Announcements Archives

USDA to Use FY12 Section 515 Funds for Prepayment Incentives, No New Construction

August 22, 2012/in Announcements

HAC has learned that the following message was sent by USDA’s Office of Congressional Relations to members of Congress on August 20.

. . . RHS will forego the release of the NOFA for Sec. 515 new construction projects. This decision not to fund new construction was due to the need to conform with the law as interpreted by the Supreme Court (Salazar v. Ramah), which stated that if agencies had outstanding contracts and sufficient appropriations, they must fund any of those contracts. OGC determined that the decision was relevant to the contracts, known as Rental Assistance Incentive contracts, entered into by the Rural Housing Service to avert prepayment of Section 515 rental housing through offers of prepayment incentives to the project owners.

We understand our stakeholders’ disappointment in RD’s decision not to fund 515 new construction. RD had intended to issue a NOFA; the notice was in clearance at the time of the Salazar decision. The delay led to insufficient time for Federal Register notice of a NOFA, application process and ultimate obligation prior to the end of the fiscal year. The Supreme Court’s decision has forced RD to change its priorities and use 515 appropriations to fund prepayment incentives (equity loans and RA). However, the limited funding left in the 515 program will be used to rehabilitate existing 515 housing, or facilitate the sale of RD inventory properties to owners adept at finding additional resources to revitalize the properties. There is an urgent need for RD to revitalize its existing portfolio of aging rental housing. Since the cost to rehabilitate our existing housing is less than the cost of new construction, the limited funding left in the 515 program will go further and in the time required, prior to fiscal year end.

CBS News Airs Story on USDA Housing

August 17, 2012/in Announcements

Thurs., Aug. 17, 2012 – CBS News aired a story on USDA rural housing, along the same lines as the Wall Street Journal article published in May regarding RD’s housing foreclosures and servicing practices. The story aired on August 16, and included an interview with Tammye Trevino, administrator of the USDA RD’s Housing and Community Facilities Programs

Click here to link to the CBS story.

Area Eligibility for USDA Housing Programs Could Change on October 1, 2012

August 14, 2012/in Announcements

Fri., Sept. 28, 2012 – USDA issued a new version of Administrative Notice (AN) 4679, dated September 27 rather than September 25, that eliminates a confusing sentence in the summary on page 5. In the first version released, the paragraph read as follows. The italicized sentence has now been deleted.

Usage of 2010 Census and ACS data when determining population and income eligibility ensures that program funds are utilized in accordance with program statutes. Complete applications on hand as of March 27, 2013, maybe processed using 2000 Census data provided that written determination of eligibility and evidence of all documents necessary to be deemed complete exist, and that the application can be obligated no later than September 30, 2013. This does not apply to applications on hand where the applicant is eligible as the result of legislative provisions that expire upon receipt of the next decennial census.

Wed., Sept. 26, 2012 – USDA has announced that current area eligibility will remain unchanged until March 27, 2013. In other words, until that date 2010 Census data will not be used to determine what places fit the definition of rural that determines eligibility for USDA Rural Development programs.

Wed., Aug. 15 – On Aug. 10 the National Rural Housing Coalition reported that 24 members of the House had signed Rep. Fortenberry’s letter to House leadership asking for a one-year grandfathering provision in the continuing resolution: Reps. Dan Boren (D-OK), Charles W. Boustany, Jr. (R-LA), Francisco Canseco (R-TX), Shelley Moore Capito (R-WV), Lois Capps (D-CA), William Cassidy (R-LA), Kathy Castor (D-FL), David Cicilline (D-RI), Jim Costa (D-CA), Bob Filner (D-CA), Raul Grijalva (D-AZ), Frank Guinta (R-NH), Ruben Hinojosa (D-TX), William Keating (D-MA), Jim Langevin (D-RI), Frank LoBiondo (R-NJ), Blaine Luetkemeyer (R-MO), Don Manzullo (R-IL), Jim Matheson (D-UT), Mike McIntyre (D-NC), Michael Michaud (D-ME), Chellie Pingree (D-ME), Tim Ryan (D-OH), and Bennie Thompson (D-MS).

Two updates – Tues., Aug. 14, 2012 – HAC sent a letter to Secretary of Agriculture Tom Vilsack on August 13 asking him to postpone applying the 2010 Census data to the definition of rural for USDA’s housing programs.

The issue is still pending in Congress as well. The previously expected vehicles – the USDA appropriations bill or the Farm Bill – will not be enacted before the new fiscal year begins, so Rep. Fortenberry is now seeking cosigners for a letter to House leadership asking them to include a one-year rural housing grandfathering provision in the continuing resolution or any omnibus appropriations bills. Additional information is available from the National Rural Housing Coalition.

