Housing trust funds (HTFs) are funds established by cities, counties, and states to provide a public investment into affordable housing initiatives. HTFs can provide temporary or ongoing financing for affordable housing preservation, development, rehabilitation, and retrofits in both rental and ownership housing, which may not otherwise be reliably funded by general budget allocations. Safe and habitable affordable housing is essential to family well-being and community stability — yet many city neighborhoods remain deeply segregated due to entrenched racial and economic inequities. Black, Indigenous, and other people of color, people with disabilities, and other marginalized communities continue to face systemic barriers to securing safe, quality, affordable homes, driven by housing discrimination and chronic disinvestment in those same communities. A HTF is a solution that can help communities move towards equitable socioeconomic outcomes and housing justice.  

The goal of safe and affordable homes for all is a complex challenge that demands a multifaceted approach, combining innovative policy tools and sustainable funding mechanisms. HTFs play an important role in comprehensive equitable housing solutions, ensuring that resources are available to  support long-term affordability and serve very low-income households, people of color, and other historically disadvantaged communities, including those in danger of displacement. 

At the national level, the National Housing Trust Fund (NHTF) has been a vital source of funding for state and local housing trust funds, allocating $739.6 million to states in 2022 after allocating $689.7 million to states in 2021. However, recent interest rate increases resulted in a decline in single-family mortgage loans and refinancing acquisitions by the Government Sponsored Entities (GSEs). Consequently, the NHTF's 2024 allocation has been reduced by almost 44 percent ($214 million compared to 2023’s $382 million) in the last year. This significant funding cut falls far short of escalating housing needs across the nation, placing greater urgency on local financing mechanisms to bridge the gap. 

One temporary infusion of federal support came through the American Rescue Plan Act of 2021, which provided critical (though short-term) funding for state and local housing trust funds, with jurisdictions required to obligate their funds by December 2024. While the future of federal funding for HTFs remains uncertain, the need for state and local governments to take proactive steps in  securing sustainable, long-term revenue streams to address housing needs is more pressing than ever.

Despite these national funding challenges, state and local jurisdictions continue to step up by establishing and expanding housing trust funds to meet their communities’ most pressing needs. HTFs offer remarkable flexibility and can be leveraged in a variety of contexts to enhance the impact of other housing development funds by filling critical financing gaps and ensuring projects move forward. They also play a key role in creating economic opportunities by supporting workforce housing initiatives that allow residents to live near their jobs, schools, and community networks. Additionally, HTFs help mitigate displacement by funding anti-gentrification strategies such as land banking and tenant protections, while also capturing revenue from emerging industries to reinvest in affordable housing and community development. HTFs can also be used to support a community’s climate resiliency and/or environmental impact goals by financing energy-efficient retrofits, sustainability upgrades, and structural improvements to protect against severe weather events.. 

Beyond directly addressing housing needs, HTFs act as catalysts for economic stability and community well-being, ensuring that more residents can afford to live where they work, where their kids go to school, and where they have deep cultural and social ties. In addition to the PolicyLink resources listed on the right, see the Housing Trust Fund Project at the National Low Income Housing Coalition, Local Housing Solutions, and County Health Rankings & Roadmaps for more resources on housing trust funds.

• Community leaders usually spark the creation of HTFs by demanding that local or state governments address critical housing needs. Successful public campaigns often engage a wide range of community members and organizations, including faith-based groups, developers, banks, service providers, unions, and others with an interest in securing more affordable housing.
   
• Affordable housing developers, housing providers, and property owners can be advocates for the effectiveness and necessity of a HTF. As the prime recipients of these funds, they can recall the challenges of their own financing experiences and describe how a HTF can help make their construction possible either as a core or gap funding source. This group of stakeholders can also continue to advocate for dedicated funding streams to the HTF if those were not established in the original creation of the fund.
   
• Elected and appointed officials can help design HTFs and champion their implementation at the local and regional level. This includes shaping eligible uses of HTF dollars, such as permanently affordable rental housing, community land trust ownership, or limited equity cooperatives. These funds are typically administered by a public agency like a housing finance agency, municipal government, or housing authority.
   
