A purported draft of the Department of Housing and Urban Development budget shows that the Trump administration wasn’t fooling around with its previously announced wish list of cuts.
Under the preliminary document, obtained by Politico, the federal government would slash $6 billion from multiple programs named in President Trump’s original budget blueprint from March, including the complete elimination of the Community Development Block Grant, the HOME Investment Partnership Program, and the Choice Neighborhoods grant initiative.
The Trump administration also puts the onus on mortgage lenders to fund desperately needed upgrades to the computer systems at HUD and the Federal Housing Administration, which still use COBOL-based software originally developed in the 1950s to track some mortgage data.
Last month, the nonpartisan Brookings Institution called on the Trump administration to use money from the Mutual Mortgage Fund to cover internal system overhauls, citing increased demand for all types of FHA-backed loan products. Instead, under the leaked plan, HUD would raise $30 million for software upgrades through fees on lenders that originate FHA loans, Politico reports.
Also on the chopping block, according to Politico’s review of the document: a housing program for veterans, which would be eliminated entirely, as well as deep cuts to Section 8 vouchers and capital improvements for public housing.
All told, the HUD budget would fall to $40 billion for the 2018 fiscal year, which begins on October 1. That fits almost exactly with President Trump’s budget plan, which sought $6.2 billion in HUD cuts — or a drop of 13.2%.
It also dovetails with the general tone of Trump’s blueprint, called “America First: A Budget Blueprint to Make America Great Again.” In the 53-page document — significantly shorter than previous administrations’ preliminary budget plans — the Trump administration emphasized lean government efficiency, a preference for state and local authorities over federal oversight, and the importance of private investment in public housing.
“These cuts are sensible and rational. Every agency and department will be driven to achieve greater efficiency and to eliminate wasteful spending in carrying out their honorable service to the American people,” an introduction attributed to the president read.
Neither the initial nor the latest report mentioned the Home Equity Conversion Mortgage program, which occupies an interesting space between public and private. The Trump administration had signaled two weeks ago that it might be on the verge of nominating Brian Montgomery, a veteran public servant and general promoter of the HECM program, to his second term as FHA commissioner, but the White House has yet to make a formal announcement.
HUD is expected to formally release its budget this week, and Politico cautioned that the draft document was not necessarily final. In addition, any actual budget would have to pass both houses of Congress before reaching the president’s desk, leaving room for negotiations and changes before it becomes law.
Written by Alex Spanko