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By Law, Groups Like ACORN Will Get Money When You Take Out A Mortgage.

This is what Congressman John Culberson said on Glenn Beck the other night.

John Culberson
Congressman John Culberson

“From this day forward we will all be paying 4.2% basis fee of $420 for every $100,000 mortgage in your closing paper will have papers. You’ll have a new little line in there, a new fee that we’re going to all pay to go straight to these affordable housing funds which the states then hard wire to La Raza, ACORN, groups like that.” – Congressman John Culberson in an interview with Glenn Beck, October 13, 2008

I did a quick google search and could only find a few scattered references to this, none of them citing a source. So I picked up the phone and called Congressman Culberson’s office in Washington D.C. The staffer who answered the phone confirmed that the Congressman had said that, and was able to tell me where to find the language in the bailout bill that backed up the Congressman’s claim.

This is from the Housing and Economic Recovery Act of 2008. You can read the bill on the Library of Congress website. It’s dry reading, but I’ve picked out the parts relevant to this topic.

H.R. 3221, the Housing and Economic Recovery Act of 2008

the Federal Home Loan Mortgage Corporation shall–

`(A) set aside an amount equal to 4.2 basis points for each dollar of the unpaid principal balance of its total new business purchases; and

`(B) allocate or otherwise transfer–

`(i) 65 percent of such amounts to the Secretary of Housing and Urban Development to fund the Housing Trust Fund established under section 1338; and

`(ii) 35 percent of such amounts to fund the Capital Magnet Fund established pursuant to section 1339

This is from section 1339 – (emphasis mine)

`(e) Eligible Grantees- A grant under this section may be made, pursuant to such requirements as the Secretary of the Treasury shall establish for experience and success in attracting private financing and carrying out the types of activities proposed under the application of the grantee, only to–

(2) a nonprofit organization having as 1 of its principal purposes the development or management of affordable housing.

While I couldn’t find any language allocating this money specifically for La Raza or ACORN, those organizations clearly fit the bill for nonprofit organizations having as 1 of their principal purposes the development or management of affordable housing.

On the ACORN website, you’ll find this

ACORN is working to make affordable housing available so people in low- and moderate-income neighborhoods can be homeowners.

La Raza has a subsidiary called Raza Development Fund, or RDF.

Established in 1999, the mission of RDF is to bring private capital and development assistance to local organizations serving Latino families in areas such as affordable housing, primary health care, and educational facilities.

Looking at the language of the bill, it doesn’t look like these grants come with any strings attached. Is it appropriate for this tax money (yes, it is a tax folks) to be going to an organization like ACORN? I just read on Michelle Malkin yesterday about a RICO suit filed in Ohio against ACORN. They’re under investigation in at least fifteen states right now for voter registration fraud. Why are we giving this group money?

And La Raza… I’m not even going to get into that one.

Andrew Riley is an idealist, a dreamer, and occasionally a real son-of-a-bitch. He spends his days webmastering this blog, writing for this blog, and more importantly filling his four year old son's head with silly nonsense. He is an Army veteran, a conservative Libertarian, and gets bored with most people pretty quickly. 4 out of 5 dentists agree that he is way cooler than you.
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