HUD Ready with FY2013 Budget

by devteam February 14th, 2012 | Share

The Department of Housing and UrbanrnDevelopment (HUD) unveiled its 2013 budget proposal today, asking Congress forrnabout $44 billion.  The amount is roughlyrnthe same as the amount Congress authorized for the 2012 budget year.  </p

In addition, HUD is asking for authorityrnto guarantee $400 billion in mortgages through FHA’s Mutual Mortgage InsurancernFund which is expected to provide 1.2 million single family mortgages, $149rnbillion in loan volume, during the year and $500 billion in Ginnie Maernguarantee authority in order to help finance a wide array of government-insuredrnproducts.  In addition it requests $25 billionrnin loan guarantee authority for the General and Special Risk Insurance Panelrnwhich will provide an estimated 156,000 units in multifamily housing propertiesrnand 80,600 beds in health care facilities.</p


Approximately 75 percent of HUD’s budgetrngoes to rental assistance including both tenant and project basedrnassistance.  Among the tenant based programrn(TBA) funds requested for the year are:</p<ul class="unIndentedList"<li$17.238rnbillion for the renewal of existing Section 8 vouchers, providingrnaffordable housing for more than 2.2 million families in need, including thernrenewal of special purpose vouchers funded in previous years;</li<li$1.575 billion for administrative fees associated withrnoperating TBA. </li<li$111rnmillion for Mainstream Section 811 vouchers to enable persons withrndisabilities access to affordable, private housing of their choice, andrnaccommodate the provision of supportive services;</li<li$75 million in Tenant Protection vouchers, whichrnare provided to tenants to replace either public housing that is demolished orrnsold or projectsrnassisted by Multifamily Housing programs that stop receiving federal subsidies;rnand</li<li$75 million for the HUD-Department of VeteransrnAffairs Supportive Housing (HUD-VASH) vouchers to assist an estimated 10,000rnhomeless veterans.</li</ul

Project-based assistance providesrnfunds to state and local Public Housing Authorities to supplement rents andrnmaintain the properties.  HUD isrnrequesting $6.59 billion to operate public housing programs and modernize itsrnaging structures.  This request includes:</p<ul class="unIndentedList"<li$4.524 billion in Public Housing Operating Funds tornfundrnmore than 3,100 public housing authorities to operate and manage approximatelyrn1.2 million units of publicly owned affordable rental housing units, and</li<li$2.07 billion in Public Housing Capital Funds, primarily tornaddress capital repair and replacement needs.</li</ul

HUD’s Project-Based RentalrnAssistance (PBRA) program provides rental assistance funding to privately ownedrnmultifamily rental housing projects.  Thernamount of PBRA funding paid to each owner is generally the difference betweenrnwhat a household can afford (up to 30 percent of income) and the HUD-approvedrnrent for the unit.  For FY 2013, HUD isrnrequesting a total $8.7 billion in funding for PBRA programs which includes:</p<ul class="unIndentedList"<li$8.44 billion for the renewal and amendmentrnof existing PBRA contracts; and </li<li$260 million for Project-Based ContractrnAdministrators torneffectively administer the PBRA program.</li</ul

Anotherrnbudget item is over $7 billion to fund capital grants toward local housing andrncommunity development initiatives. These include: </p<ul class="unIndentedList"<li$9.95 billion for Community Development BlockrnGrants;</li<li$2.07 billion for modernization capital grants,rnadministrative receiverships and financial and physical assessment supportrnthrough Public Housing Capital funds.</li<li$150 million for the Choice Neighborhood initiative;rnand</li<li$60 million for Indian Community Development BlockrnGrants.</li</ul

Approximatelyrnfive percent of the HUD budget goes to various initiatives including remediationrnof lead based paint hazards, housing counseling, fair housing and equalrnopportunity, family self-sufficiency counselors, and research and datarncollection.  This year HUD is requestingrna total of $2.1 billion for these initiatives.</p

Inrnpresenting the budget, HUD Secretary Shaun Donovan said that it includesrnseveral proposals to improve the efficiency and effectiveness of departmentrnprograms. </p<ul class="unIndentedList"<liIt merges its Public Housing Operating and CapitalrnFunds programs into a single subsidy stream.</li<liOutlines a proposal to streamline and enhance thernFamily Self-Sufficiency program,</li<li.Includes a series of reforms to rental assistancernprograms that save over $500 million without reducing the number of familiesrnserved; </li</ul

Donovan said that while thernbudget is holding the line on increased expenditures, it:</p<ul class="unIndentedList"<liMaintainsrnhousing assistance for all families currently receiving rental subsidies;</li<liServesrnalmost 2.5 million families living in public housing and project-based Sectionrn8 developments over 60 percent of whom are elderly and disables;</li<liSupportsrntenant-based vouchers for more than 2.2 million families over $45 percent ofrnwhom are elderly and disabled;</li<liProvidesrn10,000 new vouchers to homeless and funds 5,300 more in supportive housing;</li<liEnablesrnFHA and Ginnie Mae to continue their crucial, temporary countercyclical roles;</li<liBringsrnprivate capital back to the market through FHA premium increases and otherrnmeasures; </li<liAssistsrnnearly 5.5 million households, an increase of 82,000 over fiscal year 2011;</li<liCreatesrnor retains 423,000 jobs directly and 360,000 more indirectly.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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