House Appropriations Committee Bill Slashes $3 Billion from HUD Funding in 2012

The House Appropriations Committee announced on Wednesday it was providing $55 billion for transportation, housing and urban development next year, with $38.1 billion going to the U.S. Department of Housing and Urban Development.

In total, the bill includes $55.15 billion in discretionary spending – a reduction of $19.8 billion below the President’s request and $217 million below last year’s level.

The funding level in the bill reflects the overall fiscal year 2012 discretionary spending total of $1.043 billion to which the House, Senate, and White House agreed in the recent debt ceiling legislation.


“Step by step, we are trimming government spending and streamlining programs to make them more cost-effective, efficient, and responsive to the American people. This bill saves taxpayers billions of dollars and eliminates waste wherever possible. And it reflects responsible decisions to ensure that the transportation and housing programs Americans rely on can remain in place for years to come without putting our nation even further in debt,” House Appropriations Chairman Hal Rogers said.

Subcommittee Chairman Tom Latham added, “This bill establishes a realistic approach to funding these programs by building on a foundation of fiscal responsibility. The American people rightfully expect leaders to put people before politics and progress before partisanship to change the way Washington works and the work that Washington does to restore the confidence in the American Dream and our economy. We recognize that responsibility with a bill that focuses on a continued commitment to reducing the size, cost, waste and scope of the federal government.”

The $38.1 billion for HUD is $ billion less than last year and $4 billion below President Obama’s request.  In addition, the bill slashes all funding for any new “sustainable,” “livable,” or “green” community development programs.  The majority of the cuts are largely due to administrative and capital reductions, which allows the bill to provide funding to renew every individual and family in the program to ensure no critical benefits are eliminated or cancelled said Republican leaders.

In addition, the bill provides the Federal Housing Administration $400 billion in guarantees for single family loans insured under the Mutual Mortgage Insurance Fund, but fails to include any support for counseling.

“The Republicans continue to refuse to fund Housing Counseling Assistance to low-income renters and home buyers, helping them avoid homelessness, foreclosure, and providing sound advice on reverse mortgages, purchasing a home and avoiding predatory loans,” said Rep. Norm Dicks (D-WA) in a statement.

Rep. Maurice Hinchey (D-NY) submitted a letter requesting the subcommittee restore $88 million in funding for HUD counseling, which was removed as part of the continuing resolution bill passed earlier this year.

“If these critical funding shortfalls were to continue, as of October 1, 2011, housing counseling services across the country will be reduced and staff performing housing counseling will be limited,” said Hinchey in the letter.

The subcommittee markup is scheduled to meet on Thursday to debate the bill.

Update: the bill passed late on Thursday

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  • HECM counseling is in need of revision.  While the HECM information portion of counseling is a necessity as is its testing.  FIT and BCU must be addressed.  Some described the increased length of time in counseling due to the financial segment as “cruel and unusual punishment” . 

    With the advent of Financial Assessment Underwriting, one of the principal reasons for this portion of counseling will be far more effectively addressed through underwriting.  The concept of a budget needs to be addressed in underwriting as well.

    This is yet another reason why counseling should follow application rather than vice verse.  If budgeting was gathered in underwriting, counselors could review it with the borrower and effectively reduce much of the financial section of counseling.

    Finally BCU should be done in another environment saving yet more time.  This will be effective and will drive down the growth in the price of HECM counseling.  Perhaps this will help reverse the current increase in the HECM dropout following counseling.

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