Wed., July 11– There are now 14 cosponsors to Rep. Fortenberry’s amendment, and his office continues to add more. The current cosponsors are Shelley Moore Capito (R-WV), Lois Capps (D-CA), Jim Costa (D-CA), Joe Courtney (D-CT), Paul Gosar (R-AZ), Raul Grijalva (D-AZ), Ruben Hinojosa (D-TX), Frank LoBiondo (R-NJ), Don Manzullo (R-IL), Ron Paul (R-TX), Steve Pearce (R-NM), Tim Ryan (D-OH), Bennie Thompson (D-MS), and Don Young (R-AK)

Wed., June 27 – HAC supports an effort now underway to add a grandfathering provision to the House’s USDA appropriations bill for FY13. Rep. Jeff Fortenberry (R-NE) is currently seeking cosponsors for an amendment that would extend eligibility through the end of FY13 for places that were eligible before the 2010 Census and have current populations under 35,000 but would become ineligible because of population growth between the 2000 and 2010 Censuses.

The House is not expected to vote on the agriculture appropriations bill until the week of July 9 at the earliest.

The National Rural Housing Coalition obtained a draft spreadsheet from USDA listing 923 communities that may become ineligible for USDA rural housing funds on October 1 if Congress does not pass legislation to extend their eligibility. USDA’s “impact key” explaining the shorthand used in the spreadsheet is also available.

Background information on this issue is available here.

Senate Farm Bill Amendment

Thurs., June 21 – The Farm Bill, including the Nelson Amendment, passed the Senate.

Wed. afternoon, June 20 – Amendment 2242 (details below) passed the Senate by a voice vote. No one spoke in opposition.

Senate votes on Farm Bill amendments will be completed today or tomorrow. The House has not yet begun its consideration of the Farm Bill, however, so final enactment of the bill and this provision are not imminent.

As noted below, the USDA appropriations bill for FY13 remains a possible vehicle for a one-year grandfathering provision because language is included in the bill that passed the Senate Appropriations Committee. It is not, however, included in the appropriations bill that passed the House Committee on June 19.

Wed. morning, June 20 – The Senate did not vote on amendment 2242 yesterday, but will take up the Farm Bill again today.

Tues., June 19, 2012 – The Senate is expected to vote soon on language to address the issue of eligibility for USDA’s rural housing programs for places that were eligible before the 2010 Census but gained population and could become ineligible based on their 2010 population size. The Housing Assistance Council supports this change, as does the National Rural Housing Coalition.

Sen. Ben Nelson (D-NE) has offered an amendment (#2242) to the Farm Bill (S. 3240) that would keep these places eligible so long as their population in 2010 was below 35,000. (The population cap is 25,000 in the current grandfathering provision, which applies to places that were eligible before the 1990 and 2000 Censuses.) The Senate is scheduled to begin voting on Farm Bill amendments this afternoon (June 19) and continue in future days. It is not clear exactly when this amendment will be considered.

Nelson’s amendment would maintain the status quo until the 2020 Census; it is not a one-year grandfathering provision, like the one included in the FY13 USDA appropriations bill passed by the Senate Appropriations Committee.

This amendment does not impact the general population limits for eligibility in non-grandfathered places. That is a separate issue and is not currently under active consideration on the Hill.

Background Information

HAC post on Shelterforce’s Rooflines blog

National Rural Housing Coalition summary

USDA draft spreadsheet listing 923 communities that may become ineligible, and “impact key” explaining the shorthand used in the spreadsheet

HAC paper estimating the impact on eligibility if grandfathering is not adopted (estimating 500 eligible places could become ineligible on October 1, 2012)

Posted: June 19, 2012
Last updated: August 14, 2012

If you have difficulty with any of the links on this page, contact Leslie Strauss at HAC.

Nichol speaks out on housing.

July 27, 2012/in Announcements

Polly Nichol, Director of Housing Programs at the Vermont Housing & Conservation Board and President of the Board of Directors of the Housing Assistance Council, was a featured panelist at a June 25 forum of the Bipartisan Policy Center’s Housing Commission in Bar Harbour, Maine. Her testimony is available here. Hosted by former Senator George Mitchell, the forum is part of the blue-ribbon Commission’s effort to develop long-term strategies for the nation’s housing.

Read Polly’s complete testimony.

Farm Labor Housing NOFA Call Set for July 26

July 16, 2012/in Announcements

Update July 18 – The Farm Labor Housing NOFA was published in the Federal Register today. Applications are due September 17, 2012.

July 16, 2012 – USDA Rural Development’s Office of Multi-Family Housing will go over the FLH NOFA and the Technical Assistance program RFP in a conference call industry forum on July 26, 2:00-3:00 pm Eastern Time. USDA’s notice about this industry forum says: “Our goal is to help you understand the requirements and selection criteria for the NOFA and RFP. This meeting is for informational purposes only.”

