housing trust funds: overview » introduction » trust fund use

Housing trust funds can be used for nearly any purpose related to increasing housing affordability, quality, or stability. While every trust fund is different from the next, one common theme is a focus on the housing needs of very low-income families, in part because such families tend to have the most severe housing affordability challenges and in part because this tends to be a priority of the coalitions that are formed to advocate for the adoption of a housing trust fund.

However, in some cases, such as the state of Florida, the trust fund is used to address the housing needs of a broader range of the income spectrum, likely reflecting the very broad coalition of interests supporting the fund, which includes realtors and homebuilders, as well as low-income housing advocates. When designing a housing trust, many decisions need to be made, including decisions regarding:

  • Eligible applicants and activities
  • Requirements related to income eligibility and long-term affordability
  • Whether awards are issued as grants, loans, or both
  • Whether a portion of the fund is set aside to achieve special purposes, such as providing housing in targeted areas or serving the lowest-income households
These questions are not unique to housing trust funds. For example, similar questions arise with respect to the use of proceeds from housing bond issues, in-lieu fees, and tax increment financing. Because communities have considerable flexibility over the use of these locally-generated revenue sources, it is important to consider how funds can be used to augment the generally larger federal revenue sources available for affordable housing and advance a comprehensive housing strategy. We address this process in detail in the  Building a Strategy section. Click here to go straight to the sub-section of Building a Strategy that addresses the use of locally-generated revenue sources.

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How housing trust fund dollars are used
Free from the spending limitations associated with federal programs, administrators of housing trust funds enjoy a great deal of flexibility in determining how trust fund revenues can best be used to benefit the community.

Other pages in this section:

Orchard at Cold Spring CommonsRevenue sources for housing trust funds
State and local housing trust funds rely on a variety of different funding sources. Establishing a dedicated source of revenue assures a secure funding stream for the development, preservation, or operation of affordable homes.

Click here to view other resources on housing trust funds.