2011 Budget Proposal Is Good With Regards to Housing
- Feb 10, 2010
The Obama Administration released its FY 2011 budget proposal this week, which outlines what the U.S. Department of Housing and Urban Development (HUD) would receive in funding as the housing market comes out of one of the worst crises to ever hit it.
Clare Duncan, policy associate at the National Housing Conference (NHC), explains how the funding for HUD will go toward achieving some of the organizations key goals. NHC advocates for national policies that promote affordable housing. The issues they tackle include Section 8, Fair Housing and Equal Opportunity.
MHN: What do you think about the budget with regards to housing?
Clare: Overall, it’s a good budget combining economic discipline with support for affordable housing in communities nationwide. Major HUD projects have received funding; for example Section 8 and the Homelessness Assistance Program. There are others like Section 202 (for seniors) and 811 (for disabled) which received cuts. The HUD plans to modernize both these programs.
MHN: How is this budget different from last years budget?
Clare: HUD made the point in their budget briefing that this year is about reducing deficit and building on programs to make them more efficient. Last year’s budget was all about sustaining programs and trying to do whatever they could to achieve that.
MHN: How does the budget help HUD in achieving its key goals?
Clare: The budget will help in achieving HUD’s five key goals in the following manner.
Strengthening the Nation’s Housing Market: According to HUD, the FHA represented 30 percent of the housing market in the last quarter of 2009 – up from 1.9 in 2006 – and served 2.1 million households in 2009. Recent policy changes were designed to grow capital reserves and manage FHA risk. These changes included increasing the mortgage insurance premium for borrowers, as well as updating the combination of minimum FICO scores and down payments required for new FHA borrowers.
As a result, the FY 2011 budget proposal reflects an increase in revenue of more than $3.5 billion when compared to FY 2010. The budget proposal also provides $88 million for the Housing Counseling Assistance program and $20 million for combating mortgage fraud in order to help continue to stabilize the housing market over the long-term.
Meeting the Need for Quality Affordable Rental Homes: The proposed FY 2011 budget increases investments in HUD’s rental assistance programs, including proposing $350 million for the first phase of a multi-year initiative called Transforming Rental Assistance focused on regionalizing the Housing Choice Voucher program and converting public housing to project-based housing vouchers.
In addition, the budget proposal includes $2.1 billion for HUD’s Homeless Assistance Grants – up from $1.9 million in FY 2010.
Improving Quality of Life Through Housing: As part of the FY 2011 budget proposal, HUD is designating a total of $85 million in new funding to the creation of 10,000 homeless and special needs housing vouchers as part of an innovative collaboration with the U.S. Department of Health and Human Services and the U.S. Department of Education. The proposal also includes $340 million in funding for the Housing Opportunities for Persons with AIDS program – representing a $5 million increase from FY 2010.
Building Inclusive, Vibrant and Stable Communities: The proposed FY 2011 budget includes funding to support activities to create more transit-dense and all inclusive neighborhoods – requesting $250 million for the Choice Neighborhoods Initiative, up from $65 million in 2010, as well $150 million for the Sustainable Communities Initiative.
Transforming the Way HUD Does Business: Additionally, in 2009 HUD acknowledged a pressing need to change. Through the FY 2011 budget proposal HUD is allocating $476 million – $217 million more than FY 2010 levels – for the related Transformation Initiative Fund. The budget proposal also provides $87 million for Policy Development and Research (PD&R) for research and technology – $39 million over FY 2010 enacted levels – to increase necessary resources and for the implementation of rigorous evaluations.
The proposal provides HUD with a total budget of $48.5 billion for existing core programs and new initiatives – meeting the agency’s initial $41.6 billion request and including a projected $6.9 billion from Federal Housing Administration (FHA) and Ginnie Mae related revenue.