To RSVP, email Tonya Boykin at USDA.

To access the audio conference:

Dial In Number: 800-981-3173 (toll free)
Conference ID: 8818
PIN: Not Required
Password: Not Required

State of the Nation's Housing 2012

June 15, 2012/in Announcements

THE STATE OF THE NATION’S HOUSING

The Joint Center for Housing Studies of Harvard University released its annual State of the Nation’s Housing report for 2012 on June 14^th. This year’s report presents signs of a recovery in the nation’s housing markets. However, the Joint Center cautions that this progress is measured and not evenly experienced across all markets and populations. Additionally, the study notes that housing affordability problems are at an all-time high, and that housing assistance for low-income families has not kept pace with the demand for affordable housing. The State of the Nation’s Housing report can be accessed from the Joint Center for Housing Studies website at, https://www.jchs.harvard.edu/research/publications/state-nation%E2%80%99s-housing-2012

The Housing Assistance Council (HAC) is a proud sponsor of the State of Nation’s Housing report.

HAC Responds to Wall Street Journal Article on USDA Foreclosures

May 26, 2012/in Announcements

Update: HAC’s letter to the editor was published in the Wall Street Journal on June 4 and is available here.

On Friday, May 25, 2012, the Wall Street Journal published an article headlined “USDA is a Tough Collector When Mortgages Go Bad.” It describes USDA’s efforts to collect from borrowers under the Section 502 guarantee program who lost income in the recession and then lost their homes to foreclosure.

The article is available in PDF here. (On the Journal’s site, the full text is accessible only to subscribers.)

Comments posted online on the Journal’s site as of mid-afternoon Friday are available in PDF here. A comment from Robert Rapoza, Executive Secretary of the National Rural Housing Coalition, appears near the end.

HAC responded with the following letter to the editor.

wsj.ltrs@wsj.com
The Editor
The Wall Street Journal
1211 Avenue of the Americas
New York, NY, 10036

To the Editor:

“USDA is a Tough Collector When Mortgages Go Bad” (May 24) describes serious problems, but fails to recognize the positive achievements of USDA’s rural housing programs. The debt collection practices described in the article should be corrected, but this does not mean – as some of the online commenters suggest – that USDA should be taken out of the mortgage business.

To qualify for USDA’s direct mortgage program, families must have low incomes; to qualify for the guarantee program, they must have low or moderate incomes. Yet USDA’s delinquency and foreclosure rates are comparable to those of other lenders and guarantors.

It is not surprising that some of USDA’s borrowers have been affected by the recession. It may be more surprising that a far greater proportion are successful homeowners, despite their income levels. The article reports that 12 percent of USDA’s guaranteed loans and 17 percent of its direct loans are delinquent or in foreclosure. In other words, 88 percent of the guaranteed loans and 83 percent of the direct loans are in good standing.

Those rates represent more than half a million homeowners with USDA guarantees and more than 230,000 with USDA direct loans, in addition to the one million or so who have already paid off their USDA mortgages. All those borrowers turned to USDA because they could not receive standard loans from the private market, and succeeded as homeowners despite their low incomes.

While we find ways to improve USDA’s treatment of its borrowers facing defaults and foreclosures, we should also celebrate its successes and embrace its future.

Moises Loza
Executive Director
Housing Assistance Council
Washington, DC

Posted: May 26, 2012
Updated: June 7, 2012

House Votes to Eliminate American Community Survey

May 11, 2012/in Announcements

HOUSE VOTES TO ELIMINATE AMERICAN COMMUNITY SURVEY

On May 9th, the House of Representatives voted, 232-190, to eliminate all funding for the Census Bureau’s American Community Survey in the 2013 Commerce, Justice, and Science appropriations bill (H.R. 5326).

The American Community Survey (ACS) replaced traditional Census “long-form” data collection starting with the 2010 Census. The ACS is the only source of publicly available data on social, economic, and housing characteristics for all communities in the United States. This annual survey is essential to understanding housing conditions in rural communities, as well as developing appropriate policies and local solutions to address housing inadequacies.

It is expected that the Senate will take up their version of this bill (S. 2323) the week of May 14. It does not include the ACS elimination, so a House-Senate conference will later decide on the fate of the ACS.

More details are available from

the Census Project (a network of stakeholder organizations)
the Census Bureau

For more information on this issue, contact Lance George at the Housing Assistance Council, lance@ruralhome.org, (202) 842-8600.

