Housing & Community Development Act of 1992
The challenge of affordable housing is one we still face today. Today’s challenges are related more to shortages of affordable properties, but simply saving for a down payment is equally difficult for millions of lower-income American families.
That was one of the purposes behind the National Affordable Housing Act of 1990. It contained provisions aimed at reducing the number of low-income Americans who cannot afford to save for a home, and was a good step in the right direction for increasing the supply of affordable housing.
Unfortunately, the Act was also widely viewed as too restrictive. The Housing and Community Development Act amended several provisions from the 1990 Act and several past pieces of legislation. One of the major changes the 1992 Act made was to re-examine eligibility requirements for low-income families. The Act also cleared the way for new developments by enabling states and cities to tear down structures deemed to be public health hazards.
First-time homebuyers also got assistance in the form of reduced interest rates, which were achieved through federal buy-downs of interest. The disabled, along with veterans and single occupants, also got a bit of help thanks to provisions that made housing permanently eligible for affordable housing assistance funds.
The purpose of the act wasn’t to establish housing in the area, which the 1990 Act had already done. Instead, the 1992 Act added Checks and Balances to the equation. This ensured the money would go toward the specific housing needs of respective communities. Unfortunately, it was not the final solution to this problem and finding funds for affordable housing continues to be a challenge.
About the Author: Samuel Phineas Upham is an investor at a family office/ hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phin on his Samuel Phineas Upham website or LinkedIn.