Slashed Budget Proposals for HUD Eliminate Aid for Thousands

The U.S. Department of Housing and Urban Development (HUD) is facing cuts from House and Senate bills that would put its budget at the lowest level in a decade, in inflation-adjusted terms, at a time when housing needs are becoming more urgent, says the Center on Budget and Policy Priorities.

“These reductions in funding would come in spite of the fact that the number of low-income families experiencing severe hardship due to the lack of affordable housing—which HUD has termed, ‘worst-case housing needs’—has increased by more than 40% since 2001,” says the CBPP.

The bills risk loss of rental assistance for thousands of low-income families.

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The House bill allotted $1.1 billion to administrative funding for the 2,400 agencies in charge of the voucher program and ensuring proper use of Congressional funds. This sum is 24% less than the 2011 level and 30% beneath 2010 levels, and if the House bill goes through, it would provide barely more than 60% of the funds that agencies will need and are eligible for.

Meanwhile, the Senate bill provides $1.4 billion, a $50 million cut from 2011 funding levels.

Reductions in administrative funding will almost certainly result in helping fewer families in 2012 than in 2011, says the CBPP.

The CBPP outlines how House and Senate funding bills would negatively impact the Housing Choice Voucher Program, as both bills don’t meet President Obama’s 2012 budget request for renewing the vouchers in important respects.

The House and Senate bills also underfund public housing in 2012, with the House budget reducing funds by nearly $1.4 billion, or 20% beneath the 2011 level. The Senate bill’s cuts aren’t quite as deep, reducing funding by $800 million in 2012.

If Congress combines certain features of the House and Senate bills, it could significantly reduce cuts in rental assistance, says the CBPP. Suggestions include funding the overall HUD budget at least at the House bill level of $38.1 billion and considering accepting the funding rescissions of $432 million in unspent funds, included in the Senate bill.

Read the CBPP file here.

Written by Alyssa Gerace

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  • I have never understood the insistence of NRMLA leadership that we should be voting for Democrats.  Here is another example.  The budget proposal from the Democrat controlled Senate for HUD is lower than that from the Republican controlled House.
     
    It is under a Democratic Administration and a Democratic controlled Congress we first saw PLFs fall because they refused to provide funding.  Now for the second straight year we see ongoing MIP at 1.25%. 
     
    It is from a Democratic controlled Congress we got HERA.  The rational for capped and lower origination fees was the massive increase we would obtain from increased volume due to HECMs for purchase and coops.  Wink, wink, that one worked out as expected!!!  All of the other great HERA benefits were just as underwhelming including the misnamed and so called “single national lending limit” of $417,000.
     
    While the Democrats can clearly show they helped the program by increasing lending limits (and they did) in February 2009, with the mess of the housing market and their inability to get it under control, the higher lending limit is the stuff of dreams for the vast majority of HECM borrowers.  Our endorsement production for the last fiscal year was over one-third less than it was for 2009.  The Democrats gave incentives for HECM borrowers to obtain LTC insurance and then swept it away in HERA and did even worse in HERA with the Democratic initiated cross selling rules.  [Oops, I forgot at NRMLA Senator McCaskill is a Republican because she acts that way???]
     
    I would like to know what other things the Democratic Party has done for the program; well, no, maybe not.  I am neither a Democrat nor a Republican.  In fact, I have written contribution checks for Democrats and do not remember the last time I ever contributed to a Republican campaign.
     
    Vote with our pocketbooks is what is heard on the last day of the Convention.  Well, I agree but the vote would be for the political party which signed the original HECM bill into law, the Republicans.

  • Linked to a RMD article posted October 18th is a twelve page letter dated October 14, 2011 from the House Financial Services Committee which states: “…HUD’s annual budget has increased steadily in recent years, rising from $31.92 billion in FY 2005 to $46.998 billion in FY 2010.”  That increase is over 47% in five years.
     
    The Center on Budget and Policy Priorities (“CBPP”) points out based on the competing Congressional proposals that on an after inflation basis the HUD budget would be at its lowest in a decade.  Well if one looks at overall housing costs, they have not gone up much, if at all, in the last decade.  In fact the lower of the two proposals would be an increase to the FY 2005 HUD budget of over 15%.  Current ridiculously high spending levels have not done much to turn the tide.  It seems time to take what is in the budget and re-craft policy so that any increased spending over FY 2005 is at least effective and has some punch. 
     
    Everyone in the housing and mortgage industries have pet projects.  The CBPP like most pseudo lobbying organizations has its pet projects.  Few will stand up and encourage Congress to make the needed cuts even if it hurts their pet projects.

  • Looks like a case of ” not MY benefits” to me.  This seems to me to be one of the bullets we must bite in order for the greater good of the nation.

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