Posted: May 11, 2012
Links updated May 14, 2012

HAC Final Comments to HUD on the Proposed Changes to the HOME Rule

February 14, 2012/in Announcements

The Housing Assistance Council (HAC) applauds and supports the U.S. Department of Housing and Urban Development’s (HUD) efforts to take such a comprehensive approach and fresh look at the HOME Program. HAC welcomes this opportunity to provide constructive comments on several of the proposed regulations. Overall, in reviewing the proposed changes we mainly support most of the documented revisions. Our comments below address only areas where we feel the proposed regulations will have a direct impact, with specific attention to CHDOs operating in rural communities.

1. Administrative Funding

The increased administrative and capacity requirements for rural PJs and CHDOs will have a significant impact if the HOME program does not also consider increases to the administrative and operating funding made available to these entities. While HUD is considering allowing available HOME funds to assist stock such as HOPE VI and public housing, thus limiting the amount of funds for the traditional eligible activities, it should also take this opportunity to consider raising the administrative cap for PJs. This could help provide adequate funding to effectively meet increased responsibilities that PJs may not be able to fund without fee income.

2. CHDO Definition and Capacity Requirements (Section 92.2)

CHDOs’ capacity to develop projects as well as to sustain and grow their organizations does not happen in a vacuum, and often already happens amidst scarce resources; this is particularly true in the rural areas where HAC works. The proposed regulation requires CHDOs to demonstrate internal capacity to develop proposed projects with virtually no external assistance. It explicitly prohibits the use of consultants and volunteer labor to demonstrate capacity. This is concerning for all CHDOs, but most particularly rural organizations, where internal capacity is frequently limited to one staff person. New hires and the required ‘demonstrated development experience’ may be impossible. These proposed limitations will severely limit the operating capacity of CHDOs, particularly those in rural areas, and their access to the CHDO operating and set-aside funds.

Further, the proposed changes to the definition of “Developer” should be revisited. The proposed language of ‘Developer” seems to exclude CHDOs from developing rental housing; we hope that this is an error. Developing affordable permanent housing, ownership or rental, is a typical and expected development role for CHDOs. We are certain that HUD is not suggesting that CHDOs should not pursue multifamily while serving as ‘Developer’.

3. CHDOs Sponsored by Governmental Entities (Section 92.2)

The proposed regulation restricts the control of a CHDO by a governmental entity. A number of CHDOs were created by local housing authorities (LHAs), councils of governments (COGs), regional planning commissions (RPCs), and tribal entities (TDHEs) which are frequently incorporated as governmental entities. Permitting LHAs, COGs, RPCs, and TDHEs to spin off CHDO arms is beneficial to all parties as long as the governmental entity is unrelated to the PJ and has separation from political influence. The ability to use shared staff, shared office space, and participation on the board has proven beneficial to the creation of strong CHDOs. Disallowing these relationships can have direct impacts on these CHDOs’ capacity to survive without the in-kind support.

4. Reduced Timeline for Income Determination (Section 92.203)

From the Federal Register, “A minimum examination period of 3 months should be sufficient to accurately reflect the income eligibility of applicants for HOME units.” This could potentially have an impact on low-income persons with seasonal or inconsistent income. If a three month standard is applied, this may skew an applicant’s income eligibility by focusing on a narrower timeframe. HUD should consider a longer examination period, possibly six months for a more reliable assessment of the applicant’s true income.

5. Development Timeline Condensed (Section 92.205)

The proposed regulation reduces PJs’ time to commit funds from two years to one year and the time for organizations to develop from five years to four years. The regulation allows a PJ to request a twelve-month extension to complete pending approval by HUD officials. Failure to meet the timeline requirement will require the PJ to repay HOME funds invested in the project. For rural projects, where the need to assemble an array of affordable financing and grant resources and arrange the timing and layering of these commitments is often difficult and time consuming, the proposed timeframes may have a substantial negative impact. HAC requests that HUD leaves the time to commit funds and develop the project as it currently stands.

6. Pre-development Costs and Written Agreements with Jurisdictions (Sections 92.206 and 92.504)

HAC supports the proposal for HOME funds to pay for certain predevelopment costs and services before the HOME funds are committed, but HUD should consider extending the proposed period to 24 months rather than the suggested 18. This would, first, match the period referenced in 92.504(c) (6) where the CHDO has an expectation to receive funds for a project within that time period. Second, the change would reflect that, certainly for rural areas, 24 months is a reasonable timeframe for development, particularly considering the typical need to leverage added financial resources.

7. CHDO Operating Support (Section 92.208)

While HUD is proposing language to tighten CHDOs’ internal capacity, it should also consider a minimum amount of operating support that will be provided. This should help ensure that CHDOs planning to and undertaking CHDO-eligible activities will have a determined amount of funding to help support them during the pre-development and construction phases of a project.

