In 2008 Congress created the National Housing Trust Fund as part of the Housing and Economic Recovery Act. The National Housing Trust Fund is the first new federal housing production program since the HOME program was created in 1990 and the first new production program specifically targeted to extremely low income (ELI) households since the Section 8 program was created in 1974. This legislation identified contributions from Fannie Mae and Freddie Mac as initial funding sources; however, before any contributions could be made, these GSEs were taken into federal conservatorship, and funding has not yet been secured. In anticipation of the possibility of securing funding, HUD released draft regulations in October 2010 to implement the National Housing Trust Fund; the draft regulations propose that all funding within the first year of implementation be used to serve ELI households.

As the potential emerges to develop housing for ELI households using the National Housing Trust Fund, it is critical to address the particular challenges associated with providing ELI housing. Specifically, while developers may be able to amass the capital needed to construct these homes, without sufficient income from the property—collected primarily through the rents that can be charged to residents—operating and maintaining the housing must be balanced on an on-going basis with the goal of keeping the rents low enough to be affordable to ELI households. To help ensure that new resources for ELI housing are used effectively to address the housing needs of the targeted population and efficiently within the complexity of affordable housing development financing, it is useful to explore how jurisdictions have supported the development of housing for ELI households using state and local housing trust funds.