HUD has published fiscal year 2025 allocations for the federal Housing Trust Fund (HTF), distributing $223 million nationwide to support housing for extremely low-income and very low-income households. Texas will receive $9,611,392, making it one of the larger recipients this year, though not at the scale of its Housing Tax Credit allocation.
The Housing Trust Fund was created under the Housing and Economic Recovery Act of 2008 (HERA) and is funded through dedicated set-asides from Fannie Mae and Freddie Mac. HTF is designed to increase and preserve housing affordable to households with the greatest needs—particularly those at or below 30% of Area Median Income—and is often used alongside other capital sources to reach deeper affordability.
How the Housing Trust Fund Allocation Formula Works
Unlike the Low-Income Housing Tax Credit program, which allocates credits largely based on population, HTF awards are driven by a statutory need-based formula. HUD calculates each state’s share using multiple indicators, including:
- Shortages of rental units affordable and available to extremely low-income (ELI) and very low-income (VLI) households
- The prevalence of severe housing cost burden and substandard housing conditions among ELI and VLI renters
- A construction cost adjustment that increases allocations for states where building or rehabilitation costs exceed the national average
These factors are designed to direct limited HTF resources toward states where the relative intensity of need and cost pressures is greatest.
Why Texas’s HTF Share Differs From Its Tax Credit Allocation
Texas consistently receives the second-largest Housing Tax Credit allocation in the country, but HTF follows a different logic. Because the formula emphasizes proportional need and multiplies that need by a construction cost factor, states with higher documented shortages and significantly higher construction costs receive larger shares.
Texas’s construction costs are closer to the national average than those in states like California or New York, which limits the upward adjustment applied to its need score. In addition, while Texas has substantial housing need in absolute terms, other states show higher ratios of severe cost burden and substandard conditions among ELI and VLI renters under HUD’s national data. As a result, Texas’s HTF allocation is meaningful but does not scale in the same way as population-driven programs.
What Comes Next in Texas
In Texas, HTF funds are administered by TDHCA, which will establish program rules, timelines, and eligible uses for the FY 2025 allocation. As in prior years, implementation details—including income targeting, underwriting standards, and compliance requirements—will significantly influence how effectively these dollars can be deployed and layered with other financing sources.
TAAHP will continue to monitor TDHCA’s rollout of the FY 2025 Housing Trust Fund allocation and share updates with members as program guidance and opportunities become available.