8. Inspection Fees (Section 92.214)

While HUD is prohibiting organizations from charging fees to homebuyers and tenants, it will begin permitting PJs to charge inspection fees for annual compliance monitoring visits. The proposed regulation does not give guidance on cost reasonableness of the fees. Further, HUD should also clarify that jurisdictions may charge inspection fees to owners of rental developments during the construction phase, or otherwise accept the inspection of a certified architect or third party verification firm, whose costs are typically included in the development budget.

9. Prohibition to Charging Fees to Homebuyers (Section 92.214)

HAC’s understanding is that under the proposed rule organizations would not be permitted to charge fees to the family for HOME homeownership assistance. In addition, the PJs would be required to (1) determine that any fees charged to the family by the first mortgage lender are reasonable, based upon industry practice in the area, and (2) ensure that the family is not being charged fees for a HOME-funded activity. HUD should clarify whether while homebuyers are required to receive pre-purchase counseling HOME assistance, organizations can or cannot include housing counseling as an eligible project cost under the HOME program; many organizations do charge a nominal fee on the HUD-1 to cover a portion of expenses.

Another related question is whether organizations that serve as ‘approved,’ or certified loan packagers, for conventional, government, or other nonprofit agencies can charge packaging or brokerage fees if HOME assistance is part of the construction or homebuyer financing. HUD should allow ‘approved’ or certified loan packagers to charge justifiable, reasonable and customary fees for this service in light of recent safeguards to homebuyers, including the SAFE Act, already in place to help protect buyers.

10. Maximum Per-Unit Subsidy Amount, Underwriting, and Subsidy Layering (Section 92.250 (b) (2)

The underwriting criteria established by PJs include an assessment of the development team’s capacity to undertake the proposed project. First, HUD should specify where the criteria will be made public (e.g. Consolidated Plan, Annual Action Plan, etc.). Second, HUD and PJs should ensure that any experience and financial capacity criteria proposed are reasonable for the type of development proposed, not a blanket standard regardless of the project type. It is important to remember that developers, including CHDOs, do need to ‘stretch or reach’ to higher development capacity levels to take on larger or more complex projects. HAC would want to see that HUD and PJs continue to address the value of building and supporting CHDOs’ development capacity, and the assessment process indicated under this section takes this into account.

11. Leasing Up Rental Properties/Troubled Rental Projects (Section 92.252, 210)

Rental units which have not been leased within three to six months would be required to report marketing plans to HUD. If efforts to market the unit are unsuccessful and a unit is not occupied by an initial tenant after 18 months, HUD would require repayment of HOME funds invested in the units, yet the project owner must maintain compliance and affordability throughout the original performance period. HUD should take into account that for certain rural communities it may be normal for a rental development to fully lease-up beyond a six month period. HUD may consider including waivers if the entity and PJ demonstrates progress towards full lease-up. HAC is satisfied with the rest of these provisions.

12. Tenant and Homebuyer Preferences (Section 92.253)

The proposed rule permits PJs to limit beneficiaries or give preferences to a particular segment of the low-income population only if the limits are described in the action plan and do not violate fair housing requirements. Limiting beneficiaries or giving preferences to such professions as police officers, teachers, or artists would be permissible. Employees of the PJ are not eligible for preferences.

Additionally, a project may have a limitation or preference for people with disabilities who need services offered at a project only if:

it is limited to households with disabilities that significantly interfere with their ability to obtain and maintain housing;
the households will not be able to maintain themselves in housing without appropriate supportive services; and,
the needed services cannot be provided in a non-segregated setting.

However the regulation enforces the current practice to allow HOME projects to restrict programs, such as 202, 811 and HOPWA. The language of this section leads to different interpretations of tenant eligibility and requirements about participating in supportive services. HUD should provide more clarification on PJs setting preferences and establishing tenants’ participation requirements in supportive service programs.

13. Initial Purchase Price Limit (Section 92.254)

HUD has proposed language for nonmetro communities, exempting them from the 95 percent of area median purchase price standard for newly constructed homes, [and] allowing states to aggregate sales data from at least two contiguously connected counties with similar attributes to use as the alternative benchmark. First, HUD should consider allowing states to either adopt this as a standard, use the 95 percentile of the U.S. median purchase price for new construction in nonmetro areas, or use other options that would ensure the eligibility of newly constructed homes. States would have to publish the standard they choose in their Action Plans. Second, HUD and the states should address how the purchase price limits would apply to homeowner rehab activity. Alternative proposals should include existing housing as well as new construction. While the proposed changes includes rehab activity in considering the purchase price limits, using the 95 percent of area median purchase price limit makes it extremely difficult to assist existing housing in rural areas. It will limit impact developers’ ability to acquire/rehab and sell existing stock in low-value markets because the after-rehabilitation value will exceed the 95 percent limit thereby eliminating possible HOME-eligible assistance. The standard should, just as with new construction, allow for PJs to have maximum flexibility to help generate sales for income eligible and credit-worthy families.

