WASHINGTON, DC — Today, U.S. Senators Jack Reed (D-RI) and U.S. Representative Ritchie Torres (D-NY-15) led a letter along with Representative Nydia Velázquez (D-NY-07) and Senator Kirsten Gillibrand (D-NY), advocating for the permanent extension of the Federal Financing Bank (FFB) Risk-Sharing program. In a letter addressed to Treasury Secretary Yellen, Housing and Urban Development (HUD) Secretary Fudge, National Economic Council Director Brainard, and Office of Management and Budget (OMB) Chair Young, the members and senators emphasize the program’s critical role in advancing affordable housing goals and stimulating economic growth.

The FFB Risk-Sharing program, established in 2014, has proven to be an effective tool in closing funding gaps in the private markets and facilitating affordable housing production. Since its inception, the program has closed or committed $4.9 billion in loans, supporting the financing of 42,000 housing units.

Despite its proven track record, the FFB Risk-Sharing program is scheduled to close for new applications after September 30th, 2024. This impending closure threatens to eliminate a vital source of low-cost capital for affordable housing developers, making it even more challenging to close the housing gap. The National Low Income Housing Coalition estimates that the U.S. is currently short 7.3 million units affordable and available for the lowest-income Americans.

“Our nation desperately needs more housing that hardworking families can afford.  Extending the Federal Financing Bank Risk-Sharing program would help local developers create and preserve affordable rental housing units in Rhode Island and nationwide, without requiring additional federal spending,” said Senator Reed.

“Ensuring access to safe, affordable housing is a fundamental right. The Federal Financing Bank (FFB) Risk-Sharing program has been instrumental in advancing this cause, providing crucial support for affordable housing projects,” said Rep. Torres. “Its impending closure would be a significant setback, hindering our efforts to close the housing gap. I urge for the permanent extension of this program to continue its vital work in stimulating economic growth and meeting the housing needs of our communities.”

“Our nation’s housing crisis is putting extreme pressure on American families and putting access to safe and affordable housing out of reach for many,” said Rep. Velázquez. “The Federal-Financing Bank and Risk Sharing Program has proven time and time again to successfully expand affordable housing, and because of FFB’s involvement, local housing development agencies can reach deeper levels of affordability that poses no risk to the taxpayer. By permanently extending this successful program, we can help state and local communities meet their housing needs long into the future.”

“Affordable housing is becoming increasingly hard to access,” said Senator Gillibrand. “The FFB Risk-Sharing program has helped open the gates to increasing the quality and supply of affordable housing available for low-income and middle-class families across the country. I’m calling on the Biden administration to make this productive program permanent.”

Secretary Fudge’s recent endorsement of extending the FFB Risk-Sharing program during a House Financial Services Committee hearing highlights the program’s support from the Biden administration and its potential to drive economic activity and job creation. The program’s success underscores its importance in addressing the nation’s affordable housing shortage. Permanently extending the program will not only help create and preserve affordable housing, it will support economic growth in communities across the country.

15 Senate Democrats and 18 House Democrats signed the letter.  In addition to Reed, Torres, Velázquez, and Kirsten Gillibrand (NY), members of Congress who signed include: Senators Sherrod Brown (D-OH), Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), John Fetterman (D-PA), Maggie Hassan (D-NH), Martin Heinrich (D-NM), Amy Klobuchar (D-MN), Edward J. Markey (D-MA), Alex Padilla (D-CA), Bernard Sanders (I-VT), Jeanne Shaheen (D-NH), Mark Warner (D-VA), Elizabeth Warren (D-MA), Peter Welch (D-VT), and Sheldon Whitehouse (D-RI), as well as Representatives Gabe Amo (RI-01), Jake Auchincloss (MA-04), Becca Balint (VT-AL), Sean Casten (IL-06), Judy Chu (CA-28), Bill Foster (IL-11), Sylvia Garcia (TX-29), Ann Kuster (NH-02), Barbara Lee (CA-12), Teresa Leger Fernández (NM-03), Seth Magaziner (RI-02), Betty McCollum (MN-04), James McGovern (MA-02), Ilhan Omar (MN-05), Chris Pappas (NH-01), Janice Schakowsky (IL-09), Melanie Stansbury (NM-01), and Rashida Tlaib (MI-12).

Full text of the letter follows:

February 23, 2024

Dear Secretary Yellen, Secretary Fudge, Director Brainard, and Director Young:

We write to urge you to permanently extend the Federal Financing Bank Risk-Sharing (FFB Risk-Sharing) program, which has proven to be a productive, efficient tool in the Biden Administration’s Housing Supply Action Plan.

As you know, FFB Risk-Sharing is a joint Treasury and Department of Housing and Urban Development (HUD) program that was created in 2014 to close a funding gap in the private markets and stimulate greater affordable housing production. Although the program temporarily lapsed from 2019 to 2021, FFB Risk-Sharing has closed or committed $4.9 billion in loans to help Housing Finance Agencies finance 42,000 units. In short, the program has been highly successful – fully justifying the Administration’s decision to restart it in 2021.

Unfortunately, FFB Risk-Sharing is set to close for new applications after September 30th, 2024, which would eliminate a critical source of low-cost capital for affordable housing developers. Our nation continues to face a severe affordable housing shortage – the National Low Income Housing Coalition estimates the U.S. is short 7.3 million units affordable and available for the lowest income Americans – and losing this critical funding stream will make closing our housing gap even more difficult.

We were delighted, however, that Secretary Fudge endorsed extending FFB Risk Sharing at a House Financial Services Committee hearing on January 11th. As such, we urge you to permanently extend the FFB Risk-Sharing program to help create and preserve more affordable housing, while also continuing to fuel economic activity and job creation in communities around the country.

Thank you for your consideration of this pressing issue. We look forward to continuing to work with you and your teams to help ensure all Americans have a safe, decent home they can afford.

Sincerely,