• Community-based organizations and other advocates can organize towards the creation and funding of a HTF in their community, educate public officials on the structure and benefits of HTF, help provide critical oversight and set accountability standards for a HTF, and even serve on oversight boards to approve funded projects. 
   
• Housing finance agencies or other nonprofits can host and administer the HTF. Administering bodies make key decisions that outline the process of making funding decisions (from application to evaluation) and administering funds. They ensure that dedicated funds align with the funding priorities and eligibility requirements identified in the law, by electeds, or by the overseeing body. It is critical that the administering body of the HTF maintains a transparent relationship with the overseeing board to ensure that funding decisions and procedures are clear. 

Researchers can maintain a database assessing local development projects that have been or can be supported by the local HTF. This database can give oversight groups or the HTF board the information needed to determine which developments will receive priority funding. Subsequent analysis from this database can show how effective the HTF has been at reaching various housing goals in the city, county, region, or state.    

A HTF should have clearly stated objectives, funding priorities, a straightforward application process, committed and transparent staff, and a meaningful public accountability process. Although the implementation details of a HTF vary based on a jurisdiction’s unique housing needs and ecosystem of stakeholders, there are a few core considerations. 

• Community priorities: Because HTFs are created and sustained using public funds, they should address priority issues for the community, which may change over time. For example, a fund might initially focus on fixing up vacant homes for homeownership opportunities, then be used to conduct resiliency retrofits, and later shift to supporting the development of social housing or equitable acquisition projects.
   
• Reliable revenue sources: A HTF plan should identify a specific amount of annual dedicated revenue from one or multiple sources that can be relied upon for years to come. The amount dedicated to the HTF should be determined by measurable criteria, including but not limited to existing housing needs. Trust funds are frequently financed by budget appropriations or allocations, however this path does not support a reliable HTF that can benefit communities for years to come. Other times, HTFs are financed by taxes and/or linkage fees or fee increases. While HTFs are usually created by legislation or ordinance that contain details about the funding source, other funding sources, like a bond, require voter approval via ballot initiative. Advocates must then present a strong case and consider a range of potential funding sources. The most well-resourced HTFs receive dedicated funds that do not require an annual appropriation process, and are delivered through multiple passive sources of income such as taxes or fees. In addition to funds provided by the National Housing Trust fund, the federal government has and can continue to provide additional revenue sources for local or state-based HTFs. For example, the American Rescue Plan Act of 2021, passed in the wake of the COVID-19 pandemic, provided $350 billion in flexible funding for states and localities. Although jurisdictions had until December 31, 2024 to dedicate these funds, the ARPA represented an important new source of funding for housing trust funds in a time of economic necessity.
   
• Target populations: Affordable housing development efforts can be targeted to a number of different groups – for example, low- or very-low-income households, families at risk of homelessness, individuals with varying disabilities, elderly populations, or moderate-income families with children. Many HTFs also encourage mixed-income and mixed-use developments to further integrate economically and racially segregated communities.
   
• Building a strong coalition: Advocates should create broad coalitions that bring together residents, community-based organizations, policymakers, developers, and other stakeholders to design a HTF customized to the opportunities and needs in their city.
   
• Administration and oversight: HTFs are usually administered by a lead government agency or nonprofit, with an oversight board that represents a broad range of housing interests within the community. At a minimum, the oversight board should also be composed of community members and community leaders who were involved in advocating for a HTF or are familiar with housing issues in their community. The board should have the power to make decisions aligned with  community priorities. This power can come in the form of establishing trust fund policies, funding priorities, application and application review processes, funding allocation monitoring, and program evaluation. 
   
• Determining eligible uses: Most HTFs provide for a range of uses, such as the acquisition of existing housing stock, new construction, rehabilitation, emergency repairs, housing-related services, adaptive re-use, accessibility modifications, and more. In some cases they may also make dollars available for rental assistance (including emergency assistance), foreclosure prevention, and other pressing needs. Local Housing Solutions hosts a comprehensive list of potential activities a HTF can support. 
   
• Permanent Affordability: HTFs can and should be used to pursue long-term affordable housing goals and shield properties from the speculative market. By tying trust fund dollars to permanent affordability, through deed restrictions or establishing community ownership of properties through community land trusts, for example, HTFs can ensure investment in affordability stays with a property in perpetuity.