14. Fee Simple Absolute Titles (Section 92.300 (a) (2-4)

To qualify as a CHDO for a HOME-funded project as an owner or sponsor the nonprofit must own the property under fee simple absolute title. HAC is concerned that such a narrow definition may impede or prohibit CHDO development on Native American lands (where title may be held in trust by the tribe) or in existing community land trusts (CLT). HUD should either modify or provide an exemption to this proposal to allow CHDOs who intend to own, develop or build on Native American lands or under the land trust model. In these cases fee simple absolute title is not feasible given issues of trust land or the housing development model. There are models of where this works. The U.S. Department of Agriculture (USDA), for example, provides development-related funds that can be used to purchase or maintain a leasehold interest in a site; to construct housing and to pay construction loan interest on native lands

15. Profit/Nonprofit Partnerships in LIHTC Deals (Section 92.300)

The proposed rule states that for a project to qualify for CHDO funds, the CHDO must be the sole general partner. This requirement would result in a significant change in participation of many CHDOs, particularly those that are rural, in the LIHTC program. Currently CHDOs may, and should play a substantive role as co-general partners (GP) that will not only attract capital to the real estate project but also build their development capacity. Under the proposed change the resulting partnerships, particularly those with equity and other capital/development partners, may continue to deliver affordable housing to low and very-low income families. It may not be beneficial to those CHDOs seeking to build its development capacity, earn fee income or see any other upside to its participation beyond the goal of delivering affordable rental housing. In rural developments with partnership structures, it might be possible that fewer of these real estate projects may be undertaken without the rural CHDO co-GP who is bringing or rehabilitating affordable rental housing to these areas when no other entity may be mission-oriented to do so. HUD should instead consider language that seeks to strengthen the active role that CHDOs need to play in partnership structures.

Download a PDF of this Announcement

Posted: February 14, 2012

FY 13 HUD Budget and Appropriations

February 13, 2012/in Announcements

(Information about FY13 USDA rural housing funding is available here.)

HOUSE PASSES FY13 HUD APPROPRIATIONS BILL

July 2, 2012 – On June 29 the House of Representatives passed H.R. 5972, its version of the FY13 appropriations bill for the departments of Transportation and HUD. Most program funding remains at the levels set by the House Appropriations Committee (see table below). Slight increases were adopted for two programs: the Housing Opportunities for Persons with AIDS (HOPWA) was increased by $2 million and Homeless Assistance Grants received an additional $5 million. To keep the bill’s total funding level unchanged, these amounts were offset by decreases in HUD’s salaries and expenses account and its working capital fund.

The House rejected amendments to the bill that would have cut funding for HOME and CDBG. Proposals to increase funding for several other programs failed.

A more detailed summary of the amendments and discussion on the House floor is available from the National Low Income Housing Coalition.

The full Senate has not yet scheduled a date for consideration of its T-HUD funding bill, S. 2322.

HUD Program (dollars in millions)	FY11 Final Approp.^a	FY 12 Final Approp.	FY13 Admin. Budget	FY13 Senate Cmte. Bill (S. 2322)	FY13 House Bill (H.R. 5972)
Cmty. Devel. Block Grants (Sustainable Commun. Init.) (Rural Innovation Fund)	3,508 (100) 0	3,308.1 0 0	3,143 100 0	3,210 b 50 0	3,404 b 0 0
HOME	1,610	1,000	1,000	1,000	1,200
Tenant-Based Rental Asstnce. (Vets. Affairs Spptve Hsg. Vchrs)	18,408 (50)	18,914.4 (75)	19,074.3 (75)	19,396.3 (75)	19,134.3 (75)
Project-Based Rental Asstnce.	9,257.4	9,339.7	8,700.4	9,875.8	8,700.4
Public Hsg. Capital Fund	2,044	1,875	2,070	1,985	1,985
Public Hsg. Operating Fund	4,626	3,961.9	4,524	4,591	4,524
Choice Neighbrhd. Initiative	0	120	150	120
Housing Trust Fund	0	0	1,000	0	0
Native Amer. Hsg. Block Grant	650	650	650	650	650
Homeless Assistance Grants	1,905	1,901.2	2,231	2,146	2,005
Rural Hsg. Stability Prog.	—	—	5	c	c
Hsg. Opps. for Persons w/ AIDS	335	332	330	330	332
202 Hsg. for Elderly	400	374.6	475	375	425
811 Hsg. for Disabled	150	165	150	150	165
Fair Housing	72	70.8	68	68	68
Healthy Homes & Ld. Haz. Cntl.	120	120	120	120	120
Self-Help Homeownshp. (SHOP)	27	13.5	0	13.5	20
Housing Counseling	0	45	55	55	45

a. Figures shown do not include 0.2% across the board reduction.
b. Includes $3.1 billion in Senate and $3.34 billion in House for CDBG.
c. Funded under Homeless Assistance Grants.

