, according to Donovan. Officials expect about 30 awards to be made.
These awards can be used to finance affordable housing activities, as well as related economic development activities and community service facilities
In its one previous round, the program awarded $80 million to 23 organizations—13 nonprofit housing groups, nine CDFIs, and one tribal housing authority. The 2010 awardees leveraged the initial awards 12 times with other public and private investments in almost 7,000 affordable homes.
The Capital Magnet Fund, along with the National Housing Trust Fund, was supposed to be supported by Fannie Mae and Freddie Mac, but that plan was put on hold for several years. The government-sponsored enterprises were placed into conservatorship during the housing crisis in 2008, and any payments were suspended.
At the end of 2014, the Federal Housing Finance Agency announced the lifting of that six-year suspension, directing Fannie Mae and Freddie Mac to set aside an amount equal to 4.2 basis points of each dollar of unpaid principal balance of their total new business purchases for the Capital Magnet Fund and the National Housing Trust Fund.