Purpose of the Housing Trust Fund 

Establish a pool of funds that would be allocated to local entities to meet the housing needs for very low-income, elderly, and special needs citizens. The fund’s corpus is designed to be spent.

In September, 2006 the THDA Board of Directors voted to allocate $12 million of THDA funds (over a two-year period) to establish the Tennessee Housing Trust Fund. Beginning in 2007, the THDA Board of Directors voted to allocate an additional $6 million to the Fund each year since.

The four-level model for funding includes state appropriation, THDA funds, private sector investment, and matching funds from local grantees. The purpose of the Housing Trust Fund is to serve the needs of very low income, elderly and special needs Tennesseans. Investments in the Housing Trust Fund are as follows:

Combined with THDA funds, local match and additional leveraging, the original $4 million state appropriation investments in affordable housing served as a magnet to create a $33.75 million direct economic impact in Tennessee.

In addition, THDA is seeking private sector funding for the Housing Trust Fund. Fifth Third Bank and First State Bank have made low interest loans to the HTF. These dollars are designed to assist homeowners of moderate income to make needed repairs to their homes for their security and comfort, maintain the housing stock, and to avoid predatory lending. The program is called Preserve. Basic home repair was the constantly repeated request when THDA and other housing funders visited with community leaders in all nine of Tennessee’s development districts in the spring of 2007. City and County officials, especially in rural areas of the state, continue to express that need as our THDA’s legislative liaison travels to meet with them to discuss affordable housing.

General Program Uses
The HTF targets assistance to persons of very low income, those earning 50% or less of the area median income. The Competitive HTF grants support the chronically homeless, persons with mental retardation or mental illness, citizens with developmental disabilities, single mothers recovering from substance addiction or physical abuse, veterans with multiple needs and ex-offenders re-entering society.

A set-aside within the trust fund is the Emergency Repair Fund. The dollars are allocated to the state’s nine development districts specifically to repair a home to keep it livable for its elderly homeowner. USDA / Rural Development has an established home repair fund. The HTF allocation allows those funds to reach more homeowners. United Cerebral Palsy has been working in partnership with THDA to construct ramps for persons with disabilities to allow access to their homes. HTF includes a set-aside to continue this effort.

Project Requirements
To be eligible, proposed projects have to:

1. Serve the targeted populations: very low income, very low income and elderly, or very low income with special needs;
2. Match grant funds with new local funds
3. Extra consideration would be given for projects that use the funds as loans as opposed to grants (to create a local revolving fund for future use).