HOUSE APPROPRIATORS ACT ON HUD SPENDING BILL FOR 2013

June 27, 2012 – The House committee report (H.Rept. 112-541) includes strong language supporting the Self-Help Homeownership Opportunity Program (SHOP):

Proposed elimination of SHOP.—The Administration once again proposes to eliminate all funding for the SHOP program, citing the HOME program as an acceptable substitute funding source and citing the rising administrative costs of SHOP recipients. Regarding the first point, the Committee notes there are many differences between the SHOP program, which allows non-profits to create affordable housing through the unique ‘‘self-help’’ model of homeownership, and the HOME program, which provides funding to states and local governments to increase the stock of affordable housing.

There are several reasons why the Committee declines to eliminate SHOP: HOME funding has decreased significantly in recent years; the self-help and sweat-equity model enjoys broad Congressional support; and SHOP funding is much-needed in rural areas, where state-wide HOME funds are scarce and often set-aside for large tax-credit developments, rather than for self-help homeownership. Regarding rising administrative costs, the Committee directs HUD to evaluate the history of administrative costs in the SHOP program, including whether HUD’s imposition of various requirements, such as mandatory site visits and Energy-Star certifications, has resulted in SHOP grantees requiring higher administrative costs.

The Committee directs the Secretary to report to the House and Senate Committees on Appropriations within 180 days of enactment on whether current administrative costs are reasonable, what portion of administrative costs are attributable to HUD requirements, and what actions can be taken by both HUD and grantees to reduce the administrative burden in this program.

June 20, 2012 – On June 19 the full House Appropriations Committee passed the Transportation-HUD funding bill without changing the subcommittee’s funding levels shown in the table below. An amendment by Rep. Jeff Flake (R-Arizona) to cut $2 million from the HOME program was defeated.

June 8, 2012 – The House Transportation-HUD Appropriations Subcommittee on June 7 reported out a bill to fund HUD and several other agencies in fiscal 2013 (starting Oct. 1, 2012).

The bill boosts funding for HOME, Sec. 202, CDBG, and SHOP. HOME, Section 202, and SHOP got significant increases above FY 2012 levels to $1.2 billion, $425 million, and $20 million respectively. The Rural Innovation Fund is not funded and seems dead after being left out of HUD’s budget proposal again. The Rural Housing Stability Program is funded as part of homeless assistance grants. Veterans housing vouchers are funded at $75 million and Native American Block Grants are at $650 million, maintaining 2012 levels for both programs. The House bill provides no funding for Choice Neighborhoods or Sustainable Communities. The table below provides details.

The full House Appropriations Committee is expected to act on this bill in about two weeks. The Senate Appropriations Committee passed its version of 2013 HUD appropriations, S. 2322, on April 19, with significant differences from yesterday’s House bill. Congress continues to move appropriations on a faster track this year, but it also remains unclear when the process will be complete. Final passage of most appropriations bills may not occur until a post-election lame duck session.

The bill is available on https://appropriations.house.gov/UploadedFiles/BILLS-112HR-SC-AP-FY13-THUD.pdf.

HUD Program (dollars in millions)	FY11 Final Approp.^a	FY 12 Final Approp.	FY13 Admin. Budget	FY13 Senate Bill (S. 2322)	FY13 House Subcomm. Bill
Cmty. Devel. Block Grants (Sustainable Commun. Init.) (Rural Innovation Fund)	3,508 (100) 0	3,308.1 0 0	3,143 100 0	3,210 b 50 0	3,404 b 0 0
HOME	1,610	1,000	1,000	1,000	1,200
Tenant-Based Rental Asstnce. (Vets. Affairs Spptve Hsg. Vchrs)	18,408 (50)	18,914.4 (75)	19,074.3 (75)	19,396.3 (75)	19,134.3 (75)
Project-Based Rental Asstnce.	9,257.4	9,339.7	8,700.4	9,875.8	8,700.4
Public Hsg. Capital Fund	2,044	1,875	2,070	1,985	1,985
Public Hsg. Operating Fund	4,626	3,961.9	4,524	4,591	4,524
Choice Neighbrhd. Initiative	0	120	150	120
Housing Trust Fund	0	0	1,000	0	0
Native Amer. Hsg. Block Grant	650	650	650	650	650
Homeless Assistance Grants	1,905	1,901.2	2,231	2,146	2,000
Rural Hsg. Stability Prog.	—	—	5	c	c
Hsg. Opps. for Persons w/ AIDS	335	332	330	330	330
202 Hsg. for Elderly	400	374.6	475	375	425
811 Hsg. for Disabled	150	165	150	150	165
Fair Housing	72	70.8	68	68	68
Healthy Homes & Ld. Haz. Cntl.	120	120	120	120	120
Self-Help Homeownshp. (SHOP)	27	13.5	0	13.5	20
Housing Counseling	0	45	55	55	45

a. Figures shown do not include 0.2% across the board reduction.
b. Includes $3.1 billion in Senate and $3.34 billion in House for CDBG.
c. Funded under Homeless Assistance Grants.

HUD SPENDING FOR 2013 ADVANCES IN SENATE

The Senate Appropriations Committee on April 19 reported out a bill to fund HUD and several other agencies in fiscal 2013 (starting October 1, 2012). Congress is moving appropriations on a much faster track this year, especially in the Senate, but it is still unclear when the process will be complete. The House of Representatives is also expected to move 2013 spending bills soon.

The Senate bill keeps HOME, SHOP, Indian housing and several other accounts at 2012 levels; increases public housing, rental assistance and homeless grants; and cuts a few other programs such as Section 811. The Rural Innovation Fund was not funded and seems dead after being left out of HUD’s budget proposal again.

The table below provides details.

HUD Program (dollars in millions)	FY11 Approp. a	FY 12 Approp.	FY13 Admin. Budget	FY13 Sen. Bill (S. 2322)
Cmty. Devel. Block Grants (Sustainable Commun. Init.) (Rural Innovation Fund)	3,508 (100) 0	3,308.1 0 0	3,143 (100) 0	3,210 b (50) 0
HOME	1,610	1,000	1,000	1,000
Tenant-Based Rental Asstnce. (Vets. Affairs Spptve Hsg. Vchrs)	18,408 (50)	18,914.4 (75)	19,074.3 (75)	19,396.3 (75)
Project-Based Rental Asstnce.	9,257.4	9,339.7	8,700.4	9,875.8
Public Hsg. Capital Fund	2,044	1,875	2,070	1,985
Public Hsg. Operating Fund	4,626	3,961.9	4,524	4,591
Choice Neighbrhd. Initiative	0	120	150	120
Housing Trust Fund	0	0	1,000	0
Native Amer. Hsg. Block Grant	650	650	650	650
Homeless Assistance Grants	1,905	1,901.2	2,231	2,146
Rural Hsg. Stability Prog.	—	c	5	c
Hsg. Opps. for Persons w/ AIDS	335	332	330	330
202 Hsg. for Elderly	400	374.6	475	375
811 Hsg. for Disabled	150	165	150	150
Fair Housing	72	70.8	68	68
Healthy Homes & Ld. Haz. Cntl.	120	120	120	120
Self-Help Homeownshp. (SHOP)	27	13.5	0	13.5
Housing Counseling	0	45	55	55

a. Figures shown do not include 0.2% across the board reduction.
b. Includes $3.1 billion for CDBG.
c. Funded under Homeless Assistance Grants; amount not specified.

PROPOSED HUD BUDGET FOR 2013 IS A MIX OF CUTS AND HIKES

The HUD budget includes some good news and some bad, cutting some programs sharply while increasing or maintaining others. Increases are in:

tenant-based rental assistance,
public housing operating and capital funds,
homeless assistance grants,
Section 202 senior housing,
Choice Neighborhoods, and
housing counseling.

Level funding from 2012 to 2013 would be in:

HOME,
veterans supportive housing vouchers,
Indian housing block grants, and
Healthy Homes and lead hazard controls.

Cuts or eliminations are asked for:

project based rental assistance (a very deep cut of $639 million),
CDBG (cut by $165 million),
SHOP (zero funding),
Section 811 housing for the disabled, and
fair housing

Proposed increases are in some accounts that were cut sharply in 2011 or 2012, such as counseling and Section 202.

The Rural Innovation Fund again does not receive funds and appears to be dead. This abandonment is especially troublesome given HUD’s roll out of this program in their 2010 budget request, as a replacement for the older Rural Housing and Economic Development program. Congress provided one year of funding for the RIF (FY10), but then the request was mostly abandoned by HUD.

HUD’s Self-Help Homeownership Opportunity Program (SHOP) also does not receive funds, with potential applicants once again directed to HOME. HUD says “all SHOP activities are eligible under the HOME program,” so go apply there. This ignores the fact that HOME was cut by $650 million in FY12, is under some stress from misguided bad publicity, and could hardly work as a program funded by dozens of state and local jurisdictions.

There is also a proposal to increase minimum rents to $75 for the lowest income HUD-assisted households. The National Low Income Housing Coalition and other advocates strongly oppose this proposal.